Education and globalization
For the past fifty years, developed countries dominated the world economy, contributing about two-thirds of the global GDP but today it falls to about a half. If this trend continue, it could be much less than a half in the next few years. The rest of global GDP will be contributed by emerging developing countries. The shift in global GDP is obviously the result of globalization in which developing countries could catch up with developed countries and possible dominate the world economy in the near future. The fact is just less than fifteen years, economies of developing countries such as China, India and Brazil are growing faster than both the U.S and Europe is a significant phenomenon that no one can predict. This achievement is a strong evident that globalization does opens opportunity for countries who know how to take advantage of it and also sends a warning sign to those who ignore it.
Globalization is NOT new, its impacts are well written in books but many people do NOT take it seriously. They only consider it as the opening of more markets to sell products or a new way to get low cost labors. They ignore the fundamental principle which states that economic growth depends on three factors: The supply of workers, their knowledge and skills, and their productivity. As the number of workers in developed countries declines because of low birth rate, many are reaching retirement but NOT being replaced by younger workers, manufacturing outputs are going down as companies outsource works to lower cost countries, so eventually their economies are slowly declining.
For example, Japan's economy grew quickly after World War 2, reached the top around 1980 but began to decline in mid 1990s due to the number of workers began to shrink, the number of retired people is reaching all time high, and current workers are more concerned about keeping their jobs but NOT on anything else. Today Japan is struggling to maintain its position as an economic power. The U.S and Europe are also facing similar issues but able to maintain their strengths due to the high productivity of their skilled workers and their investment in high technology. The financial crisis in 2008 has put a stop to it. Today both the U.S and European countries are struggling from an unprecedented numbers of company went out of business, millions of workers unemployed, many factories closed as their economies fell deeply into recessions.
Why developing countries such as China, India and Brazil are doing so well? In my opinion, these countries all have large supply of younger workers than the U.S and Europe which is one of the factors for economic growth. Another reason is these workers are highly motivated to make their life better by willing to work for much less than their counterparts in the U.S and Europe. That give them significant advantages on costs which bring in more foreign investments and works to their countries. These factors drive their economies to grow in an unprecedented rate, faster than any one can predict. However, the key competition that will determine whether these countries could overtake the U.S and Europe will be on knowledge and skills and this is where education will play an important role.
In we look back in time, we can see that the rapid economic development of Asia since World War 2 started in Japan, South Korea, Taiwan, then to Singapore, and finally to India and China. All of these countries recognize the importance of an educated workforce to drive economic growth. They understand that workers and productivity (cost advantage) are important to start but to maintain the advantage, they must invest in education. Beginning in the 1960s, Japan, South Korea, and Taiwan all started to improve their education systems by providing their people with greater access to better education and they all achieved impressive results. China and India did not start education improvement until 1990s which explain why these two economies are behind in the past thirty years.
India started its education overhaul in the 1980s by sending massive number of professors and students to study abroad and adopt the western education systems. The key focus are on engineering, physics and technology. The Information technology industry is a result of this plan where many foreign-educated students returned and started their own companies. With favorable business environments, with lower costs and high quality, with young and skilled IT workforce who is fluent in English, Indian's IT industry has become the world leader in IT solutions and services. The IT industry has lifted India from an agriculture-based economy into a high technology country. Today the main challenge in India is the huge population that need to receive good education, NOT just a few “privilege people” as in the case of the IT industry. Currently, India government is working on an aggressive education plan for the rest of its citizen to grow into a developed country.
China started its education improvement differently. Instead of adopting the western education systems, its policy is to create its own “world-class education system” by select few universities to receive significant government funding with a focus mainly on manufacturing. The logic is manufacturing can create more jobs for a country with large population. The government also encourage foreign companies to set up factories with favorable business conditions to promote economic growth. The plan worked well for a number of years and China has become the “Factory of the world”. However manufacturing also brings many undesirable consequences such as pollution, contamination of agriculture lands, movement of workers from rural areas to big cities, and too much exports has lead to over dependent on foreign countries. When the financial crisis happened, many countries reduced imports which resulted in the closing of factories, lay off workers and significant unemployment. Recently, China government begins to notice these consequences and begin to focus more on high technology and adopt the western education systems. However the overhauling of the education systems is facing strong resistance from its traditional education systems. One major problem is the limited number of western educated professors to teach the new curriculum. There is also issue between “Older professors” who occupied senior positions and wanted to maintain their way of teaching and “Younger professors” who occupied lower ranking positions but want to adopt new teaching system. Until these issues are resolved, before the reform of traditional approaches to new curricula could take place, China has to send more students to study oversea. In the past three years, the number of Chinese students study abroad has reached over half million each year.
Many people believe that after every downturn the economy always bounced back and the U.S and Europe will be able to recover soon. However, if India and China can improve their education system quickly then the balance of power may shift to their favor. With globalization, things are always uncertain but the question remain is what will happen when these two giants begin to dominate the world economy? What will happen for countries that have ignored the impact of globalization? What will happen to countries with a backward education system? Although no one can predict the future but the longer the education system is not improve, the greater the damage is likely to be. Opportunity is something only happen when you are prepared.
More than ever, I believe education improvement must be the highest priority for every developing countries.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
