Higher Education Is Overrated. Skills Aren't

Harvard blogger Michael Shrage discusses what he calls the "mythical belief" that higher education invariably leads to the most successful career path

By Michael Schrage

Posted on Harvard Business Review: July 29, 2010 10:38 AM

With innovation, entrepreneurship and significantly smarter fiscal policies, America should eventually escape its "hireless recovery." But what won't hasten new hiring—and might even dampen job prospects—is the mythical belief that higher education invariably leads to higher employment and better jobs. It doesn't. Foolish New York Times stories notwithstanding, education is a misleading-to-malignant proxy for economic productivity or performance. Knowledge may be power, but "knowledge from college" is neither predictor nor guarantor of success. Growing numbers of informed observers increasingly describe a higher education "bubble" that makes a college and/or university education a subprime investment for too many attendees.

Are they right? I don't know. But painfully clear to many employers are serious gaps between elite educational credentials and actual individual competence. College transcripts spackled with As and Bs—particularly from liberal arts and humanities programs—reveal less about a candidate's capabilities than most serious employers need to know. Even top-tier MBA degrees often say more about the desire to have an important credential than about any greater capacity to be a good leader or manager. The curricular formalities of higher education—as opposed to its informal networks of friends and connections—may be less valuable now than they were a decade ago. In other words, alumni networks may be more economically valuable than whatever one studied in class. "Where you went" may prove professionally more helpful than "what you know." That certainly undermines "value of education" arguments. While higher education itself isn't marginal or unimportant, its actual market impact on employment prospects may be wildly misunderstood. In "Econ 101" terms for job-hunters: time spent cultivating your Facebook/Linked-In network(s) may be a better investment than taking that Finance elective.

Eduzealots have done a truly awful thing to serious human capital conversations and analyses around employment. By vociferously championing higher education as key to economic success, they've distorted important public policy debates about how and why people get hired and paid well. They've undermined useful arguments about "street smarts" versus "book smarts." Treating education as the best proxy for human capital is like using patents as your proxy for measuring innovation— its underlying logic shouldn't obscure the fact that you'll underweigh market leaders like WalMart, Google, Tata and Toyota. Dare I point out that Microsoft's Bill Gates, Dell's Michael Dell, Apple's Steve Jobs, Oracle's Larry Ellison and Facebook's Mark Zuckerberg are all college drop-outs? The point isn't to declare a college degree antithetical to launching a high-tech juggernaut but to observe that, perhaps, higher education isn't essential to effective entrepreneurship.

We have a huge branding issue. Pundits and policy-makers jabber about the need to educate people to compete in knowledge-intensive industries. But knowledge doesn't represent even half the intensity of this industrial challenge. What really matters are skills. The grievously undervalued human capital issue here isn't quality education in school but quality of skills in markets. Establishing correlations, let alone causality, between them is hard. (Michael Polanyi's classic "Personal Knowledge" brilliantly articulates this.) A computer science PhD doesn't make one a good programmer.

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