College, Jobs, and the Machine

Race Against the Machine, a recent report from two MIT professors, has gathered media attention by laying the blame for the Great Recession and weak recovery on advancing technology, particularly computers, which are replacing human beings. As the New York Times writes:

"Faster, cheaper computers and increasingly clever software, the authors say, are giving machines capabilities that were once thought to be distinctively human, like understanding speech, translating from one language to another and recognizing patterns. So automation is rapidly moving beyond factories to jobs in call centers, marketing and sales — parts of the services sector, which provides most jobs in the economy.

During the last recession, the authors write, one in 12 people in sales lost their jobs, for example. And the downturn prompted many businesses to look harder at substituting technology for people, if possible. Since the end of the recession in June 2009, they note, corporate spending on equipment and software has increased by 26 percent, while payrolls have been flat."

Digital technologies enables a "super-star" effect, concentrating wealth in the hands of the very best. Thanks to computers, "the best" can be replicated and sold, leading to highly concentrated markets like those for pop stars, major league athletes, or CEO salaries. This argument is more subtle and more powerful than the idea of ever more capable machines replacing humans, a trend which has been with us since the 1800s. It appears that intrinsically, computers might be associated with the immense concentration of wealth we've witnessed over the past 20th century. While everybody is better off now, the top 1% is much better off. The top 0.1% is unimaginably more well off.

What hasn't garnered as much attention are the report's recommendations to resolve this problem, starting with education, entrepreneurship, and regulations. There's something here to irritate everybody: the end of tenure for teachers, removing the mortage tax credit, public healthcare not tied to employment. But the goal is simple, reduce barriers to innovation, allow people to lead flexible yet secure lives, and help people race with machines, not against them.

Education is the first tier of reform, because without an educated population capable of taking advantage of opportunities, everything else is moot. Yet education, and in particular, higher education, appears to be failing. We still teach people with an antiquated lecture style that wastes students' and professors' time, and doesn't impart skills. Recent college graduates feel betrayed by a job market that doesn't need their skills, as this NYMag article illuminates. STEM (science, technology, engineering, and math) degrees are more valuable than ever, but aren't attracting sufficient students for a variety of reasons, including poor introductory courses, lower GPAs, and (apparently) tedious careers. Korea is requesting that fewer people go to college, a point which PayPal founder Peter Thiel has been making again and again, most recently in a debate in Chicago.

To quote Thiel opponent in the debate, Vivek Wadhwa:

"Your key issue was that education has become far too expensive — that, in the past, the cost may have been justified but is no longer. You compare this to the most recent housing market bubble, which was a leading contributor to the recession. Bienen didn’t agree. He argued that universities greatly subsidize education, offer significant discounts and subsidies for needy students, and provide far more value than what they charge. But I am willing to concede part of this point to you: We do need to improve the cost-effectiveness and productivity of education."

Wadhwa calls on Thiel to help revolutionize education, using the power of the interent to connect students to the best teachers and the best sources of knowledge. This is a worthy, necessary task is human beings are to prevail over the efficiency of ever better machines. With that, let me ask:

What kind of jobs will exist in the 21st century? What kind of skills are necessary for those jobs? How can people learn those skills? How can access to the opportunities of the future be spread as widely as possible?