Employment prospects and salary levels improve dramatically as education levels increase. These combine to result in big gains in lifetime earnings at each progressive level of the education ladder. College grads (and especially advanced degree holders) have much higher earnings and suffer far less unemployment than do high-school graduates (not to speak of those without a high school degree. Lifetime earnings of high school graduates average about $973,000 in 2009 dollars, compared with about $1.7 million for those with associate degrees, $2.3 million for those with bachelors and $3.6 million for those with professional degrees.

Moreover, these differences are getting wider. Pay for college graduates has risen by 15.7% (adjusted for inflation) over the past 32 years, compared with an average decline of 25.7% for those workers without college degrees. And this does not even begin to account for non-economic advantages held by college graduates, including lower divorce rates, fewer single-parent families and longer life expectancies.

Higher-Education: High-Skill Holy Grail?

At first glance, given the employment, income and other disparities, it may appear that any student, with a real choice in the matter, should get at least a baccalaureate degree, and ideally, a Masters, PhD or Professional degree. In addition to the benefits discussed above, the Bureau of Labor Statistics’ (BLS’) Employment Projections—2010-20 project projects that occupations in which a master’s degree or higher is typically required, are expected to grow at the fastest rate of any other education category (21.7% for masters and 19.9% for doctoral or professional degrees—especially in healthcare-related professions).

On the other hand, however, the report projects that only 3 of the 30 occupations that BLS expects to produce the largest number of job openings by 2020 are expected to require a bachelor’s degree or higher—teachers, college professors and accountants. But even these careers will face big challenges. Teacher and college hiring are both suffering from big government funding cuts that threaten to greatly reduce both the pay and the fabled job security these jobs offer. Accountants, meanwhile, are subject to the same type of offshoring pressures as a number of other high-skill jobs. And then there is the increasingly critical issue of the costs (both explicit and implicit opportunity costs) of attending college, the burden of college debt and the increasingly asked question as to whether the “return” from a college education is worth the “investment.”

This incredibly complex question entails much more than an ROI analysis. It is also highly situational, depending on factors including the student’s grades, motivation, objectives and family situation. Even if you focus exclusively on employability and salary, the answer varies greatly by factors including:

• Which school on is talking about, Harvard or the proverbial Podunk State?
• Cost of tuition—is it a private or public school, what type of financial aid is available, can you ameliorate expenses such as by living at home or working part time?
• The breadth and depth of one’s personal network, which is still one of the most important determinants as to whether and what type of job one can get.

Most important, however, is the field of study. As shown in the BLS Employment Projections report, philosophy, anthropology, zoology, art history and humanities graduates are the least likely to find jobs. Those majoring in engineering, math, biology, computer science, accounting and economics are not only far more likely to find jobs, they are also more likely to get jobs in their field and earn higher salaries.

A more dated BLS report looked specifically at starting salaries for a range of liberal arts majors. Overall, liberal arts graduates of highly selective Ivy League and other Tier One schools often have reasonable success in finding jobs, almost regardless of their major—even among hedge funds and management consulting firms. Often, 80% or more of such graduates either go on to graduate school or get jobs at, or soon after, graduation.

The same is sometimes true of particularly attractive graduates of less selective programs. Morgan Stanley, for example, may obtain 25-30% of its undergraduate hires out of liberal arts programs, and then provide them with more functional training through online courses and training programs.

Community Colleges: The Other Higher Education

Higher education does not necessarily mean a four-year degree. Community colleges, often viewed as something of a poor stepchild of the university, play critical roles in educating many first-generation students who would not otherwise have a chance for a college education and play a key role as a low-cost “feeder system” for four-year schools. Just as importantly, they are often far-more attuned to the skills requirements of local businesses. Some of these schools design classes, certification programs and even associate degree programs in conjunction with, and serve as training arms for these businesses.

The single fastest projected employment growth (in terms of numbers) is for Registered Nurses. In fact, these jobs, plus those of 5 of the 30 fastest growing (in percentage terms) jobs in the country—all of which are also in healthcare—all require Associate Degrees (rather than Bachelors or advanced degrees) as their minimum educational requirements. Community colleges are also instrumental in preparing the next lower skill (and often wage) workers—those that must take certification courses and pass exams as either a formal or informal qualification for jobs.

Even many above-average paying jobs that don’t require a formal post-secondary degree of certificate often require a less formal education program, such as an apprenticeship program. In fact, occupations that require apprenticeships are expected to be the fastest growing of all jobs that require some form of on-the-job training. Some of these—especially those that require demonstrated technical competence—are among the highest paid and most difficult to fill positions in today’s job market. They are likely to occupy the same position in tomorrow’s job market..

As I discussed in my August 2 blog, The Great Recession, especially when combined with the rapid growth in the automation and globalization of jobs, has exacerbated the bifurcation of the U.S. labor force. Those who have traditionally performed mid-skill jobs face the biggest dislocations. Low-skill workers, however, face the most pain.

The Disappearance of Mid-Market Jobs

The vast mid-market, in which millions of moderately skilled high-school and college graduates had made rewarding, life-time careers, is under siege. True, the number of such mid-market jobs will certainly grow when a cyclical recovery really begins to take hold. The problem is that the four big structural trends—automation, globalization, flexible hiring and unpredictable volatility—promise to keep a tight lid on both the pace and the extent of the mid-tier jobs recovery. They will also keep a lid on both the compensation and the security of these jobs.

What will happen to those mid-skill/mid-income blue- and white-collar jobs that form the foundation of great American middle class?

That future is already being played out. Even as the economy begins to recover, globalization (offshoring) and technology (i.e., automation) will continue to eliminate and/or significantly change the type of skills required to perform these increasingly routine, relatively low-discretion jobs. Think, for example of how computer numerical control (CNC) machine tools eliminated the need for millions of assembly line workers and created new demands for computer-literate, numerically-proficient operators.

What happens to the people who have been displaced by these jobs? They must either learn these new skills (for which there are orders of magnitude fewer jobs available), re-train for other functions (often with very mixed success) or compete with millions of other less-skilled workers for much lower-paying low-skill/low-pay non-tradeable service jobs (jobs which must be performed locally and are difficult or impossible to automate).

The same forces are affecting mid-skill/mid-pay office workers. Secretaries and switchboard operators have lost their jobs to automation and accountants, and financial and marketing analysts have had to learn entirely new skills and provide new types of value. Meanwhile, millions of mid-level office jobs, such as accounts payable/receivable, account reconciliation and computer programming have long-since been at least partially automated or moved offshore, to be performed by much lower-cost, and in some cases, better educated workers.

Employees who have traditionally performed these functions can, in theory, be reeducated or retained to perform higher-level functions. In practice, the relatively small number of very higher-skill jobs that are being created are being overwhelmed by the losses in huge, well-paying mid-skill segments, such as construction and manufacturing, and among the ranks of mid-level administrative and supervisory and low-level managerial workers. Meanwhile, efforts to retrain/educate these people for higher-value functions often yield very mixed results.

And, as if these job losses weren’t bad enough, these workers are now joined by millions of government employees and educators who are falling victims to big cuts in government funding.

