The Future Of Our Economy Rests On Innovating Our Higher Education System
This article first appeared in Forbes.com
Today, there are more than 5.5 million unfilled jobs in the U.S. labor market, up from 3.2 million just five years ago. It’s not due to a lack of workers aspiring for better jobs, but a lack of workers qualified for the very positions employers need filled. America is facing a skills gap that only continues to grow as innovation outpaces our education system.
Entrepreneurs are using new technology to transform commerce, transportation, healthcare, energy and countless other fields. From Silicon Valley to the Heartland, innovation has made our society more prosperous and productive. It has also transformed our labor market, yielding both opportunities and challenges.
From manufacturing to agriculture to data entry, new technologies have displaced parts of our workforce. In the coming decades, many trucking, restaurant and other service jobs will also be automated, allowing fewer workers to accomplish the job of many. A recent study by McKinsey and Company found that nearly half of today’s jobs could be automated using current technology, a challenge on par with the industrial revolutions of the 19th century.
The hard truth is that many Americans will need to find new career paths within the next decade.
Fortunately, jobs requiring creativity, interpersonal skills, dexterity, STEM expertise and abstract thinking will always be in high demand. Unfortunately, we aren’t preparing our students for these opportunities. Today, only a third of high school graduates are college or career ready. The data is even more discouraging when examined in a global context, with American students recently falling to 37th in the world on international math assessments.
How do we help Americans fill the jobs of today and of the future? Choice and innovation in education are the key to transforming our workforce. Thankfully, many of today's educators, bold leaders and leading innovators are already pioneering these endeavors in both K-12 and higher education. Markets have long solved the world's toughest problems, and education should be no exception.
When it comes to improving higher education today, one major obstacle is government bureaucracy. Our government has long set up insidious funding structures that saddle Americans with astronomical student loans, poor educational outcomes and little applicable, real life experience.
Lack of accountability in higher education has allowed for a few unscrupulous bad actors to profit off families and taxpayers, whether or not they equip students with employable skills. Additionally, most non-profit public and private institutions have similarly failed to prepare their students for the future or demonstrate the value of their programs. Under this flawed structure, schools, both public and private, are incentivized to obtain more students in order to secure more federal loans.
Let’s imagine a world where we upend our post-secondary education system and how we collectively – students, families, taxpayers and institutions – provide for it.
Imagine if all schools – from pre-K to doctoral programs – had a real stake in the success of each student. We know from research that accountability policies are most effective when there are real consequences attached.
Imagine if we found more effective ways to incentivize universities, colleges and career training programs to ensure student success, where loans are granted with the expectation of students being provided a high value skill set and where institutions have a financial stake in the students’ future employment prospects? Innovative entrepreneurs would flock to this challenge and there would be no shortage of cutting edge solutions offered by the private sector.
Imagine if more schools embraced Arizona State University’s disruptive model that harnesses the power of technology to revolutionize education at a value that exceeds the investment.
Imagine abolishing the confusing and bloated federal loan program and replacing it with simplified repayment plans that allow students to plot their own paths under a predictable and affordable structure, based on their future income.
In this world, learning institutions and other involved organizations would be forced to care about the real-life future success of their students. They won’t be able to act as diploma factories or ignore the skills demanded by the marketplace. Universities would create degree programs that transparently track the biggest growth industries in the U.S. They would develop low-cost virtual education options to reach students at home. They would develop low-cost virtual education options to reach students at home, and find new ways of using technology to follow-up and support alumni's career success over time.
Long-term outcomes should directly impact a school’s bottom line. Great schools would flourish. Poor schools would be forced out of the system because of a lack of demand. This is likely how education loans would naturally have evolved in an economy free from misguided government intervention
President Obama’s failed efforts in this area reflected his approach to every policy challenge – overregulate, overreach and impede the power of free markets. But, good leaders know that any organization needs to line up incentives towards everybody's long-term success. As the Trump administration and Congress pursue bold reform in a number of policy areas, we hope wholesale transformation of our higher education system and how Americans fund it is part of their agenda. Increasing access, driving down costs, simplifying loans, allowing for innovation and providing more transparency for families would serve as a successful foundation for preparing the next generations of U.S. workers for the competitive global marketplace.
Schools are the lynchpin of a healthy innovation economy. We need a higher education framework that will allow innovators and educators to forge more effective models – and, at the same time, augment free-markets with compassionate aid for the students who need it the most. Unleashing the forces of innovation on our broken education system will empower Americans to thrive for generations to come.
Jeb Bush served as the 43rd Governor of Florida and ran for the 2016 Republican presidential nomination. Joe Lonsdale is a partner at 8VC, a prominent venture capital fund. As an entrepreneur, he founded technology companies including Palantir, Addepar and OpenGov.
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