The Future of Education
Subscribers will be familiar with how excited we are at the pace of technological innovation. It is resulting both in beneficial deflation and enhancing the productive capacity of economies. These factors are some of the key building blocks required to fuel a secular bull market. Nevertheless, there is widespread angst about the role this will have on the ability of people to find productive employment.
A job for life is no longer realistic for the vast majority of people but that is old news. What is new is that more people will have to learn to adapt to a rapidly changing environment. It is looking increasingly likely that people will no longer be paid to be bored. Long haul driving, assembly line jobs and other, often mundane, repetitive jobs will eventually be outsourced to machines. The timeline for this migration will be measured in decades but there will inevitable be a requirement for a lot more skilled workers.
My father spent four months in Florence in 1969 and 1971 learning to service the knitting machines Pretty Poly was installing in the factory he was working in. Before it closed in 1995, (Ireland was no longer a low cost manufacturing centre), he had been through numerous training courses on the use of computer operated knitting machines. The number of people working the line of machines had decreased in that time but the technical knowhow required to do the job had increased. Factory employees have long been among those challenged to learn new skills. As technological innovation accelerates ever more people will be challenged to learn new skills and to adapt to a rapidly changing environment.
We are increasingly presented with the tools necessary to learn new skills on our own. Many people despair at the ability of schools to produce workers with the skills required to do the jobs that are available. However, the more important aim is to ensure students know how to learn and the have skills necessary for independent learning. Even in that regard the scene is rapidly changing. Games are developing so intelligently that we are learning without the needs for classes. For example download the Mind Snacks game for the language of your choice via your smartphone. I was amazed at how quickly my kids went from a standing start in Spanish to reasonable proficiency in reading and writing in the space of just a few months. It has also helped me improve my poor Mandarin skill which has been welcomed by Mrs.Treacy.
The range of courses offered on Udacity.com is increasing rapidly and the focus remains on equipping students with the skills necessary to land a job in the technology sector. Arizona State University’s increasing online presence is an additional example. When one looks at the rapid rise in the cost of university, particularly in the USA, the future evolution of these institutions may be as finishing schools where one attends part time for networking and hands on training with specialised pieces of equipment but where much of the work is done off campus.
One of the reasons Pearson has been so successful is that the price of academic materials has so far been relatively immune to price pressure even though university quality education is moving online. The share has returned to test the region of the 2013 peak. It is susceptible to some consolidation of recent gains and possibly mean reversion but a sustained move below the 200-day MA would be required to question medium-term scope for additional upside.