The Plight of Low-Skill Workers

Meanwhile, growth at the low end of the jobs market has been growing (albeit very slowly), even during the recession. Perpetual high-growth segments, such as healthcare, continue to grow while industries such as retail and hospitality have begun to rehire. The problem is two-fold:

1. Many such jobs typically offer very low-pay and little job security and
2. Mid-skill workers and recent college graduates, locked out of traditional markets for mid-range jobs, are now competing with high-school graduates and even drop-outs for these low-skill jobs.

So, while the recession, combined with forces including automation and globalization, are taking a bigger toll on mid-skill jobs than they are on low-skill jobs, it is the least educated workers who are, by far, the biggest losers. If you think the market for new college graduates is grim (and it certainly is), the market for less-educated workers is appalling.

Employment prospects and salary levels fall precipitously as education levels decline. These combine to result in huge disparities in lifetime earnings.

Is higher education the Great American Hope? The answer, as I’ll discuss in my September 30 blog is, yes but………

The composition of the U.S. economy, like those of other countries, is in a continual state of flux. While it began as an almost exclusively agrarian economy, it began migrating to a manufacturing, or product-based economy in the 1800s. By 1950, manufacturing accounted for almost 60% of all U.S. jobs. Since then, the services component of the economy has been on a tear: It now accounts for more than 75% of all U.S. jobs, with manufacturing falling to less than 25% and agriculture a mere 1%. Although the capital-intensive manufacturing continues to grow in dollar revenues, its percentage of GDP, and especially its percentage of jobs, is dwarfed by the highly labor-intensive services sector.

Services, however, come in many different flavors. There are, for example, professional and business services (the largest slice of the services pie), followed by healthcare, leisure and hospitality, retail and wholesale, education and so forth. But while this industry-based view is, as discussed below, certainly important in assessing where the new jobs will be, another form of segmentation tells us much more about the type of jobs that will grow fastest, be most secure, and provide the best salaries and benefits. This division is among:

1. High-skill/high-pay jobs, the top of the labor pyramid, is occupied largely by university and graduate school-educated professionals with specialized knowledge-based skills, such as business managers and executives, engineers, doctors and lawyers;
2. Middle-skill/middle-pay jobs, the foundation of the middle-class economy, consist of relatively solid and relatively well-paying and secure blue-collar (such as construction and manufacturing) and white-collar (such to mid-level office managers) professions; and
3. Low-skill/low-pay “commodity” jobs (such as fast-food clerks, hospital orderlies and security guards), which typically employ lesser-educated workers, generally require little training and provide low pay and limited job security.

In the old days, which was roughly from post-World War II through the 1980s, each of these segments was relatively large and rapidly growing. All was well, or so it seemed.

The U.S. job market, however, was at the beginning of a big transition. The broad, multi-tiered job market, in which people of virtually every type and level of education, skill and talent could find a job, had begun to disappear.

As explained in a July 4^th Wall Street Journal article, a 2010 study by MIT economists David Autor and Daron Acemoglu (Skills, Tasks and Technologies: Implications for Employment and Earnings,) divided the U.S. labor force into 318 occupations based on skill and education levels, and examined the change in the number of jobs over almost 50 years. Although growth rates vary greatly year-by-year, the number of low-skill/education/pay and high-skill/education/pay jobs both surged over the 18 years between 1989 and 2007. On the other hand, mid-skill jobs languished: growing a mere 5% over the same period.

Then came the Great Recession. This, combined with the four key structural trends discussed in my June 24^th blog (automation, globalization, flexible hiring and unpredictable volatility), changed the face of the U.S. job market. While the number of most low-skill (with the notable exception of home and health care aides) and high-skill jobs essentially stayed the same between 2008 and 2010, increasingly routinized mid-market jobs (both blue-collar and white-collar)—plummeted by 12%.

Pre-recession wage growth, as measured between 1980 and 2005, showed a somewhat different patter. The average, inflation-adjusted hourly wages for high-skill/education/pay workers surged by almost one-third, compared with only 16% for low-skill service workers. Mid-skill categories, however, again pulled up the rear, with machine operators and assemblers earning only 6% more and the wages for production and craft workers actually declining by 4%. The recession, meanwhile, hit the latter three categories particularly hard as consumers cut back on discretionary personal service purchases (haircuts, restaurant meals, etc.) and as many laid-off mid-skill workers went into competition with lesser-skilled workers for personal service jobs.

The result: A dramatic bifurcation of the U.S. labor market and, according to some, of our entire society.

The Grim Reality

After more than four years of decline and slow growth, unemployment among recent college grads is still almost 15 percent. Another 40%, according to Northeastern University’s Center for Labor Market Studies, are underemployed or are unable to find full-time jobs or those that make use of their skills. These patterns are echoed in a 2011 study by Rutgers University’s John J. Heldrich Center for Workforce Development. It found that 44% of 2010 college graduates had not held a single job over the 12 months since graduation (compared with 10% from the classes of 2006 and 2007). Among those 2010 grads lucky enough to find jobs, only half landed jobs that required four-year degrees, 30% claimed that their jobs were below their skill levels and only 22% saw their positions as steps along a long-term career path.

Worse still, a study of previous recessions by Yale School of Management economist Lisa Kahn, found that those graduates unlucky enough to enter the job market during a recession not only begin at lower wages, they also find it difficult to compete with younger, more recent graduates when normal hiring patterns resume and are likely to continue to earn lower wages though much of their careers.

All this bad news is taking a terrible toll on morale. According to the previously mentioned Center for Workforce Development survey, 56% of recent college graduates now believe they will to do less well than their parents—only 17% think they will do better!

A Brighter Future?

Although it may be comforting to think that this situation will return to normal once we pull out of the slump and the recovery begins generating jobs at a more traditional pace, this is worse than wishful thinking—it is self-delusion.

The recession, as severe as it has been, has merely unmasked a number of fundamental job market-altering trends that have been in place for more than a last decade, but were disguised by the financial and homebuilding bubbles. These trends fall into four primary categories:

1. Automation, in which not only factory and administrative workers, but also knowledge workers (as in routine accounting, programming, legal and even some medical jobs) are being automated;
2. Globalization, where increasingly educated engineers, financial analysts and lawyers and other professionals, from a growing number of developing countries, perform jobs for as little as one-tenth the cost of a comparably educated domestic white-collar worker;
3. Flexible hiring, with companies looking to reduce fixed costs by increasingly looking to part-time or contract workers as alternatives to full-time employees; and
4. Unpredictable volatility, where political, economic, social, technology and market forces change so suddenly and profoundly as to make it all but impossible to anticipate, much less prepare for major dislocations or their often unanticipated consequences.

The bad news is that those who are not prepared for these trends face a lifetime of uncertainly, disrupted career plans and low earnings. Their careers, their financial security and, to an extent, their lifestyles, will be subject to the whims of the market place and the good graces of others.

The good news is that those who understand and are prepared for the job market of the future—and who plan and manage their careers effectively—have the opportunity to not only minimize these risks, but to turn them into opportunities. They will increasingly be able to define their jobs around their own interests and passions and build careers that enable, rather than limit their lifestyles.

Although most college graduates have the potential of taking charge of their own careers, those who are still in high school or those who are about to enter or are still in college, have, by far, the greatest potential. It will, however, take planning, work and commitment.

