The Latest in Economic Development
This week’s blog discusses free online education, the economic impact of hosting a Super Bowl, a new ILO report, and the difficult passage from education to employment. Comment below or send to firstname.lastname@example.org.
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I don’t always agree with Tom Friedman, but when I do, it’s when he’s optimistic about free online education sites like Coursera and Udacity. Simply put, these sites have blown up. Friedman notes that last May, 300,000 students were taking 38 courses through Coursera; today, the site has 2.4 million students taking 214 courses from 33 universities. Friedman likes to imagine how these education platforms could change foreign aid, but in an economic development context, I’m thinking about how they could change workforce development. Nothing can match on-the-job, in-person work experience, but think about how a student could learn – for free – the underlying features of, or how to operate, advanced manufacturing machinery before he or she steps on the factory floor. Right now, many of the courses offered online are purely theoretical, but this is the internet; there’s plenty of room to add more applied subjects. And, as a current Coursera user, if the student is completely committed to the curriculum, these courses do work.
The Super Bowl is this weekend. What’s it worth to the host city, in this case New Orleans? Reuters reports that “officials have estimated the economic impact of the Super Bowl on New Orleans at $434 million, outstripping a projected $238 million for the annual Mardi Gras festival the following week.” But the city has also put up big money in preparation: $350 million on the airport, $95 million on the convention center, and $300 million on the Superdome, where the game will be played. Of course, there are a number of skeptics who dispute the Super Bowl boost. CBS News reports that actual economic activity rarely meets rosy pre-game predictions, mostly due to how the forecasts are formulated. For New Orleans though, Super Bowl weekend is about more than the dollars that will flow into the city. It’s another bright spot on the long road back from the devastation that Katrina brought to this tourist-dependent destination.
Unfortunately, the International Labor Organization released a report last week that predicts a rise in global unemployment and a worsening of the “skills mismatch.” While many (including NLC) are still debating whether the data bare out a true skills mismatch in the US, the ILO uses global data to state its case. The story goes that in the crisis, many workers lost their jobs in industries that were contracting, so the chance of being employed in the same industry was slim. Being forced to switch to a new industry or sector inevitably led to a situation where the worker’s skill set was not suitable to find new employment. Another reason for persistent unemployment is that investment has not returned to pre-crisis levels. The report explains: “The indecision of policymakers in several countries has led to uncertainty about future conditions and reinforced corporate tendencies to increase cash holdings or pay dividends rather than expand capacity and hire new workers.” Get the full report here.
McKinsey has been studying the passage from education to employment – why employers are finding it difficult to find graduates with adequate preparedness for the workplace. Keep in mind that McKinsey tracked global data, but certain themes emerge, such as a disconnect between what education providers think they are offering, what students think they are getting out of education, and what employers are seeing in applicants and new hires. For example, 72% of education providers believe “new graduates are ready to work,” while only 42% of employers and 45% of youth feel this way. Also, “39% of education providers believe the main reason students drop out is that the course study is too difficult, but only 9% of youth say this is the case (they are more apt to blame affordability).” Get the full report here.