Wednesday, April 28, 2010

The New Centre of the World

"A special report on innovation in emerging markets: The world turned upside down." Adrian Woolridge  The Economist, April 15th 2010.

This article attacks the conventional narrative of globalisation, and suggests that it is the 'emerging markets' and not the old core of developed world that is taking the lead on innovation. The old narrative was that we in the west did the smart, clever work, and places like India and China did the boring, donkey work. The iPod story is the textbook example, supposedly, of the total cost of an iPod made in China, only $4 worth is the actual assembly in China. The lions share of the cost is clever, western engineers and marketing people doing clever things that can't be done in China. Not surprisingly, it wasn't going to stay that way for long. The survey tells us how companies in 'emerging markets' driven by local problems of poverty, poor distribution and so on, are making better, cheaper and smarter products than we do in the West.

It's not in the least bit surprising. I always found the idea that the West somehow had an unassailable lead on cleverness was vaguely racist, and sloppy analysis to boot. It was dramatically disproved at Pearl Harbour (or Tsusima if you were a quick learner).

In Education the old core still has the advantage, it is alleged. The article notes that:
"McKinsey reckons that only 25% of India's engineering graduates...and 10% of those with degrees of any kind are qualified to work for a multinational company."
But that apparent advantage will erode quickly. McKinsey might not think they're good enough, but they are young, hungry and cheap. The sheer volume of graduates being produced is intimidating:
"China produces 75,000 people with higher degrees in engineering or computer science and India produces 60,000 every year"
"Between them, these two counties produce twice as many people with advanced degrees in engineering or computer sciences as the United States every year (more if you allow for the fact the 50% of American engineering degrees are awarded to foreigners, most of them Indians of Chinese)"

India and China see education as a strategic imperative, counting production of graduates as a measure of national power, as the Imperial states of Europe once counted production of Coal, Steel and Dreadnoughts. They have a steep hill to climb to build capacity, but will find workarounds. For example, article mentions the Infosys Campus in Mysore, the worlds largest corporate training facility, training 15,000 people a year. It's "harder than Harvard" notes Fortune magazine, taking only 1% of over 1 million applicants.

This kind of workaround is needed for employers to overcome poor quality and supply of graduates. The steady flow west to earn degrees in Europe or the US is another workaround for the wealthiest.  I imagine there is a lot of  other interesting approaches being taken on the ground - the scale of demand offers no alternatives. Places our parents generation associated with famine and poverty are now the worlds middle class, and in the next generation will transition from having a small minority of education to Tertiary level to majority, perhaps even universal tertiary education. Consider the effects of the (much smaller) scale of the GI Bill on tertiary education in the US as an clue of what it will bring.

Even inside the often freshly build walls of conventional universities, a radically different environment and set of drivers as this transition passes will surely create a model of tertiary education very different from what it might be in Harvard, or the Sorbonne.

The scale of the transition will define a new centre of the world in terms of Tertiary Education (and many other things). It is our first world model that will become the outlier - the unusual. Much like English has been adopted as a world language, and becomes a different, richer thing, so too in education. Innovations in practice from places like Mysore will be brought back to the old core. The language of degrees and credits will be taken up by the new, but beneath the names, built from scratch. Perhaps it will not be built as a parrot copy, but as a very different beast indeed.

The survey text is at and there is also interview with the Adrian Woolridge, who wrote the piece.

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