The knowledge economy
As the “Information Age” emerges and replaces The Industrial age, it creates a major problem: High unemployment labor workforce as automation and robots have reduced the number of labor jobs to a minimum. A well-known economist complained: “The new knowledge economy rewards people with college education and punishes people without it. Overall, people with college degrees make two to three times more than people without a college education. It makes the gap between the rich and the poor not just larger but also deeper. Without proper trainings and education, lesser educated people will never have a chance to escape poverty.”
Information technology increases productivity, efficiency and profits but at the same time reduce the use of labor workers resulting in a big gap between knowledge workers who are college educate and labor workers who only have a high school education. For the past thirty years, technology have created more jobs and prosperity for a few highly educated people but put a lot of lesser educated people out of work. Economists all over the world are worried that the knowledge economy driven by technologies could allow highly educated people, especially people with technology skills, to capture more of the world's wealth while the share going to lesser educated people is fallen fast which could lead to more extreme poverty and economic problems ahead to many countries. One economist wrote: “The stability of traditional economic systems such as product markets, company structures, and business relationships have been completely shattered by the fast rate of technological change. It will bring down many established companies because in this knowledge economy innovation and access to knowledge and skills are more important than assets and capital which are the foundation of the industrial age. Since technology is the driver of all innovations, who have the best technology will gain competitive advantages and who do not have will suffer the consequence. Today business is no longer be restricted within a boundary of a country or city but the ability to tap into the global networks. Therefore, the most successful cities and countries will be those that are best at linking their businesses to the global economy. For example, Hong Kong, Singapore, Taiwan, and Tokyo have enjoyed significant economic transformation because of this capability.”
With the knowledge economy, there is a growing need for workers who can function with new set of knowledge and skills rather than low-skilled labor workers who can only function with routine knowledge. Countries that cannot produce enough knowledge workers will not be able to compete and may fall backward into poverty. Since the prosperity of the economy is depending on the innovations of technology, the training and education in technology must be encouraged and given top priority. With proper actions, developing countries can take advantages of this opportunities to prosper and move up to a stable economy and be able to compete. According to several studies, global economy will create over fifty million new jobs in the next five years but most of them will require workers with at least a Bachelor's degree in science, technology, engineering and math (STEM). Today less than 30% of people in developing countries have college education and only 12% of them have trainings in STEM areas since their economies are still depending on labor works instead of technical works.
Today college students must have knowledge about The Information age and what is happening in the knowledge economy so they can prepare. They should know that their future careers require STEM skills. By preparing, students should get more science, technology, engineering and math trainings to pursue a STEM career. This also means that the education system must have more math and science teachers to provide the needed trainings. Every students must be prepared for their careers earlier and career planning should be a required course in high school education.
As the world is changing rapidly, innovations will continue to bring prosperity to some countries and the big gap in STEM means that jobs in some countries will continue to be vacant while millions of people in other countries will struggle to earn a living. To avoid this situation, developing countries must start with more teacher training because education improvement always begin with the teachers.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
