3/8/2013: Humanities: Don't Just Discount the Vital Set of Skills

Over a month ago, I wrote in the Sunday Times about the topic of balance in education between the humanities and sciences and led this point toward the reforms needed. Last week, Washington Post run a story worth reading on the same subject: http://www.washingtonpost.com/blogs/innovations/wp/2013/07/30/we-need-more-humanities-majors/

My original article and few more links on the topic is here:

http://www.fergco.co/2013/07/272013-sunday-times-june-30-2013-irish.html

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4/7/2013: Jobs Creation by State Agencies

Per press reports today: "IRELAND'S enterprise development agencies created nearly 9,000 net jobs in 2012, new statistics outlined." The reports reference the findings of the Forfas 2012 Annual Employment Survey (linked at the bottom) which showed that "total permanent full-time employment in agency-assisted companies operating in all sectors amounted to 294,785 in 2012, a net increase of 8,975 jobs or 3.1pc."

The quoted statement above is nonsensical and should not have been made. Here's why:

1. These jobs were created by companies working with the agencies, not by agencies themselves. In simple terms, "Ireland's enterprise development agencies" have not created any of these jobs, although they might have been helpful in bringing these jobs to Ireland or helping companies in developing activities that resulted in these jobs creation. 
2. In some instances, working with the agency involves not much more than obtaining an investment from an agency-supported fund that is not actively administered or managed by the agency. In this case, a company 'client' of the agency does not have much of an engagement with the agency at all. In a sense, such jobs creation by the agency amounts to the jobs creation by the financial investors - they provide funds for jobs that are to be created - with or without them, sometimes - but they do not actively 'create' jobs.
3. Net jobs created claim relates to gross increase in total employment during 2012 over 2011 final figure. This increase in its entirety does not accrue to the company activities with the agencies. For example, a mature enterprise can be engaged with an agency in developing new markets for exports. The enterprise might hire new workers for work totally unrelated to its engagement with the agency. Should the credit for these jobs additions go to the agency? Let's put this differently: suppose you broker a deal between companies 1 & 2 to purchase good X by 1 from 2. Should you get credit for company 1 buying from company 2 good A as well? 
4. Net jobs creation on the year 2011 assumes that these are new jobs added. This is also not true. It might be a job that replaces a layoff or redundancy that took place in 2011, but was not filled for 3-4 (or longer) months and thus hiring took place in 2012. What happens? Level of 2011 employment that serves as a base decreases by 1 job, level of employment in 2012 increases by 1. New jobs created = zero, yet Forfas study reports a net jobs creation of 1.
5. The survey includes Ireland-based MNCs, which have multi-annual jobs rolls, so the point (4) above applies to their activities even more significantly than for domestic enterprises. 5,747 of the 8,975 jobs were 'created' in foreign-owned MNCs
6. The survey also includes a number of larger internationally-trading Irish firms. Some of the jobs added could have been created and announced before the company was engaged with the state agency, but their filling was delayed until 2012 when the company was engaged with the agency.
7.  Many of the firms covered in the survey are mature and established firms and are no longer 'assisted' in any meaningful way by the state agencies, since they have long-term established operations in Ireland. A standard practice in business is when a broker of a deal gets a commission for the deal. The broker usually ceases to be compensated for any future deals signed by the two companies engaged in the original transaction once the original transaction is over. In the case of the Irish state agencies, the credit seems to flow unabated regardless of whether their work does directly contribute to the jobs creation or not.
8. In some cases, 'net jobs created' by agencies-assisted companies can be actually poorly accounted jobs rotations within the economy. Example: an agency providing outsourcing service to, say, Nama moves into the country assisted by one of the international FDI agencies in the state. It creates 100 jobs that are counted as new. Yet it takes on 100 staff from the previously closed domestic agency that was not assisted by the agency. Net jobs creation in state agencies assisted companies +100. Net jobs creation in Irish economy = 0.

These are at least some of the reasons why both the 8,975 jobs additions can be questioned and why in general none of these jobs were 'created' by the state agencies and not all of these jobs relate to the activities with which the state agencies are engaged.

There is also a reason to question the very word 'permanent' jobs. If they are permanent, then why has the employment levels in agencies-assisted firms still running below 2006 peak? Permanent is permanent, right?

And it really is not needed to make silly statements of this sort - some of the agencies - e.g. EI and IDA - are doing excellent work in many areas and are wanting in other. This is natural for any agency and any enterprise. The point is not to brow-beat them for the latter nor to ignore it, and it is also not to over-praise them for the former. What is needed is more precise and more transparent accounting and reporting. Alas, Forfas doesn't really deliver on that and never did. Instead we have a report full of chart, numbers and tables that offer little deep insight and even less real analysis.

Full Forfas report is here: http://www.forfas.ie/media/04072013-Annual_Employment_Survey_2012-Publication.pdf

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2/7/2013: Sunday Times, June 30, 2013: Irish education system reforms

This is an unedited version of my Sunday Times article from June 30, 2013.

