TECHNOLOGY AT WORK

February 2015
Citi GPS: Global Perspectives & Solutions
89
Public investment in promising technologies
for the future could help drive job creation
The surging cost of education is the main
hurdle for workers to adapt to technological
change
The digital age can help to transform
education by lowering costs
MOOCs have already started the
transformation
Predicting the type of new jobs that will emerge is notoriously difficult. Nobody in the
early 20th century would have predicted many of the jobs and industries we have
today, including software engineering, tourism and nanotechnology. Yet, we do have
some idea of the type of jobs that are emerging. Big data architects, cloud services
specialists, iOS developers, digital marketing specialists, and data scientists, are all
occupations that barely existed on LinkedIn only five years ago, resulting from new
technologies. 143 Public investment in promising technologies for the future could
help drive job creation too. Solar energy systems engineers, wind energy engineers,
informatics nurse specialists, bioinformatics scientists, and biomass plant
technicians are new and emerging occupational titles, where public spending could
help facilitate new job creation. To be sure, these are all very different jobs, but they
share one common characteristic: they are significantly more skilled than most jobs
of the past. Although education alone is unlikely to solve the problem of surging
inequality, it remains the most important factor.
Transforming Education
While the concern over technological unemployment has so far proven to be
exaggerated, the reason why human labour has prevailed relates to its ability to
acquire new skills. Yet this will become increasingly challenging as new work
requires a higher degree of cognitive abilities. At a time when technological change
is happening even faster, a main hurdle for workers to adapt is thus the surging
costs of education. In Europe, for example, education is increasingly putting
pressure on government budgets, leading countries like Britain to pass on a growing
share of the costs to students. In America, this has been common practice for some
time — public American universities increased their fees by 27% between 2007 and
2012, while fees in private non-profit universities rose by 28% over the course of the
decade leading up to 2012. Alarmingly, American student debt now amounts to $1.2
trillion, leaving many students with gloomy future prospects as they enter a faltering
labour market. 144
Much of the recent surge in fees stems from an increasing share of resources being
absorbed by administration. According to The Goldwater Institute, the cost of
administration among America’s leading universities has been growing substantially
faster than budgets for teaching and research activities: between 1993 and 2007
the number of teachers and research staff per 100 students grew by 18%, while the
number of full-time administrators surged by 39%.
Fortunately, in the way the digital age is transforming the world of work, it can help
transform education as well. Cost reductions to make education more accessible,
without putting additional pressure on government budgets, can be achieved
through online education. At Georgia Tech, for example, a new online master’s
degree in computing costs less than a third of an on-campus degree — $7,000
instead of $25,000. 145 Costs are also likely to decrease further as online education
makes more big data readily available, allowing an increasing share of
administration work to be automated.
To be sure, MOOCs (Massive Open Online Courses) are already transforming both
schools and higher education. The virtual Khan Academy, for example, already has
about 10 million users, making it the world’s largest school. Yet, red tape often
inhibits the diffusion of new educational models. For example, a key challenge in
the US for education technology companies remains distribution. Vendors in the US
143 Frey (2014)
144 The Economist (2014).
145 Ibid.
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