The sooner you accept these responsibilities, the greater your chance of ensuring that you will be the master, rather than the victim of your own career.

Dr. Philip Gardner, Director of Michigan State University’s Collegiate Employment Research Center (CERI) addressed just such issues in a February 2010 report, Under the Economic Turmoil a Skills Gap Simmers. This blog takes a three-layer view of the skills employers look for in new graduates, the relative importance of these skills and the ways in which employer requirements have changed over the last five years.

Changing Skills Requirements

The CERI analysis began with a quantitative analysis of Iowa State University’s career management center’s archive of nearly 21,000 job postings filed by employers from 2003 through 2009. After discussions with employers, CERI identified eleven particularly important skill or competency clusters. It, as shown in Table 1, identified key words associated with each skill and competency and performed a search for usage of these words over the six year sample.

Table 1: Key Words Associated with Skill Categories between 2003 and 2009

Source: Collegiate Employment Research Center

The high-level conclusions: with one or two exceptions employers are looking for the same skills as before. They are, however, looking for higher levels of these skills. The results, divided broadly between employers looking for engineering graduates and those in all other fields, found “plan” and “team” to be the most frequently mentioned for all types of jobs and industries. Beyond that, those seeking engineers were also highly focused on “project” and “analysis” skills, while non-engineering postings also rated “communications” highly.

There were also wide disparities in the relative use of these words over the years. Overall, “team”, “plan” and “global” (although the latter is from a much smaller base) showed the greatest growth across categories. Employers seeking engineering graduates, in particular, focused particularly on “plan”, “project”, “analytical” and “teaming” skills, which showed up in between 45% and 56% of all position descriptions.

Different capabilities, however, have grown at vastly different rates over the six years covered by the study: The incidence of analytical and team skill mentions by engineering recruiters, for example, each increased by about 50%, while plan and project skills grew by 25-40%. The incidence of communication and customer mentions, meanwhile, remained generally unchanged while the use of “innovate” actually fell, from an already low 7% to miniscule 4%. Interestingly, those seeking non-engineers appeared to place a much greater emphasis on “innovate”, which was cited in 11% of position descriptions, up modestly from 9% in 2003.

The Relative Importance of Skills.

Although the incidence of word usage is certainly a valid metric in assessing the skills for which employers are looking, it does not, in itself, provide much of a clue as to which of these skills are most important and what type and level of skill in these areas are required. Everybody, for example, wants people with good planning and teamwork skills, but what do they mean by “good”?

CERI began to address these questions by convening a group of employers to identify which capabilities are actually represented by each of the key words used in position descriptions. This resulted in the identification of nine “central competencies and abilities.” It then launched a survey in which respondents were asked to, among other things, to rate the importance of each capability in the hiring of college graduates for entry-level positions.

The concept of “team” was divided into two sets of capabilities: “building working relationships”, which as shown in Table 2, was deemed to be the single most important requirement for an entry hire, and actually “building a successful team”, which ranked near the bottom. “Analyze” was expanded to “analyzing, evaluating and interpreting data”, which was ranked as the second most important requirement. Third place went to another capability that didn’t even show up in the key word list, but is, in the view of many academics, the primary role of a college education—the ability and the willingness to “engage in continual learning.”

Table 2: Importance of Selected Abilities in Starting Positions for New College Hires

Source: Collegiate Employment Research Center

Not surprising, and as suggested by the changes in the incidence of key words, building and maintaining professional relationships is considered to be much more important (by nearly 50% of respondents) in assessing a candidate in 2009 than it was five years ago. Other capabilities that have grown in relative importance include planning and managing a project, analyzing, evaluating and interpreting information, and engaging in continuous learning.

There were a number of expected, and a few unexpected differences in rankings by industry and by company size. Large companies, for example, generally considered the building of professional relationships, global understanding, oral communications, team building and creating new knowledge to be more important capabilities in entry-level candidates than do small and mid-size companies. Smaller and larger companies meanwhile placed a higher importance on mentoring capabilities than did mid-size companies. For the most part, however, such differences were relatively small. There were, meanwhile, no measurable differences among different size companies in the importance of a candidate’s ability to analyze, evaluate, and interpret information, engage in continuous learning, or plan and manage a project. All view these as critical skills.

Overall, there were also more similarities than differences in the change of importance of these capabilities among graduates in different majors. The greatest increase in importance, across all majors, was in managing and planning a project, building professional relationships, analyzing information, and engaging in continuous learning. Among the more notable differences: a big growth of importance in “creating new knowledge” for IT, Marketing/Advertising/PR, and Social Sciences/Humanities grads; and in the need for “global understanding” by Accounting and Agriculture/Natural Resources graduates.

The Quest for Stars

CERI’s overall conclusions are that while employers are generally looking for the same general capabilities as in the early 2000’s, the relative priority they place on these skills is changing. The three most important capabilities, across virtually all sample groups, were:

• Building professional relationships;
• Analyzing, evaluating and interpreting information; and
• Engaging in continuous learning.

The biggest changes from 2003 through 2009 were in the growing importance of managing and planning projects, building professional relationships, analyzing information, and engaging in continuous learning.

Just as importantly, these employers are now looking for entry employees in whom these skills are “elevated to a higher level of competency.” They want entry employees to come up to speed and contribute to the business much more quickly.

They are also looking for more “stars”—the relative handful of candidates who possess skills and abilities that will allow them to handle assignments located “several standard deviations from the mean;” rather than the type of repetitive and routine tasks that are now being outsourced and automated. This requires candidates who, in addition to possessing technical competence in their field, exercise higher-order thinking skills—those who go beyond disciplinary problem solving to analyze, synthesize, evaluate, and create information and knowledge across multiple domains.

The research suggests that success in these more demanding entry positions is predicated on a few key skills: quickly converting college learning to the workplace, writing effectively, working effectively in teams, acquiring new knowledge quickly to carry out job functions, being able to grasp the realities of the workplace and especially, demonstrating initiative.

This list is interestingly similar to the list of nine key capabilities that Robert Kelly compiled more than a decade ago in his 1998 book, How to be a Star at Work. In other words, the capabilities one needs to become a star performer have changed relatively little from the early 1990s, when Kelly conducted much of his underlying research. The big difference is that today’s employers now have little need for all of the non-star performers (those closer to the mean) that used to perform jobs that required lower-level cognitive capabilities, such as remembering and comprehending information and applying knowledge. And in the current labor market, the most desired employers won’t even look at these non-star candidates.

A Second Chance for Ex-Autoworkers

As I discussed in two 2011 blogs, Infosys, along with a number of other Indian and multinational IT service companies have developed world-class training programs to bring graduates from India’s uneven college system to a common base of competence. Every one of Infosys’ computer science recruits goes through a 23-week Boot Camp at its Mysore Development Center, now called the Narayana Murthy Centre of Excellence.

It is now bringing this time-tested program to the U.S. in an attempt to retrain unemployed workers for new, high-skill jobs while simultaneously helping to address a growing shortage of skilled computer scientists and programmers. In March 2012, it launched an 18-week “Software Boot Camp” to provide unemployed Detroit autoworkers with an education comparable to a BS in programming.

