Technology, Returns to Scale, and Education: Why Now Is The Time To Invest In Our Workers’ Coding and Math Skills


As a preview to the 2015 State of the Union address, President Obama announced a national initiative to offer free community college to students “if they earn good grades and stay on track to graduate.” I see this as good news. The strong relationship between earnings and educational attainment is well known, and given today’s increasingly competitive and globalized economy, investing in our human capital will give our workforce a much-needed edge in the world. Providing community college to Americans will have another, more direct benefit, as a new generation of students foregoes thousands, if not tens of thousands, of dollars in debt, and money that would otherwise have gone to paying student loans gets invested in the economy.

Assuming the measure survives Congress, this initiative presents a growth opportunity the likes of which not seen since the Industrial Revolution, but rather than a build-up of manufacturing, we have an opportunity to invest in our human capital by giving our workforce a set of productivity-enhancing skills in computing and math. Considering that the services industry accounts for 68% of US GDP, such an investment would present significant micro- and macro-economic benefits. From the tech boom of the 1990s, where technological change led to a substantial growth in productivity, to The Rise of Big Data, and its ability to bring insight from vast amounts of disaggregate information, history shows that the intersection of man, machine, and knowledge often produces newfound efficiencies and greater output.

And while computer and mathematical occupations will be among the top five in terms of growth by 2022 (up 18% from 2012), the question on my mind is, will American workers be prepared to meet the demand? By various measures, the answer seems to be no: research by the Brookings institution observed that “sub-bachelor’s STEM job openings take longer to fill than non-STEM jobs requiring a bachelor’s degree.” More to the point, the International Data Corporation reported that 1.7 million cloud-based jobs went unfilled in 2012 due to a lack of “training and certification among jobseekers.” If American workers are to meet this and future demand, education must be our top priority.

Arming workers with quantitative and programming skills would have the added benefit of democratizing what has usually been the business of a few giants in the private sector: IBM, for example, has all but abandoned the PC and server retail business, focusing instead on business consulting, using technology to optimize the operations of its clients. Though consulting firms often do great work, hiring big name firms to improve business processes may not always be right for firms that need to innovate often. An IBM consultant may run a firm anywhere between $26 to nearly $300/hour. In addition, deliverables may be subject to licensing agreements. Considering that consulting solutions are but a point in a vector, firms facing constant change need the organic capacity to adjust, and a smart workforce at the front lines of business operations offers that flexibility.

One particular criticism of the President’s initiative has been, “where will the money come from?” There is no such thing as a free lunch, opponents say, and I suppose they’re right. I support community college for all, not on political grounds, but for the sake of our economic prosperity. I encourage opponents of this proposal to become familiar with another concept: opportunity cost. When we refuse to even invest in our education, what are we really giving up? For the opportunity to educate millions of Americans, to make them more competitive workers, and boost our own productivity, what better use could we give to 60 billion dollars? A month in Iraq? 15% of the entire Joint Strike Fighter program?

Originally published at

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