Companies & Industries

Challenge for the Next President: Education


In the third of four articles, Boston Consulting Group's Harold L. Sirkin offers an education lesson plan for the U.S. in the world of globality

Dear Senators McCain and Obama:

Politicians at all levels of government, from local school board members and state legislators to those seeking the highest office in the land, realize that an educated body politic is what helps bind us together as a society, enables us to compete in the global economy, and provides the upward mobility that makes America uniquely America. And that's why we need to ensure that every U.S. child receives a proper education.

Measured by the amount of government money spent on K-12 public education each year—an estimated $526.6 billion in 2006, for an average of $9,138 per student, according to an April, 2008, Census Bureau report, we take our commitment to education seriously in the U.S. (Other government sources place the figures higher.) Measured by the uneven results we see, however, another picture emerges: that of a troubled system that is inadequately serving the interests of our children, taxpayers, and country. In a global economy where the U.S. must compete with everyone from everywhere for everything, including talent, our leaders can't let this continue.

Clearly one of your challenges as the next President is to revive American education. The key is not how much we spend, but spending smarter. If we don't, America will find itself falling further behind those countries that can and do properly educate their children. And we will have to import more talent, a challenge in a global economy already struggling with talent shortages. There needs to be a sense of urgency here, the kind of focused resolve that gripped the U.S. after the Soviet Union surprised the world with its Oct. 4, 1957, Sputnik 1 satellite launch. We accepted the challenge then and can do no less now.

Inspiration from the Space Program

How can we do this? For starters, the U.S. needs to commit to a basic level of education for all of its citizens. To have a workforce that can compete in the new world of globality, basic reading, writing, math, and science skills are a must. Every child needs to obtain these skills, whether they are destined to become Nobel prize-winning physicists, HVAC service technicians, or fast-food jockeys. In particular, American students are falling behind in math and science, the same critical disciplines President John F. Kennedy stressed in the early 1960s. He inspired us to reach for the skies, literally and figuratively—proposing in a May, 1961, address to a joint session of Congress that the U.S. commit itself to "landing a man on the moon and returning him back safely to the earth" before the end of that decade.

Yet almost half a century later, we once again find ourselves falling behind our competitors, many of which have far fewer resources than we do. According to the International Association for the Evaluation of Educational Achievement, which researches and publishes the "Trends in International Mathematics and Science Study," U.S. eighth graders are being outperformed in math by eighth graders from 14 other countries, including Belgium, Estonia, Hungary, Japan, Malaysia, Netherlands, Russia, South Korea, Taiwan, and the Slovak Republic. In science, U.S. eighth graders trail their peers from Estonia, Hong Kong, Hungary, Japan, Netherlands, Singapore, South Korea, and Taiwan.

According to a September, 2008, report from the nonpartisan Alliance for Excellent Education, our public education system not only squanders current human and financial resources, but exacts a price for doing so long into the future. More than 1.2 million high school students who should have graduated with the Class of 2008—about 30% of the total—dropped out instead. The Alliance estimated that the lost lifetime earnings for this "class of dropouts" would be more than $319 billion. The situation is worse among minority students, with 42% of Hispanic children dropping out, 46.6% of African-American children, and 51.7% of American Indian and Alaska native children.

Beyond Basic Education

These losses add up. If all heads of households in the U.S. had graduated from high school, the Alliance calculated, American households would have some $74 billion more in accumulated wealth. If African-American and Hispanic students graduated at the same rate as white students, more than $300 billion could be added to the U.S. economy by 2020. If every high school student earned a diploma, we would save money on health care, see crime and incarceration rates fall, and reap other benefits. We do these children and ourselves no favor by making it easy for our citizens to opt out of a basic education.

And we need to look beyond the basic education of K-12 students. Indeed, education has two necessary, complementary components: basic skills, including the ability to read, write, and use numbers to balance a checkbook or calculate miles per gallon, as well as job skills, those needed to excel at a trade or profession. And that's why we need to move away from the insular notion that a proper education culminates in receiving a degree from a four-year college. Many companies in many fields will soon be losing their most skilled and experienced workers as the Baby Boom generation retires. There will be a massive loss not only of people, but of critical knowledge and skills. In many instances the next generation has not been trained. Where will our electric utilities, mining companies, airlines, railroads, and manufacturers find the skilled workers to replace them?

To combat that problem, we should be encouraging more young people with strong nonacademic interests and skills to attend trade and vocational schools, as Germany does. Perhaps what we need is a "parallel" system of colleges where people receive specialized training, serve apprenticeships, take some college-level business and accounting courses, and are certified in their chosen fields. These schools would be more than trade schools or community colleges and different than traditional four-year schools.

Retaining Talent is a Must

This will help supply us with the skilled workers we will need in the future, including welders, electricians, plumbers, HVAC technicians, and others who build, operate, and fix things. Such careers can be challenging and rewarding and are something to be proud of. And such skills are necessary for the success of our country. The Germans have this right; we should learn from them. If we don't do this we could end up a country with an abundance of college "educated" people who don't know how to make things work, and don't know how to fix them when they don't.

As Charles Murray of the American Enterprise Institute writes in his new book, Real Education: Four Simple Truths for Bringing America's Schools Back to Reality (Crown, 2008), "The misbegotten, pernicious, wrongheaded idea that not going to college means you're a failure" needs to be discarded. Some people should not go to college, not because they are not capable of it, but because their passions lie elsewhere. We need to make it possible and rewarding for them to take this road less traveled."

Earlier this year, BCG, the World Federation of Personnel Management Assns., and the Society for Human Resource Management surveyed more than 4,700 executives in 83 countries and markets on future talent needs. BCG senior partner Rainer Strack, one of the authors of the ensuing report, "Creating People Advantage: How to Address HR Challenges Worldwide Through 2015," summed up the findings as follows: "It may soon be harder to find and keep talented employees than to raise money in an IPO."

Building a Skilled Workforce

Talent development, as we know, begins with education. Sure, the President needs to do everything he can to see that America's education system produces the teachers, doctors, engineers, scientists, accountants, and managers the U.S. will need to successfully compete in the era of freewheeling global competition. But he also needs to do all he can to see that America has a large and proud skilled workforce that can build and maintain the America of our future.


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