The idea to boost training and employment opportunities for Detroit-area workers was initially spawned in a discussion with the Office of the Science and Technology Policy in the Office of the President. Washington then put Infosys into contact with potential partners and generally stepped back to let these partners design and run the program. Among Infosys’s primary partners in this endeavor are:

• Wayne County Community College (WCCC) which will provide the facilities, manage the program and provide programming instructors who, after learning the Infosys program, will deliver it themselves and ultimately train others to deliver it;
• The Workforce Development Department, which identifies and selects candidates who have lost auto industry jobs; and
• The Detroit Economic Growth Corporation, which recruits and works with potential employers and will run a job fair to help the graduates find jobs.

Infosys is funding the entire program (which will be free to students) and is using the same curricula, courseware, exams and instructors as in Mysore. However, its Indian and U.S. programs have a few important differences. For example:

• The Mysore program is targeted at new college graduates that Infosys has already hired. The Detroit program is open to older, non-employees who, after graduation, will be able to take jobs with any employer (including Infosys, for any of its 13 U.S. development centers) from which they receive an offer.
• All Mysore students have a BS college degree in a computer science or engineering-related discipline. The Detroit program will accept graduates and non-graduates, with all types of backgrounds, who pass an entry test designed to assess analytical and quantitative capabilities.
• The Detroit program, which is targeted at older people who have work experience, has been reduced from Mysore’s 23 weeks to 18 by eliminating the “soft skills” component that help new recruits adapt to a work in a professional, corporate environment.
• While Infosys runs the Mysore program itself, the Detroit program was designed and is managed in conjunction with partners.
• Infosys instructors conduct the Mysore program. These instructors will come to the U.S. to teach the first 18-week program, while training WCCC Computer Science instructors (initially 3 instructors) to take over the teaching—initially with oversight of and guidance by Infosys instructors, and later on their own.

The Detroit program is an experiment that is intended to determine the applicability of the Infosys training program to older students (an average age of 41) with diverse backgrounds. Although Infosys declines to discuss the background of the current students until the course concludes, they are clearly not the relatively heterogeneous lot of new BS Engineering and Computer Science graduates that make up a traditional Mysore class.

The company acknowledges that these factors, combined with its goal of maximizing completion rates, may combine to limit some graduates’ employability as programmers. It does, however, expect that even those who may not get jobs as programmers will be qualified for IT administration and support roles.

Scaling the Initiative

Where will this program go in the future? This will depend largely on the success of the initial class plus the determinations of employers and as to whether changes are required. Some big questions include whether there should be minimum educational requirements (such as a two-year or a four-year degree), whether students should be required to have a STEM-related background and whether the program can be evolved into a scalable, self-sustaining program that can be delivered by a broad range of non-Infosys instructors across multiple locations.

There are, of course, also a number of more nuanced questions, such as the types of jobs for which graduates will be best suited and how to best tailor the curricula, courses and pedagogy to the needs of students and prospective employers. The answers to such questions must await completion and a formal evaluation of the first program, as well as the success of graduates in getting jobs, feedback from students, instructors and employers and, of course, of Infosys’s partners.

While these and many other decisions must await the completion of the first Detroit program, Infosys has already begun to plan to expand this program and to launch others. For example, it hopes that WCCC will be able to immediately scale to three—and longer term—four programs per year, each with about 100 students. It also hopes to apply this same model to other constituencies and other geographies. It is already outlining a program that will be tailored to the needs of returning veterans (probably in conjunction with the Veterans Administration) and has initiated conversations with colleges and universities in other areas, such as Boston and Northern Virginia.

Such programs have the potential of delivering huge value. They can, for example, help:

• Individuals acquire high-value, real-world job skills in areas for which there is strong and growing demand;
• Community colleges develop and deliver more business-aligned retaining programs;
• Cities and towns convert unemployed workers into participants in the knowledge economy; and
• Companies, across all industries, beef up their IT staffs with professionals with up-to-date, state-of-the-art skills that can deliver immediate business value.

The program can also help Infosys. Although the vast majority of the company’s previous U.S. hires have been experienced professionals, it is now beginning to hire fresh out-of-school (“freshers”) for its U.S. development centers. While Infosys will have to compete with other companies in hiring such people, the programs will provide an expanded recruiting pool of people trained in Infosys methodologies, some of whom may help fill the company’s 300 current U.S. openings.

The program will also provide a supply of talent to Infosys customers (albeit also to its competitors). Just as importantly, it has the potential of improving Infosys’s public image by demonstrating its commitment to training U.S. citizens to provide the type of services that have recently gone offshore.

Although it is too soon to know how the current or subsequent Infosys efforts will pan out, the concept shows great promise. While community colleges have long offered all types of career retaining program, many such programs have not been well suited to actual market needs, much less to the needs of specific employers. Many of those programs that have been targeted to demonstrable market needs have focused on highly company- or industry-specific skills.

The Infosys effort has the potential of combining the best of both worlds—the broad reach and multi-employer appeal of traditional community college programs, with the teaching of specific, real-world skills for which there is a proven business need. Just as importantly, Infosys is providing these colleges with valuable intellectual property in the form of curricula, training materials, exams and even instructors that have already been proven in the training of tens of thousands of people who have gone on to successful IT industry careers.

As I have written previously, this approach is exactly the type of bridge between community colleges and the private sector that is required to retrain America’s workers (and possibly, in the future, initially train some of America’s students) for the jobs of the future. (See, for example, my 2011 blog series on the Future of Community Colleges). One can only hope that the results show as much promise as the concept and that it sparks the creation of many similar programs—by Infosys and hundreds of other companies—in many different fields and in many different cities. It is, however, somewhat ironic that it has taken an Indian company to pioneer a program for which the U.S. has such a critical need.

• Technology, which is eliminating growing number of traditional jobs and fundamentally changing the tools that will be available to (and the skills that will be required of) knowledge workers;
• Globalization, where increasingly sophisticated knowledge-based jobs can be performed by increasingly highly-educated knowledge workers in lower-cost countries around the world;
• The “New Normal” employment environment in which companies are reducing hiring and reducing benefits and job security by using contingent workforces—freelancers, contract workers and part-timers—to perform many functions that formerly were done in-house; and
• Extreme volatility, where sudden, often unanticipated socio-political and economic events prompt rapid changes in our lives and work environments.

Knowledge workers who hope to thrive in this environment will require very different skills and a very different approach to and philosophy of work than their parents. They will, of course, continue to need deep functional skills in their chosen discipline, whether that be business, engineering, law or sociology. However, they’ll also require a broad range of complementary skills—what I call foundational skills—that will be required of people in all occupations. These skills which, as described in my October 30 article on Core Skills, include what I generally describe as high-level thinking, “Integrative imagination,” quantitative analytics, IT fluency and a range of soft skills, particularly around communications, teamwork and inter-personal sensitivity.

This month’s article draws on the work of three economists, MIT’s David Autor and Frank Levy, and Harvard’s Richard Murnane, who look at the role of two types of skills that will be particularly critical in helping knowledge workers protect themselves from, and capitalize on the effects of two of the most profound of the forces transforming the 21^st century work environment—technology and globalization. These skills are:

• Complex communication skills; and
• High-level cognitive skills.

