Biodun Iginla, BBC News

Biodun Iginla, BBC News
Showing posts with label manufacturing. Show all posts
Showing posts with label manufacturing. Show all posts

Thursday, January 12, 2017

Equipping people to stay ahead of technological change

Learning and earning


It is easy to say that people need to keep learning throughout their careers. The practicalities are daunting




WHEN education fails to keep pace with technology, the result is inequality. Without the skills to stay useful as innovations arrive, workers suffer—and if enough of them fall behind, society starts to fall apart. That fundamental insight seized reformers in the Industrial Revolution, heralding state-funded universal schooling. Later, automation in factories and offices called forth a surge in college graduates. The combination of education and innovation, spread over decades, led to a remarkable flowering of prosperity.
Today robotics and artificial intelligence call for another education revolution. This time, however, working lives are so lengthy and so fast-changing that simply cramming more schooling in at the start is not enough. People must also be able to acquire new skills throughout their careers.
Unfortunately, as our special report in this issue sets out, the lifelong learning that exists today mainly benefits high achievers—and is therefore more likely to exacerbate inequality than diminish it. If 21st-century economies are not to create a massive underclass, policymakers urgently need to work out how to help all their citizens learn while they earn. So far, their ambition has fallen pitifully short.
Machines or learning
The classic model of education—a burst at the start and top-ups through company training—is breaking down. One reason is the need for new, and constantly updated, skills. Manufacturing increasingly calls for brain work rather than metal-bashing (see Briefing). The share of the American workforce employed in routine office jobs declined from 25.5% to 21% between 1996 and 2015. The single, stable career has gone the way of the Rolodex.
Pushing people into ever-higher levels of formal education at the start of their lives is not the way to cope. Just 16% of Americans think that a four-year college degree prepares students very well for a good job. Although a vocational education promises that vital first hire, those with specialised training tend to withdraw from the labour force earlier than those with general education—perhaps because they are less adaptable.
At the same time on-the-job training is shrinking. In America and Britain it has fallen by roughly half in the past two decades. Self-employment is spreading, leaving more people to take responsibility for their own skills. Taking time out later in life to pursue a formal qualification is an option, but it costs money and most colleges are geared towards youngsters.
The market is innovating to enable workers to learn and earn in new ways. Providers from General Assembly to Pluralsight are building businesses on the promise of boosting and rebooting careers. Massive open online courses (MOOCs) have veered away from lectures on Plato or black holes in favour of courses that make their students more employable. At Udacity and Coursera self-improvers pay for cheap, short programmes that bestow “microcredentials” and “nanodegrees” in, say, self-driving cars or the Android operating system. By offering degrees online, universities are making it easier for professionals to burnish their skills. A single master’s programme from Georgia Tech could expand the annual output of computer-science master’s degrees in America by close to 10%.
Such efforts demonstrate how to interleave careers and learning. But left to its own devices, this nascent market will mainly serve those who already have advantages. It is easier to learn later in life if you enjoyed the classroom first time around: about 80% of the learners on Coursera already have degrees. Online learning requires some IT literacy, yet one in four adults in the OECD has no or limited experience of computers. Skills atrophy unless they are used, but many low-end jobs give workers little chance to practise them.
Shampoo technician wanted
If new ways of learning are to help those who need them most, policymakers should be aiming for something far more radical. Because education is a public good whose benefits spill over to all of society, governments have a vital role to play—not just by spending more, but also by spending wisely.
Lifelong learning starts at school. As a rule, education should not be narrowly vocational. The curriculum needs to teach children how to study and think. A focus on “metacognition” will make them better at picking up skills later in life.
But the biggest change is to make adult learning routinely accessible to all. One way is for citizens to receive vouchers that they can use to pay for training. Singapore has such “individual learning accounts”; it has given money to everyone over 25 to spend on any of 500 approved courses. So far each citizen has only a few hundred dollars, but it is early days.
Courses paid for by taxpayers risk being wasteful. But industry can help by steering people towards the skills it wants and by working with MOOCs and colleges to design courses that are relevant. Companies can also encourage their staff to learn. AT&T, a telecoms firm which wants to equip its workforce with digital skills, spends $30m a year on reimbursing employees’ tuition costs. Trade unions can play a useful role as organisers of lifelong learning, particularly for those—workers in small firms or the self-employed—for whom company-provided training is unlikely. A union-run training programme in Britain has support from political parties on the right and left.
To make all this training worthwhile, governments need to slash the licensing requirements and other barriers that make it hard for newcomers to enter occupations. Rather than asking for 300 hours’ practice to qualify to wash hair, for instance, the state of Tennessee should let hairdressers decide for themselves who is the best person to hire.
Not everyone will successfully navigate the shifting jobs market. Those most at risk of technological disruption are men in blue-collar jobs, many of whom reject taking less “masculine” roles in fast-growing areas such as health care. But to keep the numbers of those left behind to a minimum, all adults must have access to flexible, affordable training. The 19th and 20th centuries saw stunning advances in education. That should be the scale of the ambition today.

