Thursday, March 25, 2004

Outsourcing is a chicken coming home to roost

And she's a monster...

"The real solution to outsourcing
Equipping all of America's students to compete

Marshall Loeb writes: (CBS.MW) -- Beneath the passionate debate over U.S. companies outsourcing jobs to low-wage foreign workers in far-off countries lies a new and worrisome truth: They're gaining on us.

People in the Third World are rapidly acquiring the skills and knowledge needed to close the gap in the great competitive race against the U.S. It is the race to win -- and hold -- markets around the world.

Robert Hormats, vice chairman (International) of Goldman, Sachs, sums up the issue: "Historically, developing countries have been competing against us on the basis of cheap wages. Now, increasingly, they are competing against us on the basis of high-quality goods. We don't have much alternative to raising the quality of our work force. The answer to the challenge of outsourcing is to address the problems of education and training that we have at home."

In other words, the way to combat outsourcing is not to slap tariffs or import quotas on foreign goods, not to bar U.S. companies from producing their goods and services as efficiently and inexpensively as they can, but to equip American students with the skills and knowledge required to beat the competition in the Darwinian global economy.

That is being done -- but only for part of America's students. U.S. universities are unquestionably the world's best -- not only those of the Ivy League and other elite private schools, but also good old State U. They attract striving students from the world over.

Many suburban and private high schools and primary schools also rank high.

Too many left behind

But not so the public schools in a distressing number of America's big cities and rural communities. The hard truth is that too many of them have produced a generation of semiliterate students.

As our economy grows more competitive and complex, the U.S. is rapidly -- and perhaps dangerously -- becoming two nations.

One America is educated, skilled, confident, secure, equipped to compete in the new global economy. But the other America is undereducated, unskilled, demoralized. Its people, in the urban ghettos and the rural hollows, fall farther and farther behind.

One of our nation's basic challenges is to find the means for the American underclass to lift themselves out of their economic and educational slough. The harsh reality is that many of our public primary and secondary schools are just not educating our young people to get jobs and hold onto them, or even to begin to cope with the increasingly complicated demands of the modern, global economy. Until they do, outsourcing will be a major migraine.

We are not going to end this crisis simply by throwing money at it. But if you think we, the people, can solve it without spending more tax money, think again:

We will have to lengthen the time that the schools are kept open, perhaps from 7 a.m. to 6 p.m. every working day and for a full 12 months every year. We will have to give millions of American kids a place to go and something constructive to do while both of their parents work.
We will have to put a higher premium on being a schoolteacher and we'll have to give that job a loftier status, as it now has in Europe, Asia and elsewhere abroad.
We will have to make teachers more accountable for their work. The educational system must be far more willing to weed out ineffective teachers and reward the superior ones.
We will have to adopt national standards for our students to meet and national testing to measure their performance. The key reason is that if and when they get their jobs, they will be competing not so much against workers in the next town or the nearest big city or the next state but against workers from just about any part of the world.
At the elementary school and high school level, we are not winning the education competition. Goldman Sachs's Hormats points out that when essentially the same math and science tests are given to students from many countries, the U.S. typically hovers around the middle. When compared with students from European and Asian countries, the U.S. ranks low.

Business must lead

If this situation is to be rescued, private business must help take the lead in improving public schools. Business has the talent, the treasure and, yes, the political influence to help change our schools in a most dramatic way.

As an opening step, our business leaders -- those who do the hiring -- should speak up. They need to tell local education officials just what sort of training graduates will need in order for companies to hire them. We need graduates who have a firm grounding in four basic subjects: reading, writing, mathematics and computer sciences.

We are entering an era when whole countries and individual companies will be valued and rewarded according to the quality and exercise of their brainpower. The most valuable form of capital will be human capital, the intelligence and ideas, the resourcefulness and industriousness of a nation's people.

Companies and other institutions will climb or fall along with their ability to seize upon new ideas, to carve out and capture new markets, to invest wisely in research, and to turn research into useful, marketable, urgently demanded goods and services and to make steady, incremental, day-to-day improvements in their products and services. Steadily improving education will go far to create all that.

As Hormats says, "Either we rise or we sink. Every time we have faced global competition, we have prevailed. There is no reason why we can't do it this time."

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