The Skills Matrix

Three primary articles by this trio of economists provide a framework for interpreting the very different ways in which the forces of technology and globalization will transform the U.S. Workforce. These articles are: Autor and Levy’s 2003 The Skill Content of Recent Technological Change; Levy and Murnane’s 2005/2006 How Computerized Work and Globalization Shape Human Skill Demands; and Autor’s 2010 The Polarization of Job Opportunities in the U.S. Labor Market.

The authors divide work tasks into five categories:

• Routine Cognitive Tasks: Mental tasks that are well-defined by deductive or inductive rules. Examples include dealing with simple customer service questions, many kinds of administrative tasks and formulaic tasks such as evaluating applications for mortgages.
• Non-Routine Cognitive Tasks (Expert Thinking): Solving problems for which there are no rule-based solutions. Examples include the practice of law and medicine, scientific research, architecting software, managing complex organizations, as well as some non-professional careers such as diagnosing tough auto repair problems.
• Routine Manual Tasks: Physical tasks that can be described though the use of deductive or inductive rules. Examples include all types of assembly line jobs and the counting and packaging pills into containers.
• Non-Routine Manual Tasks: Physical tasks that cannot be well described by a pre-defined set of If-Then-Do rules, or that require optical recognition and fine muscle control. Examples include driving a truck or taxi, cleaning a building, gardening and serving as a health care aide.
• Complex Communication: Interacting with humans to acquire information, to explain it, or to persuade others of its implications for action. Examples include a manager motivating the people whose work she supervises, a salesperson gauging a customer’s reaction to a piece of clothing, a biology teacher explaining how cells divide and an engineer describing why a new design for a microprocessor is an advance over previous designs.

Routine cognitive tasks (which can be accomplished by applying defined rules) and routine manual tasks (that can be defined in terms of a specific set of movements) are most subject to computerization and, in many cases, outsourcing. Jobs based on these tasks, therefore, will increasingly disappear, at least in the U.S. and other high-wage countries. The vast majority of those that remain will provide little job security and will be subject to intense price pressures.

Non-routine manual tasks, meanwhile, are not generally subject to computerization. And since most of these services are site-specific, they cannot be readily outsourced. Most of these jobs, however, can be performed by people with relatively modest degrees of education and training and do not require particularly high levels of strength, stamina or hand-eye coordination. They, like those for routine tasks, will be subject to much competition and will provide low salaries and often, little job security.

Some of these jobs face an even greater threat in the future—information technology. Robots, for example, can already accomplish some basic non-routine tasks (such as vacuuming rooms while avoiding walls, furniture and pets). Google’s prototype self-driving car, meanwhile, has already driven several hundreds of thousands of miles with a driving record blemished only by a single minor accident (which was, reportedly, caused by human error). Although it will likely take years for future intelligent devices to achieve significant market presence, the future is already in the process of being outlined, if not actually written.

This being said, a few non-routine tasks do require special training and skills and produce particularly high-value results—think for example, of gem cutters and professional performers and athletes. The relative handful of people who qualify for such jobs will continue to enjoy high levels of differentiation and will often be able to command high salaries. Indeed, globalization and the rapid growth of middle classes in developing countries, has the potential of increasing the demand and compensation for such services and, in some cases, of creating globally-branded superstars.

The Job Opportunities of the Future

Although a tiny handful of non-routine physical workers have the potential of earning high incomes and gaining good job security, they will be the exception. For the vast majority of people, the higher-probability route to a rewarding career will come from the other two job categories:

• Non-routine cognitive tasks; and
• Complex communications.

Non-routine cognitive tasks go far beyond the type of problem-solving skills that are typically taught in middle- and high-school classes. Most such teaching involves problems with rules-based solutions, which, as the authors explain, are relatively easy to teach and to test. These are the types of cognitive skills that IT-based tools are most capable of addressing. The challenge is to teach the types of higher-order cognitive skills for which computers are less well-suited—those for addressing problems for which “the rules are not yet known”

These, as explained by Irving Wladawsky-Berger, include two types of problem. Those for which:

• The information is hard to represent in a form that computers can use, such as feelings or impressions derived from viewing body language; and
• Rules are difficult to articulate. This can include “complex processes” (such as those required to learn to ride a two-wheel bicycle), “pattern recognition” (the solving of problems that cannot be expressed in deductive or inductive rules), “divergent thinking” (as in starting from existing knowledge to develop new concepts and to ask new questions); and the ability to exercise “good judgment” in the face of uncertainty.

Complex communications also includes a broad range of capabilities. At the most basic, it entails the ability to describe (in speaking and/or writing) complex phenomena and patterns in ways in which people can understand, the ability to ask questions in ways that prompt people to think of issues in new ways, and the ability to listen to and/or read and comprehend concepts. At a higher level, it involves interaction (simultaneously communicating, receiving and processing), empathy (as in understanding and addressing the feelings and motivations of others) and persuasion (especially in selling your ideas and motivating others to action).

How will these skills be incorporated into, and in some cases, redefine tomorrow’s jobs? How do employers communicate the need for such skills? Most importantly, how will these high-level skills be taught (not to speak of measured) in a society that is finding it so hard to teach even basic skills?

Then there is the longer-term question. Will/when/how information technology is likely to impact, complement or transform these high-level conceptual and communications functions—and what will this mean for individuals’ ability to use these tools to differentiate themselves and deliver high-value services?

Up to a few years ago, such questions would appear to be little more than remote speculation. Then came IBM’s Watson—the computer system that handily beat the reigning Jeopardy champions.

Although it will take years for “intelligent” machines to effectively displace humans in non-routine cognitive tasks, Watson has already demonstrated its ability to work across both domains—complex communications and high-level conceptual analysis. It, for example, not only showed that it could recognize natural language, but also interpret idioms, parse puns and to do it all in fractions of a second.

As for its role in conceptual tasks, one of the first commercial implementations of the new system is likely to be as a diagnostic tool to help (although certainly not replace) doctors in the diagnoses of illnesses. Rather than displace doctors, however, the diagnostic system will initially be used to complement them—reducing their need to research obscure combinations of symptoms, prioritizing diagnostic options and presenting doctors with better information from which they can make their final decisions. The same is true in the second major commercialization initiative, in customer service for financial services companies where it will initially support human agents, helping them anticipate customer needs and ask more probing questions.

But, as explained in my February 20 article on Watson, the role of Watson and its successors will only grow, as they prove their capabilities, as software is tuned and as adoption spreads into additional fields, such as financial analysis, supply-chain management and technical support. Consider, for example, the number of customer support functions that are already handled without human intervention, even without the help of Watson.

I will examine these and many other questions surrounding the skills required for the high-value jobs of the future in subsequent articles.

In a nutshell, the disagreement, as I explained in last month’s article, boils down to three interpretations of the shortage problem:

1. We are not educating or training enough STEM professionals;
2. We are educating/training enough people, but employers are not paying them enough to attract them from jobs in fields such as management consulting or investment banking. This problem is exacerbated by U.S. government policies that make it difficult or unattractive for U.S.-educated, foreign-born citizens to stay in the U.S. and by increased aggressiveness of emerging country companies (especially Chinese and Indian) to recruit and attract top university graduates with offers of permanent visas, comparable salaries, attractive benefit packages, and the promise of interesting, resume-burnishing overseas work; and
3. We are educating/training enough people, but many have insufficient functional skills (in their specific discipline) or broad foundational skills (communications, cognitive, etc.) to be hired in STEM jobs.

