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Not so fast - Is more education the answer to job creation?


President Obama has a vision of American revival that calls for enhancing our national competitiveness through education. If we educate more people, our products will compete more effectively in world markets. So we must invest more and more money in education. It’s the same old song sung with a greater sense of urgency, even desperation.

I don’t believe this for a minute. We’re borrowing lots of money and throwing it at higher education. The for-profit colleges are salivating. They’ve got armies of high-pressure salesmen who talk young people into signing up for expensive, on-line programs that attract federal grant money.

It’s like the housing market five or six years ago. Then people used their homes to get loans to support a higher standard of living than what they jobs would afford. Now young people are going to college to get loans to pay their living expenses while they are supposedly attending classes. If there are no jobs, the money has to come from somewhere. Why not from student loans?

Is there a relationship between going to college and improving America’s trade competitiveness? President Obama thinks so. He wants the United States to be Number One in the percentage of young people who graduate from college.

Presumably, the more college graduates, the more good ideas will emerge from their post-graduate brains that can be turned into commercial products to be sold abroad. However, one wonders whether the Chinese will buy what our majors in European literature, political science, or women’s studies programs might want to sell based on what they learned in college.

Naturally, the President wants more young people to study the natural sciences, mathematics, and engineering. These are the people who will invent salable products of the future. The more of them, presumably the more inventions. So our young people must stay in school to become fit to have scientific inventions.

This sounds good. However, I have always been haunted by the fact that America’s most prolific inventor, Thomas A. Edison had only three months of formal education. He was taken out of school when the teacher called him “addled” because Edison could not concentrate on his subjects. The same was true of Henry Ford, who had only a sixth-grade education. Both Edison and Ford taught themselves how to invent.

Some will say that uneducated persons like Thomas Edison and Henry Ford could make important inventions in the 19th Century because science and technology were then in a relatively primitive state. The same could not happen today. You need to start with a much greater fund of education to be in a position to make significant contributions in the area of science and technology.

Today, the technological focus is on the computer industry. Let’s see how the Edisons and Fords of this industry got their start. Were they straight-A students with a major in science who might have gone on to get a masters degree or doctorate to deepen their knowledge before turning to invention?

Let’s start with Bill Gates, the co-founder of Microsoft. Gates was admitted to Harvard in 1974 - so far, so good. However, after a year he dropped out of Harvard to work with a high-school friend, Paul Allen, on software for a microcomputer. Allen had dropped out of Washington State University after two years. Their mutual interest in computer programming began when they attended a private high school together and used the school’s computer to create a tic-tac-toe game in their spare time.

Steve Jobs and Steve Wozniak are the principal founders of Apple Computers. Jobs attended Reed College for one semester before dropping out. Wozniak who worked on mainframe computers at Hewlett-Packard, dropped out of the University of California at Berkeley in 1975 although he returned in 1986 to complete his undergraduate degree. Together Wozniak and Jobs developed the Apple II personal computer in 1976. The work was done mainly in Jobs’ bedroom and garage.

Gates, Allen, Jobs, and Wozniak are some of the principal figures in the creation of microcomputer hardware and software. All were high-school graduates and college drop-outs who had a strong interest in personal computing in the day when this industry was dominated by hobbyists. They were following their bliss rather than an academic study program.

The founders of Yahoo! and Google, on the other hand, were graduate students at Stanford when their companies were founded. Jerry Yang and David Filo of Yahoo! created a directory of web sites called “David and Jerry’s Guide to the World Wide Web” in 1994. Larry Page and Sergey Brin, founders of Google, were Ph.D. candidates at Stanford in 1996 when they created the Google search engine as a research project. They had developed a unique way of ranking pages.

Another popular website, Facebook, was created by Mark Zuckerberg and fellow undergraduates at Harvard in 2003. They were computer-science students who hacked into Harvard’s computer files to obtain photographs of fellow students. They used these photographs to create a website that placed two pictures next to each other asking viewers to vote on “who’s hot” and “who’s not.” The project grew from there.

In the case of these three most heavily visited websites, the founders were all students at prestigious universities who were studying computer science when they did their creative work. However, with the possible exception of Google, it would appear that this work concerned the social aspect of the Internet rather than computer software or hardware design. It was the students’ personal initiative rather than what was taught in the college courses that brought them to their invention.

On the whole, it does not appear that the imperative to stay in school would have aided the process of developing computer software or the Internet, based on these experiences. True, there needed to be persons versed in computer software, but the critical thinking that led to the invention had more to do with the personal interest, ability, and experience of the inventor rather than with concepts learned in school. The inventor also needed the freedom and resources to work on the project.

What, then, would create an environment conducive to scientific invention?

1. Assuming that most important inventions come from motivated individuals, it would help for those individuals to have more free time. If, say, the federal government promoted a four-day workweek to replace the five-day workweek, that would give creative persons an extra day each week to work on their invention. Ideally, the inventors would have sufficient resources from gainful employment to finance the initial experiments.

2. Inventors need an incentive to pursue their dream. Commercial inventions are often motivated by the prospect of financial gain, yet many inventors are cheated out of a just reward by their business partners and others. The government might give greater attention to protecting the rights of inventors.

3. In particular, corporations typically hold the patent rights to inventions of employees created on company time. Sometimes they sit on the patents without developing them commercially. Perhaps, a “use it or lose it” policy would help bring more employee-invented products to market. If the corporation does not develop the patent after a certain time, the commercial rights might revert to the originating employee.

Keep in mind that the creation of new technologies is a different thing than the creation of new products or industries. Good ideas are quickly copied. Unless technological discovery is supported by strong international patent protection, it makes little difference whether Americans or other nationals originated the invention. What matters is where the resulting business, including its production facilities, is located.

The global economy is driven primarily by cost. The low-cost producer will generally win the contract. If the United States is burdened by an overly expensive educational establishment, that in itself will make our nation less competitive.

Don’t forget that other nations, too, have an educated work force that will much do the same work as Americans but at a lower cost. The graduates from American colleges who have heavy student loans to service will require a higher wage than their foreign competitors, which will put them at a disadvantage in the global market for labor.

Before we get too heavily into an education-pumped financial bubble, U.S. policy makers should look at some of our other options.


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