The unavoidable metamorphosis of the labour market: how can education help?

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Maria Gutiérrez-Domènech
February 11th, 2016

After a technological shock, part of the existing labour supply becomes obsolete and must transform to become useful once again. But this metamorphosis is not immediate: there is a tough period of adaptation while workers acquire the knowledge and skills required. When technology advances so quickly the education system cannot adapt at the same pace,1 unemployment and the wage gap increase and, consequently, inequality. Minimising such a period of adjustment is therefore incredibly important and it is vital to anticipate this and design measures in the area of education that help to reduce the costs of this transition.2

No-one doubts that technological innovation offers huge opportunities, also in the field of education as, among other things, it exponentially increases access to knowledge and collaboration between educators in creating material. Learning via online courses, for example, means you have the best teachers, content and methods at a very low cost, in turn encouraging more traditional centres and trainers to modernise in order to compete. However, the impact of technology as a support for education is still small. In spite of the notable increase in technological resources (in 2003 13.4% of teachers in the OECD believed a lack of computers to be a limiting factor on their capacity to teach compared with 8.7% in 2012), there is no evidence that, at present, this greater availability of IT is adding value to teaching. According to the OECD report «Students, Computers and Learning. Making the Connection», students who use computers very frequently at school tend to perform significant worse in most of the areas of learning, even when social differences are taken into account (see the first graph). Similarly, no appreciable improvement has been observed in reading, mathematics or knowledge of science in those countries investing heavily in information and communication technologies (ICTs) in their education systems.

One interpretation of this inappreciable contribution by ICTs to academic results is that intense interaction is required between pupils and teachers in order to understand many concepts and technology might distract from this valuable human contact. Another highly plausible explanation is that we have yet to develop the kind of pedagogical material that takes advantage of technology. In other words, education professionals are still not capable of making the most of technological resources for teaching. In fact, 18% of secondary school teachers in the OECD state that they have a great need for professional development in the use of these tools to produce their classes (see the second graph).3 So we might expect that, as teachers are better trained in using ICTs, the results will be increasingly satisfactory.

The metamorphosis of the education system does not only consist of progressing in the use of ICTs but must go beyond this and identify those attributes that will be most valued in the labour market in the future. Common sense tells us that these will be the attributes that are harder to replace with technology; i.e. exclusive to humans, such as creativity, motivation, innovation, cooperation, intuition, the capacity to communicate and be enterprising, persuasion and originality. In fact, empirical evidence confirms that jobs requiring such non-cognitive qualities have a lower risk of disappearing because they have a comparative advantage over machines (see the article «Will the Fourth Industrial Revolution come to Spain?» in this Dossier). Some of the sectors that require, for the time being, this kind of attribute would be, for example, health, education, social services and art.4

Unfortunately, these characteristics are not given all the importance they deserve in today's educational system. Rote learning still figures too prominently and teaching tends to focus on subjects that were indispensable in the decades when the schools were designed but which are now insufficient in the new environment.5 Given that the teaching practices of the 20th century do not prepare pupils adequately for the star attributes of the 21st century, it is vital to innovate. In other words, educational plans cannot operate by inertia alone but must be continuously updated. Some methodologies that stimulate cooperation, initiative, responsibility and learning through curiosity from the pre-school stage such as the Montessori or Waldorf system tend to achieve excellent results6 and it is no coincidence that the founders of Google, Wikipedia and Amazon went to this kind of school. Another recent trend is the structuring of education via multidisciplinary projects instead of the traditional subjects, with the aim of encouraging pupils to manage their own work, promoting teamwork and the ability to adapt to change.

However, not all educational inventions end up producing the desired outcome. For this reason it is essential to carry out a thorough evaluation and take advantage of the experiences of state of the art centres. Here technology can once again be of great help as it can hugely facilitate and accelerate an analysis of trends in the different training methods. One highly illustrative example is the OECD Education Policy Outlook 2015 which reviews an incredibly varied assortment of educational reforms implemented in different countries between 2008 and 2014 and highlights some interesting cases. For example, the Innolukio programme in Finland connects higher secondary school with companies and supports creative training via different tools such as holding a competition for innovative projects. The excellence of teaching staff is also fundamental to achieving good results in learning and, for this reason, many countries have implemented reforms with this aim in mind, such as the O SAAVA programme in Finland that provides ongoing guidance for teachers, and the GNIST programme in Norway that aims to convert the most qualified students into teachers. Nevertheless, in spite of the large number of new measures the OECD report also points out that in just 10% of the cases was there any formal follow-up after the reform was implemented, so that it is not clear how effectively the goals were reached. More rigorous measurement of the impact of policies therefore seems to be essential in order to develop best practices in education.

In this vital process of reforming the educational system, collaboration between educational centres and companies is fundamental. Knowing the opinion of business people regarding how they see the future of employment could be very useful to redirect education towards those professions less likely to disappear. The results of a survey carried out by the World Economic Forum with multinational executives are compelling: according to the respondents, computing and mathematics will see big growth in a wide range of industries7 but there is a small percentage of men and women in OECD countries (10% and 7% respectively) with this kind of training. This suggests that, today, few workers are qualified to carry out the professions of the future, which confirms the pressing need to redirect education towards this new demand for labour. Greater cooperation between companies and schools is also more viable if there is a well-established dual training system, such as in Germany, Austria and Denmark. In these countries, companies are involved with training to make sure this meets their needs. Moreover, as programmes tend to last more than two years, companies end up recovering the cost of their investment as the student gradually carries out more productive tasks. The fact that several countries are implementing changes in this direction is certainly positive.8

In summary, the technological revolution we are witnessing brings great possibilities but also huge challenges for society. Among other demands it requires an inevitable transformation in education that takes the utmost advantage of ICTs and teaches the new skills of the future. We cannot take our foot off the accelerator or the adverse impact of technical progress in terms of winners and losers will diminish the beneficial effects of new technologies.

Maria Gutiérrez-Domènech

Macroeconomics Unit, Strategic Planning and Research Department, CaixaBank

1. Goldin, C. and Katz, L. F. (2008), «The Race between Education and Technology».

2. Apart from the educational system, the regulatory framework must also be adapted in other aspects to help the labour supply (see the article «How to take advantage of the positive impact of technological change on employment?» in this Dossier).

3. See OECD (2014), «TALIS 2013 Results: An International Perspective on Teaching and Learning», TALIS, OECD Publishing.

4. See Frey, C. B. and Osborne, M. A. (2013), «The Future of Employment: How Susceptible are Jobs to Computerization?», Oxford University Programme on the Impacts of Future Technology.

5. See Brynjolfsson, E. and McAfee (2014), «The Second Machine Age».

6. See OECD (2013), «Innovative Learning Environments, Educational Research and Innovation», OECD Publishing.

7. See the World Economic Forum (2015), «The Future of Jobs: Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution».

8. See OECD (2015), «Education at a Glance: OECD Indicators», OECD Publishing.

Maria Gutiérrez-Domènech