Although proponents of each of these interpretations disagree on many things, they generally do agree on two issues:

1. Our K-12 educational system is not doing a good job at teaching STEM fundamentals (and thereby not preparing students for college-level work in these fields) or in creating the type of curiosity and excitement required to motivate our best and brightest to become engineers and scientists;
2. Employers, who are cutting back on their own training programs, will accept only graduates who can fill a current need or otherwise deliver immediate value.

In Search of “THE STEM Solution”

We certainly don’t and possibly never will, fully agree on all of the specific “cause/s” of the STEM skills mismatch problem. However, most agree that the tech industry is having trouble getting the number and quality of people that it needs. Many agree that the reasons for this are two-fold:

• The imitations of our K-12 education system; and
• A dearth of corporate training programs;

I, along with virtually everybody else who examines the education-to-career pipeline, fully acknowledge that K-12 education is at the root of many of our problems. Unfortunately, none of the experts seem to be able to agree on the cause of this problem, much less on its solutions. Even if they could agree, the educational system is highly unlikely to get additional money (or probably, even avoid additional cuts) from state and local governments. Moreover, even if we were to identify the magic bullet, and could afford to develop and shoot it, it would probably take at least half of a generation to begin seeing meaningful results.

Compared with fixing the K-12 educational system, improving corporate training programs should be a piece of cake. After all, big companies already know how to provide training. Some, particularly those with large operations in India and China, already provide extensive education and training programs to compensate for the big gaps in these countries’ educational systems. Although smaller companies may not have such capabilities, even they can retain specialists to develop and administer programs that are tailored to their needs. The “only thing” that it will really take to address these needs is money. This too, however, will be a very tall order in the current era of economic uncertainty and unrelenting belt-tightening.

Moreover, even if we identify solutions to, invest in and address both of these potential issues, what if the underlying problem—companies’ inability to find people suited to fill specific STEM job openings—is not resolved?

Plugging the Leaks in the STEM Pipeline

There is no question. We absolutely must work to fix the K-12 educational system—for the good of our society, as well as for our companies. I would also love to see a recreation of many of the traditional corporate training programs. Ideally, I would particularly like to see U.S. companies go further, as by creating programs of the type that are widely used in India—whereby companies establish their own schools in which all new recruits are brought up to a common, base level of capabilities and then provided basic training in the specific disciplines to which they will be initially assigned. Such programs, could be used both, for new graduates (whichever level of school is appropriate for the anticipated positions) or for current or displaced employees who need to be retrained for new jobs.

In reality, however, such hopes are little more than pipedreams, at least in today’s economic and fiscal environment. Although we can certainly hope for progress in each of these areas, there are a number of generally smaller, more incremental steps that have the potential of at least alleviating part of the core STEM skills mismatch problem. For example:

• Employers can work with state and local governments to develop and continually update an online jobs guide, using a companies’ best estimates on which and how many positions are likely to be available over the next year, the next three years and the next five years, as well as the types of skills, qualifications and/or certifications individuals will need to prepare for these jobs. The postings should also provide anticipated compensation ranges, the schools and programs that train people for these jobs, and examples of potential career paths.
• Employers can partner with schools—particularly two-year colleges and universities—to jointly develop curricula, courses and materials for teaching the skills that will be needed for these jobs. Employers should also provide volunteer instructors, tools (computers, software, machines, support, etc. on which students can get hands-on training and practice), and, where appropriate, create meaningful internships, apprenticeship or sandwich year programs.
• Schools, local government organizations, companies and labor unions can invest in training and building networks of “career navigators” who can help students or transitioning workers assess their interests and skills; match these to colleges, curricula and career pathways; and guide clients through college planning and the college-to-career transition. Some non-profits, such as CAEL, already help companies, local governments and labor unions create such programs. It is also working with other organizations to develop an online training and certification process for these navigators.
• Governments and unions could make it easier for companies to put people though through company-run or company-sponsored training programs, test-hire them at low or subsidized rates for defined periods and easily dismiss those who do not meet expectations.

Most importantly, all students and employees must take much greater responsibility for planning, preparing for and managing their careers and for continually upgrading their skills. They must seek out and proactively work with career navigators to identify and prepare for careers that match their interests and skills, and that are likely to offer strong long-term employment opportunities. They must select schools and employers that offer the educational and training opportunities that will prepare them for these careers. They must, though coursework, reading and extra-curricular activities, develop the foundational skills, as well as the functional skills they will require. And, in the current era of perpetual uncertainty, they must continually assess the long-term trends in their own and other potential career paths and industries, identify needs and opportunities for changes, and continually update and supplement their skills to ensure they will can provide higher and higher levels of value to current and future employers.

The trip began with an overview of Cuba’s history, its political and economic systems and a broad overview of Havana and many of its cultural attractions. (For more details on the trip in general, see my travel blog www.ActiveBoomerTravel.com.)

Our primary mission, however, was to learn about the country’s educational system. We visited primary and secondary schools and some of the workshops and vocational programs that complement them, as well as one of the country’s most prestigious universities. We had lectures by and extensive chance for open discussions and questions with teachers, principals and students.

Cuba’s Commitment to Education

Cuba places an incredibly high value on education. The country dedicates about 10% of its budget to education (compared with 2% in the U.S.) and literacy rates are 98%. Classes are relatively small, with classes averaging 12 students per teacher, with a maximum of 25. (These ratios average 1:1 for severely mentally and physically-challenged students.) Education is compulsory through the ninth grade (secondary school) and high school graduation rates, although hard to measure in Cuba, are relatively high, especially in Havana and other large cities.

All education, including university and graduate school (assuming the student passes admission exams) is free and the quality is high, with elementary and secondary students consistently testing at the top of OECD’s ratings for Caribbean and Latin American countries.

The higher education system is also relatively strong. The country has almost fifty universities, plus pedagogical and polytechnic institutes that graduate an average of about 40,000 students per year. Its education and medical schools, in particular, are renowned throughout Latin America and Africa—regions which send students to study in Cuban universities and to which Cuba sends large numbers of teachers and doctors as part of the country’s large “soft diplomacy” programs.

Those who do not live close to these higher education institutions can take courses through a distance learning program which offers afternoon and evening courses through 15 different centers.

This being said, the Cuban educational system, for all its strengths, certainly has faults. As summarized by Catholic University professor Enrique Pumar, educational resources are highly vulnerable to economic cycles and graduation rates vary greatly between urban and rural schools. Moreover, Cuban educational institutions are not exactly bastions of free thought. All education is managed by, and all schools are operated by the state. All programs are, as per the country’s constitution, based on Marxist ideology.

This being said, we were generally impressed by what we saw in Cuban classrooms and what we learned speaking with administrators and teachers.

Cuba’s Primary and Secondary School System

Students attend schools for nine months a year. The school day begins at 7:50 AM and lets out at 4:50 PM, with a two hour mid-day break. This, however, is only part of the educational experience. After school, students go directly to “workshops,” for about two hours per day and another three hours on the weekend.

