Post-Secondary Education for the New Era

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Post-Secondary Education for the New Era

As highlighted earlier, exceeding 4 percent long-term growth depends on combining annualized productivity growth of roughly 2.5 percent with human capital growing at 1.5 percent to 2 percent per year. By returning the workforce participation rate to its previous highs and effectively managing immigration, we can certainly grow the workforce at the rate required.

However, since America’s post-secondary education system is not delivering enough skilled workers to meet even today’s more modest needs, how will it fill these additional openings?

For decades, vocational education has suffered from the twin curses of low status and limited innovation. Politicians have equated higher education with traditional universities of the sort that they themselves attended. Parents have steered children away from “shop class”—and vocational studies have been left to languish.

However, that’s finally beginning to change, both in North America and the EU. There are good reasons why vocational education should be gaining ground. Specifically, 45 percent of American employers surveyed by McKinsey said they have left a vacancy open because they cannot find anyone with the right attributes; about one-third said that the lack of skills is causing big problems for their business.1

At the same time, 44 percent of American youths surveyed by McKinsey reported that their post-secondary studies improved their employment opportunities. And while 72 percent of educators believed that graduates were ready for employment, only 45 percent of youth and 42 percent of employers agreed. These data reveal that today’s post-secondary education fails to equip people to successfully exploit current and emerging economic opportunities.

And pumping more money into conventional solutions has only exacerbated the problem. In fact, the bubble of “traditional university education” is beginning to burst.

Democratizing universities has proven an expensive and inefficient way of providing mass higher education. To date, Americans have taken on more than $1 trillion in student debt.

But a growing number of college graduates, who were taught by PhD students rather than professors, forced to subsidize bloated administrative overheads, and awarded a college diploma that no longer automatically brings a desirable job, think that they got poor value for their money...

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