Note: an interesting related article on human capital and values of innovation and creativity linked to education in humanities is here: http://qz.com/98892/the-humanities-are-not-in-crisis-in-fact-theyre-doing-great/ and on the need to link various fields of inquiry in education systems: http://www.farnamstreetblog.com/2013/06/how-great-ideas-emerge/?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+68131+%28Farnam+Street%29


Since times immemorial Irish political and business elites have been fascinated by technocratic ideals. From the 1990s on, the state bodies like Fas and Forfas have pushed forward the worldview in which Ireland required an ever-increasing investment in advanced specialist and technical education and training in ICT, chemical, software, and general engineering.

The ICT manufacturing is now largely the story of the past, as is the dot.com bubble. The pharma story is fizzling out on foot of expiring super-drugs patents, with last week’s patent expiration for Viagra being case in point. Biopharma is too small to replace lost exports revenues and shrinking FDI from pharma.

As the latest quarterly national accounts for Q1 2013 released this week illustrate, traditional specialist areas of exports are no longer sustaining growth in Ireland. Stripping out the contributions by the tax-optimising ICT services multinationals, our economy is in a structural decline. Seasonally-adjusted industry activity is down year on year, and goods exports have fallen 9.2%. Investment is down both year on year and quarter on quarter. All areas of activity that are linked to the real exports production in the country are down. This decline is driven by the fact that we are falling behind the innovation curve in creation of new enterprises, products, services and investment opportunities.

In line with Irish experience, this month Finnish authorities were forced to revise down their own forecasts for 2013-2014 economic growth from an average of 1.0% per annum to 0.4%. The downgrade was linked, in part, to Finland's struggle to maintain competitive edge in traditional manufacturing, which is falling behind on products and services design and innovation, despite, or may be even because Finland concentrated too much of its resources on technical ICT investments and skills.

Still, policies of fetishising technocracy roll on. From science advisory bodies and MNCs HQs, to the IDA and Enterprise Ireland, our decision makers are promoting an economy based on software codes, data analytics and cloud computing. No one seems to think that the resulting education and skills strategies alignment with the technical needs of these sectors can risk being reactive to the immediate global markets demands, instead of moving ahead of the curve.

Recent research and news flow from around the world shows that innovation is becoming more focused on increased customization, design and creativity of products and services. These require the exact opposites of the purely technocratic approach to education and training. This is a bigger and longer trend, and we are nowhere near capturing it in our education and training systems.

Ireland's policy leaders pay vast amounts of lip service to the Silicon Valley - world's largest cluster of technological innovation and investment. The development agencies, like IDA and Enterprise Ireland commonly cite it as an inspirational example in the context of Ireland’s need to promote education in maths, hard sciences and tech. Their logic is that concentrations of locally-based technological skills and research translate into Silicon Valley-styled success. Many in Ireland, contrary to the evidence from the US research, still link academic institutions clustering in the Northern California to the Silicon Valley formation and achievements.

This logic is over-simplifying the reality. Recent studies from Harvard and Duke University show that less than half of all CEOs and chief technology officers working in the Silicon Valley firms hold advanced degrees. Only 37 percent of all degrees held by the Silicon Valley executives are in the areas of engineering or ICT. Only two percent held a degree in mathematics. Vast majority of undergraduate and graduate degrees held by business leaders in the Silicon Valley are in the so-called ‘soft fields’ such as business, finance, and arts and humanities. Put simply, there are more liberal arts graduates steering Silicon Valley companies than physical sciences graduates.

What about the skills demands of the cutting edge innovation firms and start-ups? In 2011 Bill Gates and Steve Jobs publicly clashed in their views on the future needs for skills and education. In his speech to the US National Governors Association, Gates stated that education should focus limited resources on areas and disciplines that are positively correlated with jobs creation. This implies technical ICT skills. Days later, Steve Jobs identified Apple's success with "technology married with liberal arts, married with the humanities".

Jobs was not alone in this recognition. Carol Geary Schneider, president of the American Association of Colleges and Universities says that liberal arts-linked skills and knowledge are critical to the long-term employability of the workforce. Schneider called Gates’ ideas on technically-focused demand-driven education as "much too narrow and unsettlingly dated”. “The question to ask is not: which [degrees] do the best in initial job placement, but rather, which institutions are sending their graduates forth with big picture knowledge, strong intellectual skills and the demonstrated ability to integrate and apply diverse kinds of learning to new settings and challenges,” she said. Per Jobs and Schneider, and many other analysts and business leaders, arts and tech deserve shared credit in driving world's most successful and most important innovative companies since the late 1990s.

The link between humanities, arts, design and value added in business and across economies is now widely regarded as the source for future growth. The global investment community is starting to treat design-focused technologies and innovation as a new Klondike.