These workshops, whose programs are coordinated with teachers to build upon what the students are learning in school, provide opportunities to apply their school lessons to real-world tasks. Writing classes, for example, are complemented by exercises in conceiving and writing stories for, and publishing (via desktop publishing) newsletters; literature courses by writing and producing short plays, art classes by performing and even writing music, and so forth.

In addition to such “applied” programs, these workshops also provide a number of more generalized programs, such as those that teach and help demonstrate the rights and responsibilities of citizens, the history and how to address some of the needs of their communities, ecology and, for older students, sex education. High school-level workshops, are tied more closely to trades, academic specialties or even professions for which students demonstrate particular interest and aptitude.

College and trade schools

Admission into trade schools and universities are open to all who demonstrate aptitude, pass required entrance exams and possess appropriate skills (such as dexterity for skilled trades like carpentry, plumbing and metal work).

Some students go directly from secondary school to university, and those with the highest grades, admission test scores and aptitude in particular disciplines, to graduate or professional school.

Others take a less direct route that blends vocational and academic tracks. I found one program to be particularly interesting. The Havana-based Escuela Taller, is a trade school dedicated to restoring buildings in the city’s World Heritage Site historical district. Its staff consists of highly experienced trades people (masonry, carpentry, plumbing, electricity, etc.) and professionals and instructors in associated disciplines (urban planning, Spanish architecture, structural engineering and so forth).

While the program is nominally open to any 15-23-year-old boy or girl with a ninth-to-twelfth-grade education, admission is extremely competitive, with only about five percent of applicants accepted. Those who are accepted are assigned to a specific discipline, where they work with experienced trades people to learn their trades, while simultaneously taking academic courses in related disciplines.

Those who graduate from the rigorous two-year program can take one of two routes. Some go directly into the trade they have studied. Others, assuming they have completed their secondary educations (either before or part-time in the evenings during their time at Escuela Taller), may qualify for admission into university. (Although the Escuela Taller program is tailored to the needs of Havana, and are open only to city residents, other cities and provinces have similar programs.)

The Cuban education system, as evidenced by workshops and programs such as Escula Taller, focuses on integrating academic learning and the development of practical skills.

While the vast majority of this combination begins with generalized skills in primary schools, they become increasingly focused on career skills later in the education process. There are, however, a few exceptions to this broad approach of beginning with general education and skills, and gradually migrating to specialized disciplines and trades. The government considers a few areas to be sufficiently important and early focus and practice to be so critical, as to provide integrated career training from very early in the education process. These are primarily in:

• Arts, including music, dance, theater, visual and media arts; and
• Sports.

In both these areas, the system attempts to identify those with particular talent at very early ages and provides highly specialized integrated training programs to nurture these skills. Students are admitted at an early age, and take intensive coursework and workshops that are aligned to their specialties. They undergo regular, increasingly rigorous tests, with only the best admitted to the next level. Education in the arts culminates at Havana’s Instituto Superior de Arte (ISA). This highly selective conservatory, championed by and built on grounds that were selected by Fidel Castro, is located on the old golf course of an exclusive country club and is graced by lovely (albeit also quite run-down) contemporary buildings designed by famous architects. The conservatory, which selects the best of the graduates of specialized high schools, provides a rigorous and comprehensive education, with tracks aligned to each of its four artistic disciplines. Many of those who graduate are destined for lucrative careers in Cuba’s leading theaters, orchestras and dance companies and for independent careers in art, jazz and other related fields.

Implications for the U.S. and Cuba

Although the U.S. has long since migrated away from the type of educational tracking Cuba applies to arts and sports, there may well be opportunities for us to learn from Cuba’s general practice of integrating academic education and vocational training to help students better grasp the real-world application of their coursework, deepen their interests, and identify and prepare for careers in which they have interests and skills.

Such, formal, integrated programs could produce particular advantages in STEM (Science, Technology, Engineering and Mathematics), areas in which the U.S. is facing an increasingly serious skills shortage (or at least severe skills mismatch). Such a system could help address the huge leakage we are currently experiencing in our STEM pipeline (see my recent blog, The United States’ Clogged Technology Education-to-Employment Pipeline). The advantages could be especially great if the private sector becomes more actively engaged in the education process, helping schools not only identify the types of skills they will need in graduates, but also designing the academic curricula, designing and sponsoring the practical exercises and providing volunteers to show how these skills are used in actual jobs.

Speaking of STEM, we have to wonder why Cuba does not appear to focus anywhere near the level of effort on developing its STEM talent as it does on developing its artistic and sports talent—and especially its medical and pedagogical talent. As shown in a 2009 report by the Cuban National Statistical Office, see Figure Pumar’s article), 34% of the prior year’s college graduates were in medical sciences, 33% in education and 12% in sports (although art represented only 0.28% of graduates, this is probably due largely to the national dominance and selectivity of ISA).

What about math and science (other than medical disciplines)? These are among the least popular of majors, with agricultural science accounting for only 1.0 and the broader categories of sciences/math a measly 0.8. This is despite the fact that agricultural goods (especially sugar), minerals and biochemicals and pharmaceuticals (along with tourism) are already among Cuba’s largest sources of foreign exchange. Why does the country not place the level of emphasis on disciplines such as metallurgy, biology and chemistry, as it does on medicine, education and sports?

Why does Cuba not provide the same type of systematic programs for identifying particularly promising students at an early age in these areas? Or in providing the type of integrated academic/practical approaches to developing such skills as it does in sports and art?

Perhaps one day—at least once Cuba finally gets and provides ubiquitous broadband Internet access to its citizens—it could also use its educational system to create another economic opportunity. That of using its highly educated, low-cost labor force to provide information technology services to other countries.

This leads to another question—just what is the state of computer and Internet usage in Cuba in general, and in education in particular?

Computers and Internet in Education

Although information is limited, from what we have been told and have seen, schools often have up to ten computers in central computer labs. After-school workshops often have one, or more depending on level and specialty. While modest numbers of elementary and high-school students have access to home computers, many university students apparently do have their own laptops. This having been said, the value they derive from such machines is limited. The primary reason—Internet access is severely limited by a combination of factors including the country’s lack of a reliable broadband communications infrastructure, the U.S.’s embargo, the high-cost of access and the government’s own restrictions on use by its citizens.

Caveats

Although most of our group was relatively impressed by the facilities we saw, the people we met and our guide’s answers to our questions, we were under few allusions. We absolutely understand that what we saw, who we spoke with, and probably, most of what we were told, was carefully selected and approved by the government. Since none of us have specific knowledge of the Cuban educational system, we have no way of determining exactly what is true, how true it is, or how representative what we saw is reflective of the broader educational system.

This being said, the country certainly seems to be saying and—from what we saw—doing a number of the right things.

A forthcoming blog will provide my thoughts on the Cuban educational system in the context of the broader perceptions of Cuba gained from our January trip.

Although such efforts are helpful, we need more—much more—if we are to provide an adequate pipeline of qualified STEM graduates, through all steps of the educational system, into STEM jobs. The first steps are to understand:

• Why declining percentages of American students graduate with STEM degrees; and
• Why so many of those that do graduate do not end up in STEM professions.