Thursday, March 12, 2015

Made in China?

Global manufacturing

by Coco Jiang and Biodun Iginla, Political News Analysts, The Economist and BBC News

Asia’s dominance in manufacturing will endure. That will make development harder for others

BY MAKING things and selling them to foreigners, China has transformed itself—and the world economy with it. In 1990 it produced less than 3% of global manufacturing output by value; its share now is nearly a quarter. China produces about 80% of the world’s air-conditioners, 70% of its mobile phones and 60% of its shoes. The white heat of China’s ascent has forged supply chains that reach deep into South-East Asia. This “Factory Asia” now makes almost half the world’s goods.
China has been following in the footsteps of Asian tigers such as South Korea and Taiwan. Many assumed that, in due course, the baton would pass to other parts of the world, enabling them in their turn to manufacture their way to prosperity. But far from being loosened by rising wages, China’s grip is tightening. Low-cost work that does leave China goes mainly to South-East Asia, only reinforcing Factory Asia’s dominance (see article). That raises questions for emerging markets outside China’s orbit. From India to Africa and South America, the tricky task of getting rich has become harder.
Work to rule
China’s economy is not as robust as it was. The property market is plagued by excess supply. Rising debt is a burden. Earlier this month the government said that it was aiming for growth of 7% this year, which would be its lowest for more than two decades—data this week suggest even this might be a struggle (see article). Despite this, China will continue to have three formidable advantages in manufacturing that will benefit the economy as a whole.
First, it is clinging on to low-cost manufacturing, even as it goes upmarket to exploit higher-value activities. Its share of global clothing exports has actually risen, from 42.6% in 2011 to 43.1% in 2013. It is also making more of the things that go into its goods. The World Bank has found that the share of imported components in China’s total exports has fallen from a peak of 60% in the mid-1990s to around 35% today. This is partly because China boasts clusters of efficient suppliers that others will struggle to replicate. It has excellent, and improving, infrastructure: it plans to build ten airports a year until 2020 (see article). And its firms are using automation to raise productivity, offsetting some of the effect of higher wages—the idea behind the government’s new “Made in China 2025” strategy.
China’s second strength is Factory Asia itself. As wages rise, some low-cost activity is indeed leaving the country. Much of this is passing to large low-income populations in South-East Asia. This process has a dark side. Last year an NGO found that almost 30% of workers in Malaysia’s electronics industry were forced labour (see article). But as Samsung, Microsoft, Toyota and other multinational firms trim production in China and turn instead to places such as Myanmar and the Philippines, they reinforce a regional supply chain with China at the centre.
The third advantage is that China is increasingly a linchpin of demand. As the spending and sophistication of Chinese consumers grows, Factory Asia is grabbing a bigger share of higher-margin marketing and customer service. At the same time, Chinese demand is strengthening Asian supply chains all the more. When it comes to the Chinese market, local contractors have the edge over distant rivals.
Deft policy could boost these advantages still further. The Association of South-East Asian Nations (ASEAN) is capable of snapping up low-end manufacturing. China’s share—by volume—of the market for American shoe imports slipped from 87% in 2009 to 79% last year. Vietnam, Indonesia and Cambodia picked up all the extra work. But ASEAN could do far more to create a single market for more complex goods and services. Regional—or, better, global—deals would smooth the spread of manufacturing networks from China into nearby countries. The example of Thailand’s strength in vehicle production, which followed the scrapping of restrictions on foreign components, shows how the right policies can weld South-East Asian countries into China’s manufacturing machine.
Unfortunately, other parts of the emerging world have less cause to rejoice. They lack a large economy that can act as the nucleus of a regional grouping. The North American Free-Trade Agreement has brought Mexican firms into supply chains that criss-cross North America, but not Central and South American ones. High trade barriers mean western Europe will not help north Africa in the way that it has helped central and eastern Europe.
And even when places like India or sub-Saharan Africa prise production from Factory Asia’s grasp, another problem remains. Manufacturing may no longer offer the employment or income gains that it once did. In the past export-led manufacturing offered a way for large numbers of unskilled workers to move from field to factory, transforming their productivity at a stroke. Now technological advances have led to fewer workers on factory floors. China and its neighbours may have been the last countries to be able to climb up the ladder of development simply by recruiting lots of unskilled people to make things cheaply.
Exports still remain the surest path to success for emerging markets. Competing in global markets is the best way to boost productivity. But governments outside the gates of Factory Asia will have to rely on several engines of development—not just manufacturing, but agriculture and services, too. India’s IT-services sector shows what can be achieved, but it is high-skilled and barely taps into the country’s ocean of labour.
Put policy to work
Such a model of development demands more of policymakers than competing on manufacturing labour costs ever did. A more liberal global regime for trade in services should be a priority for South America and Africa. Infrastructure spending has to focus on fibre-optic cables as well as ports and roads. Education is essential, because countries trying to break into global markets will need skilled workforces.
These are tall orders for developing countries. But just waiting for higher Chinese wages to push jobs their way is a recipe for failure.