Monday, April 20, 2015

EDUCATION IS KEY ...DUH!!

The state of Massachusetts, legalized universal primary education -- well they called it compulsory school attendance, in 1852 so by now its safe to say they have universal literacy. But they went further and now have more than 100 colleges.

Harvard and the Massachusetts Institute of Technology (MIT) lead the pack as centers of education but more importantly as leading research institutions.

Understandably Massachusetts is considered a center of high education, not only in the US but globally.

The state started off as a settler colony in 1620, the state's economy has been totally transformed to the point that agriculture is not one of the major contributors to the overall economy.

"The high concentration on education means the economy is graduated up the value chain. Higher education, biotechnology, finance, health sciences and tourism now account for most of the state's $400b GDP, about twenty times the size of Uganda's economy or four times the economy of the East African Community...

As if more proof was needed while the export of goods from the state comes in at $28b state officials think export of services more than doubles that figure. They say its too difficult to track service exports so they rely on educated gueses.

Its obvious. 

If we want to have long term sustainable development we need to invest more and attract more investment into the education sector. UPE and USE are a good start but beyond higher education a more determined push into research and development is critical.

MIT, which is on the cutting edge of technological development, gets more than half a billion dollars in research .grants annually from the government. The university earns more than $100m a year from the more than 500 patents and technologies they license.

It is in the text books, improve the quality of your human resource -- through education or increasing capital utilization in your work processes, and you raise incomes and the general economy.

But even more interestingly it can be argued that there need not be any major attempts to direct this human resource to one particular direction or another. Beyond creating an enabling environment for it to grow and thrive, the US shows that it will find its own level and work for the betterment of the general society.

An enabling environment will have at its center an ability of this improved labour force's ability to be gainfully employed otherwise it will take it services elsewhere.

As it is now the US is recovering from the global crisis, creating new jobs at a prodigious rate. But observers note that the jobs that were lost during the crisis are not the ones being replaced. The jobs being created are either at the very low end of the scale or the most specialized ones -- they say there is no problem finding jobs for PhD holders.

But even at the lower end they are needing less and less hands to do the same amount of work as before....

At one restaurant in La Guardia airport-New York two waiters serve hundreds of clients a shift. Back breaking work, but made easier by the fact that the waiters don't have to take orders. Patrons order straight from their seats using tablets, pay for the meal using their cards and the first time they meet the waiter is when they get served. This innovation alone cuts fixed costs significantly according to the shift manager.

While it will be harder to get a job the US worker will be more productive coming out of the crisis than when he went in, but bare minimum what ever you do you better be able to use a computer.

Strangely while raising the society's output, increased use of technology could be increasing wealth inequalities in the US. It will be interesting to see how they handle it in coming years.

The fear of course is that left to capital's hands, labour will get the short end of the stick. Left to labour they would love to sue for more pay and fewer hours, which would do nothing for business.

It's a dilemma they need to resolve sooner than later.

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