Leakage in the STEM Education Pipeline

As discussed in my July 31 blog, The United States’ Clogged Technology Education-to-Employment Pipeline, our shortage of STEM professionals begins in primary and secondary school and gets worse in every stage of the education pipeline.

According to the 2009 National Assessment of Educational Progress exam, less than one-third of elementary school students are considered to be either proficient or advanced in science. This percentage declines steadily, to 21%, by the time they reach 12^th grade. These declines are highlighted in international comparisons, with the OECD’s 2009 Program for International Student Assessment (PISA) rankings placing U.S. 15-year-olds below the median ranking among 30 OECD countries in each of the three tested areas. They rank 16^th in reading, 21^st in science and 29^th in math.

These deficiencies, however, have not discouraged college-bound students from pursuing STEM majors. Despite the fact that the 2011 ACT test found only 45% of graduates prepared for college-level math courses, and only 30% prepared for science courses, the percentage of incoming freshman who initially plan to major in STEM fields has increased dramatically (to 34% in 2009) from their lows in the 1980s and 1990s.

These plans, however, don’t last long. After getting a sampling of the rigors of college-level STEM classes, many switch majors to less demanding disciplines. In fact, while the number of college graduates has increased by 29% from 2001 through 2009, the number of engineering graduates grew by only 19% and the number of computer and information science grads actually fell (by 14%). A 2011 study by McKinsey Global Institute, “An economy that works: Job creation and America’s future,” generally confirms these trends, citing a meager 0.8% per year growth in the number of STEM graduates—significantly less than fields such as business, social science, humanities and arts.

Worse still, many of those that do graduate do not end up in STEM careers. According to one of the most comprehensive U.S. studies to date, only one-third of STEM graduates actually end up with jobs in these fields (see the below cited Lowell and Salzman study).

Causes of STEM Pipeline Leakage—Follow the Money

A preponderance of industry experts, analysts and educators, as discussed in the above-referenced “Pipeline” report, place the primary blame on a range of factors. These include:

• A culture that does not sufficiently value technical skills;
• A student body that shuns hard work and study required of STEM disciplines; and
• Big gaps in all levels of the educational system—from a lack of qualified teachers and mentors in primary and secondary schools, a disconnect between colleges that educate future professionals and the companies that hope to employ them and a large pool of STEM graduates that lack the skills required for the jobs companies are looking to fill; and
• Corporate training and educational systems that are ill-suited to the continual education, skills refresh and new skills training requirements of a dynamic jobs market.

This skills mismatch, or skills gap, is becoming severe. According to McKinsey’s “An economy that works” study, 40% of companies with plans to hire in the next 12 months have had positions open for six months or longer, because they couldn’t find the right candidate—candidates with degrees in the appropriate field and/or relevant work experience. Although these needs span all types of jobs, the most difficult occupations to fill are in management, science and engineering, followed by computer programming and IT. The study also highlights a big emerging gap in statisticians and mathematicians who can handle “big data” and, in the future, fill the rapidly growing need for health care professionals.

There is, however, an alternate school of thought, not only as to the causes and remedies of a STEM skills gap, but also as to whether such a gap even exists. For example, a 2007 and a 2009 follow-up study by B. Lindsay Lowell and Hal Salzman, Steady as She Goes? Three Generations of Students through the Science and Engineering Pipeline, claim:

• There has been no decline in the total number of STEM graduates;
• The number of graduates is sufficient to meet demand; and that
• Many of these graduates are adequately qualified and prepared for available jobs.

According to their research, the primary problem is that only one-third of these graduates end up taking jobs in the fields in which they graduate. This drop-off, which began in the 1990s, spans all levels of students, from lower through upper quintiles. The drop, however, is particularly steep among those with the highest SAT/ACT scores and GPA averages—i.e., the best and the brightest of STEM graduates. Although their research does not show the reasons for this leakage from STEM careers, the authors see two possible reasons:

1. Growing numbers of graduates are going into jobs that, while not specifically categorized as STEM, entail STEM skills—jobs such as patent law, medical sales and management in technology firms; and
2. Growing numbers of the most qualified graduates end up taking jobs in fields that offer higher salaries (such as finance), more prestige and more varied experiences (such as consulting) or more flexible career paths (such as management).

In their view, the conclusion that today’s graduates are not qualified for STEM careers is “not supported by this data.” They believe that the primary problem is that the rewards of STEM careers are not sufficiently attractive to retain the best and the brightest graduates. Their primary recipe for attracting these graduates to STEM careers: increase pay.

Lowell and Salzman’s diagnosis of the problem and prescription for the solution are shared by others. Vivek Wadhwa of Duke and Berkeley Universities, in particular, has long argued that there is no shortage in STEM talent. The problems, as he lays them out in a TechCrunch face-off with ex-Intel chief Craig Barrett, are three-fold:

1. Much of the nation’s talent is “bottled-up” in the form of postdocs (post-doctoral fellows hoping to get a faculty appointments) who are locked into a broken university technology education system;
2. U.S. government policy makes it increasingly difficult and unattractive for foreign-born graduates of U.S. universities—who account for half of all U.S. STEM Masters and PhD graduates—to remain in the U.S.; and
3. Technology firms do not pay top graduates what they are worth, particularly relative to finance and consulting companies.

Causes of the STEM Pipeline Leakage—A Skills Gap

Not all studies come to the same conclusions. The U.K., which faces a similar issue in which half of its STEM graduates take jobs in other fields, launched a series of studies into the reasons. Although these studies certainly admit a loss to higher-paying career paths, they, as concluded in a 2010 study, Shaping Up for Innovation: Are we delivering the right skills for the 2020 knowledge economy, also find some evidence for the possibility that some STEM graduates do not have the skills required to meet employer needs.

The authors cite a 2008 CBI (Confederation of British Industry) study finding that 42% of employers see the quality of graduates as a major barrier to STEM recruitment. A 2009 study that examined The Demand for Science, Technology, Engineering and Math Skills, meanwhile, found that the occupations in which many of these STEM graduates actually end up, pay significantly less than jobs in STEM and finance. (A Georgetown University Center on Education and the Workforce compilation of U.S. salaries and unemployment rates by college major shows that STEM and finance jobs also tend to pay significantly better than, and have lower unemployment rates than, do jobs in most other fields.)

So, if STEM and finance pay better, and offer better employment prospects than do other fields, why would so many STEM grads shun these higher-paying fields to take jobs outside of the areas they had studied? According to the Demand for STEM Skills and the Shaping up for Innovation studies’ authors, there must be “some kind of mismatch between the type of skills STEM graduates have, and the type of skills sought in science occupations.” They do, however, plan to commission additional research to determine the extent to which these patterns are attributable to a skills mismatch, rather than individual choice.

What are these mismatches? Although they vary by sector, the CBI survey shows that employers’ primary concerns relate to candidates’ technical and practical skills. There is, however, a broad overarching concern that STEM candidates lack a number of softer skills in areas including problem solving, commercial awareness, team working, communication, interdisciplinary perspective and empathy for different points of view. (Note that this list is quite similar to that posed in my October 30^th blog, Core skills Required in a Knowledge Economy.)

This all leads to a number of questions that I will address in subsequent blogs and in my planned book—what can be done do address these skills gaps and mismatches? What should students do today to ensure that they are best equipped to capture the jobs and build the careers of the future?