Weekly Update: Are we getting schooled?
(This is the first of two vacation-week pieces in which we’ll look into issues confronting the economy and markets. Today, we focus on education. Next week, it’s the pending election and fiscal cliff. As always, we’ll also have a little ‘fun’ at the end.)
ManpowerGroup says 34% of companies around the world are struggling to fill open positions due to lack of talent. The issue is most pronounced in Japan, where 81% of companies find that there are not enough skilled youngsters to replace retirees. Brazil reports 71% of companies complaining about applicant qualifications and education. About half of companies report similar concerns in Bulgaria, Australia, India and even the U.S. Deloitte, for example, estimates that 600,000 U.S. jobs went unfilled last year due to a lack of qualified workers, and the number of vacant jobs continues to increase—even at a time much of this year’s election centers on ways to create more jobs. Globally, it’s estimated 10 million manufacturing jobs are unfilled because of a jobs-skills mismatch.
Demographics play a role—Japan’s working-age population is shrinking dramatically, while India’s soaring population makes it difficult for the country to keep up. But at least part of the problem in our country appears to be an educational system that isn’t working all that well at the elementary and secondary school levels. The top performers in the latest Organization for Economic Cooperation and Development’s Program for International Student Assessment, which measures student performance in a battery of reading, math and science tests, were Shanghai, Hong Kong, Finland, Singapore, South Korea and Japan. Germany was ranked 14th, UK 20th and the U.S. 25th, with math scores significantly below the OECD average.
Among the most concerning findings is that 18% of 15-year-olds fail to achieve a basic level of reading proficiency that makes them capable of very basic tasks, such as locating information and making comparisons and connections. The U.S. failure rate is five times higher than in Shanghai, more than double that in Korea, Hong Kong and Finland, and far higher than in Canada and Japan. Moreover, nearly one in five 15-year-olds in the U.S. drops out, third worst among 34 OECD nations. A key difference between higher and lower performers: in stark contrast to unionized teachers in many western nations, the status, advancement and compensation of Chinese teachers is based on demonstrated competency rather than seniority. In other words, effectiveness, not longevity, determines a teacher’s pay. Hmm.
The irony for the U.S. is that the reverse is true at its colleges and universities, where faculty generally isn’t unionized and is required to continue with and to publish scholarly works to obtain and retain tenure. While the cultural importance placed on education in China, Korea, Japan and Singapore has enabled these countries to soar past western competitors in secondary education, the U.S. and UK continue to offer world class higher education. A new study by Universitas 21, an international research network of 24 universities and colleges, examined the most recent data to rate international education systems across 20 measures of higher education and found that the U.S. stands well above other nations in the delivery of higher education—16% ahead of second place Sweden.
The Times Higher Education World University Rankings for 2012 put seven of the top 10 and 70 of the top 200 universities in the U.S. This is important, because well-educated nations have the upper hand in attracting and retaining high-value manufacturing—the sort that increasingly requires a college degree and at the least training beyond high school. A recent survey done by the Massachusetts Institute of Technology found that 14% of U.S. companies surveyed definitely plan to move some of their manufacturing back home due to lower labor costs, a cheaper dollar, high productivity, and a highly educated and skilled labor force, as well as proximity to the world’s biggest economy, which saves on transportation costs and the worry about protection of intellectual property.
This isn’t to suggest that the higher education system in the U.S. can stand on its laurels. According to a new study by the World Intellectual Property Organization (WIPO), Switzerland, Sweden and Singapore are the world’s most innovative nations, and China has surpassed the U.S., which has fallen to 10th. Germany and Japan trail at 15th and 25th, respectively. Although more patent applications were filed at the U.S. patent office than any other country’s patent offices, residents of China now file the most patent applications and Japanese residents also file more applications than U.S. residents (many patent applications filed in the U.S. are held by foreign filers).
WIPO says China and India are best at transforming innovation inputs into innovation outputs—they are better at monetizing knowledge and technology. But it is worth noting that even as the U.S. may be trailing on patents, the innovations often get started here through the education of foreign students who take their knowledge home, where they put it to use. Perhaps there’s a lesson here for the teachers, unions and administrators who run our elementary and second schools in the U.S.
Give me an ‘A’ Fun facts about ticker symbols: throughout history, it has been true that four of the 10 outperforming letters are in the very beginning of the alphabet, with Y and Z among the worst in terms of company stock performance. Q performs poorly across all market caps, and J is among the best performers. Further analysis on tickers shows that 2- and 3-letter tickers are the way to go.
Take off your glasses, I’m having a bad-hair day Google has introduced Project Glass, computerized eyewear that works like a hands-free smartphone, displaying messages, images and maps onto the world in front of you. The glasses also have built-in cameras.
My husband often responds ‘That’s interesting,’ to what I say—he doesn’t mean it Last year, when MTV polled its 13-to 30-year-old viewers on their Web habits, most felt “defined” by what they put online, “exhausted” by always having to be putting it out there, and utterly unable to look away for fear of missing out—or “FOMO,” as the network called it.
Stand up! The Pennington Biomedical Research Center followed 17,000 Canadians over 12 years and found that those who sat for most of the day were 54% more likely to die of heart attacks than those who didn’t. The findings have spawned a new diagnosis: “sitting disease.” And strikingly, even regular exercise and a healthy diet don't protect you. The savior is the standing desk.
The Mister will drink to that! A study shows that men who have had a couple of beers are better at solving brain teasers than sober men.