This month, the Pictet Report, a quarterly publication aimed at professional and institutional investors produced by one of the largest and oldest private banks in the world, is devoted in its entirety to creativity-driven disruptive innovation. The main focus, of course, is on investment opportunities linked to such innovation.

Last week, Brimingham hosted a major design expo aimed at "showcasing authentic, regionally-based brands and upcoming graduate and entrepreneurial talent". Birmingham-Made-Me Expo is an extension of the UK-wide movement and policy nexus that attempts to re-position design-driven innovation and entrepreneurship at the heart of the future economy. The UK Government is pumping significant resources behind these efforts.

In the mean time, shortages of ICT professionals, while still evident in Ireland, are becoming less acute across the broader world. Reports from India show that the country is producing an oversupply of ICT engineers and technicians, with estimated 50,000 graduates facing a prospect of underemployment in the near future. The problem is acute enough for India's Commerce and Industry Minister, Anand Sharma, to plead with London this week to relax visa caps for Indian ICT workers seeking jobs in the UK.

Even in the fields of big data and cloud computing, technical skills are a dime-a-dozen, as I noted in a recent speech at a cloud computing conference hosted by DCU. What is truly lacking in these areas is the ability to creatively enrich data insights via user-centric visualization of data, and development of applications that drive deeper into customisation of business. Being able to capture, store and process data is a mass-produced commodity. High value-added future opportunities will be found in delivering communicable and actionable insights out of this data that can enable products and services innovation and individualisation.

The world of innovative and high value-added economies is moving in the direction of embracing more broadly-based creativity, intelligent design, consumer-focused disruptive innovation. In this light, Irish education system must be reformed to bring it into the future, not to chase the immediate skills shortages. While we do need to maintain strong efforts in areas of education linked to software programming, design and engineering, as well as maths and sciences, we also need to develop complex aesthetic, social and design-intensive capabilities. And the former is probably less important in the longer run than the latter, especially if we can succeed in aligning ‘softer’ skills with entrepreneurial and business capabilities on the ground.

At the pre-tertiary education level, we need to focus our education on developing basic literacy skills in arts, humanities, as well as in sciences and ICT. Early exposure to web-based applications, even some coding, is a good anchor for such literacy. Alongside, we need to revise our curricula for history, literature and arts. Religious education and mandatory Irish must be absorbed into electives. Time and teaching resources freed from these should be used to give students good anchoring in world history, philosophy, logic, and art.

It is time for investing in specialization-focused schools to reflect not geographic distribution of students, but students’ talents and interests. Specialist curriculum schools focusing, differentially, on arts and humanities, as well as those focusing on sciences and ICT should be prioritized for future development in larger urban areas. Every IT school and University in the country should be required to run significant Young Scholars Academies offering regular engagement opportunities for children with talent and aptitude. These Academies can act as formal facilitators for their entry into higher education.
We also need to remove our reliance on standardized examinations for progression of students through the entire system of education.

Third level education must support the objectives of making our workforce skills and knowledge base broader. We need restore a four-year degree system. Third level degrees curriculum must explicitly require, not just encourage, students’ exposure to studies beyond their immediate major. Students in technical fields must be exposed to basics of humanities and arts. Students in arts and humanities must be literate in ICT and sciences.

Fourth level education too should be used to further enhance the above processes. We need to develop cross-collaborative MSc and PhD degrees and provide for supplementary degree programmes (joint MSc and diploma packages) for students interested in working on the boundaries of diverse disciplines, such as, for example, creative arts and technology, quantitative analytics and marketing, behavioural economics, and product and servcies design. Industry experience and achievement should form the foundation of enlarged and better-structured adjunct faculty. Subject to peer review, industry research should count as an integral part of academic and adjunct faculty evaluations.

In life-long learning, we need flexible programmes allowing for research-focused studies that can stretch over a number of years. Linked directly to work-related projects and topics, these should lead to degrees being awarded in the end, subject, again, to mature students engaging with minimum of a broader curriculum outside their field of competency.

Box-out:

This week, CSO published the latest data on new planning permissions granted in Ireland, covering Q1 2013. The publication was greeted with a chorus of 'good news' reports, as data showed increases in the Number of Dwelling Units approved. Per official statistics, these rose 31% for houses, and 3.9% for apartments. All increases reported reference quarterly rises. There are several problems with the upbeat reports, however. Number of permissions for houses actually fell year-on-year by a significant 9.31% reaching the second lowest level in history of the data series. Number of permissions for apartments also fell, by 18.4% on Q1 2012. More ominously, aggregate activity in the construction sector, as measured by the new permissions granted, shrunk across the board. Total number of planning permissions granted in the state was down 1.35% quarter-on-quarter and down 2.76% year on year, hitting absolute lowest point for any quarter since Q1 1975. Across the board, it is pretty safe to say that the Q1 2013 data does not warrant much enthusiasm, despite the aggressive spin put on it by some media reports.

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