Human Capital and Economic Development

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... Applied Systems Analy- sis. Dr. Perelman Is the author of The Global Mind: Be- yond the Limits ...... rOnT !.!rt'\\' h~' 12(j PtT('t'lIt sill('e ID70: • over Ihr pasl
THE LEARNING ENTEUPUISE Adult Learning Human Capital and Economic Development Lewis 1. Perelman

GLORIA L. WHITMAN. PRC. ~T MANAGER NORMA deFREI1J\S, PRODUCTION MANAGER

THE COUNCil. Of SlATE PLANNING AGENCIES

HALL Of THE SlATES 400 NOllfH CAPllOL STREET WASHINGlON DC 20001

.c 19H4 by the Council 01 State Plauuuu;

Agl'IIl'ie's

Library of Congress Cataloging in Publication Data Perelman. Lewts .J, 'l'he learuuu; entcrprtse. Bibllo~rClphy: p, I, Adult cducattou=-Untted Statcs=-Plunnlnu, 2, Couunutnu Educauon-c-Economuaspt'('ts--Ullltl'd a, Human Capital-United Stau-s, I. Title, I.C525I.P:IH H-lH4 :r14',97:i tH--213.tH IS13l" O·8J4H42·44·2

Stutes.

'1~'P()graph~' by The' l~'Pl'W()rl\s Manufactun-d

In the United States

Tilt' Counctl of Statl' Plalllling Agl'tlt'les Is a nu-mbershtp organtzatton comprtscd or tilt' plunnuu; ami policy stuff or tilt' nut ton S govt'rllOl's. Throuuh ill'i Waslllllgtoll olt'll't', tht' COllJlt'1I provides usslstuucc W iudtvtdual statl':-; 011" wtd« spoctrum of pollr'y matters. The Counctl also I)(,r forms policy and ll'l'hlli('al n-searcl 1011 hoth state' and nuuonul iSSUl'S, Till' COUll' ell has IJl'(~1I alflliatt'd with till' Nat tunal GOVl't'IIOl"s' Assortat ion stnve 1975, TIll' statt'l1It'lIts, findings, conclustons. nx-omnu-nduttons. and other data runtatncd 111 this report do not nvressartly represent the vtews of the ('mllleil 01 Statl' Phlllllilll.! Agl'IH'it's_ 1'\0 part ot this honk lIIay ln- used or n-produ-: 's in 1~)(;{), ,\('('CllIIII('d for oulv om- of (''.'('1\' fin' jobs ill 1~IH().urcl will .utouru lor ft'\\'(T i h.ui 011(' [oh ill -tx IJ,\' lilt, 1~1~IOs,h 'I()da~', 0111\'10 P('IT('111 01 Ih~'U,S, Iahnr IlInT '}('lllall,\' Illakl's ;1 prudurt . and Ilu: 1I111l1ill'r \\,111 (It-dill!' nvr-r III(' IIt'XI dl'l'd
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even ill ot her sectors. raising the questions: Where are the dlspluced workers gOillg to go'? Where are the IWWjob opportumttes going to be found? The most hopeful answer lit's ill the growth of the knowledge sector as a u 11Iquc. Iou rth sectur 0:' the CCOIlomy (after agriculture, mintuu/construcuon/man ulacturing, and services). Knowledue-work is rapidly hcrom iIlg t he major 1()I'1ll of em ployrnen t . Over the past 40 years, every 100 manutart u ring jobs lost were replaced wit h 250 of what Davld Birch of the Massachusetts Institute of 'lcchnology (MIT) calls "thouuhtwarc" jobs.:lH Lv the Iwgilllling of the next century, nearly thrce-quurters of Amcrtcan workers could be employed in knowledue related jobs-e-prrformtna Iunctlons that requtrr uniquely human illtl'lligellcl', imagination, and creat ivily,

The Learning Enterprise: A Key Industry If tltt' bright opportunity offered by the knowledge l'('0I1omy is to be reulizert. eonunuul learning by the rnatnstream of work-font' adults must become a centra! ceonornu- entl'Iprise-thl' keystone Industry of the fourth sector, I'l'oplt· doing knowledue work will find that the skills required to create and prm-ess knowledge producnvi-lv are the basil' skills of leaming. Ll'arning, then. will 1101 only be ner-ded to fal'i1i!ult' work-lue transitions. but will he a major form olwork ill the l'11lt'rging economy Till' roll' of tilt' Ill'\\'II.'Clrnillfl enterprise in the post mdustrtnl cvouomv is Iar 1ll00T pr-rvastve and pruduct tve t hun that of tilt' t rndl t lonul. industrial-,Igt' institutions of adult edurut iou and traillillg. Till' new l'('011Om), demands an adult ll'arl1illg S~'stl'1I1that is vntu-pn-neurtal. compet ltive. and consunu-r din-cu-d. and that employs the most powerful and l'ITi('il'l1t 1ll0dt'J'I1 Informauon techuoloatcs. Till' toundauon of till' new learninq enterprise is aln-acly ill plarc. Basi
EN'I'Io:HI'HISI':

If it were technoloutcally infeasible to increase Ow productivity of education. this attitude might be understandable, But the revolution now under way ill computation and u-lecommuntcauon technology actually offers the opportun tty to vastly expand the product Ivtty of the learning process for learners of all ages, A recent study of tnstructtonal tcchnology by OTA concluded that: Costs for labor-mtenstve educat Ion and training methods ront tnue to cltrnb faster than t he Inflation rate. while costs for Information technology ron 1Inue 10 drop pre('iplto\lsly, These trends will result In a steadily growing number of appltcat tons tn which technology-based instruct ton is dearly t he most cost-elfecttve method, :1;'

And. a research conference Oil computers in educauon sponsored by tilt' U,S, Department of Education coneluded that "strtk ing tmprovement in the quality and productivity of instructional computer systems is attainable with a coherent and sustained research investment. ":Ih A few insutut ions are pushing technologic'll Innovation, At MIT. Projcc: Athena. inttiated by Dean Jerry Wilson of the SdlOOI of clIgilll'('rlng. is a five-year plan to explore the use of computers in tcachnu; with 850 million in equipment and other support donated by IUM and Digital Equipment Corp."? And Carnegte-Mellon University, a leader in applying computers Widely to instruction in the arts and humantt it's in addit ion to science and technical Iu-lds. is plallning to create an in tegrated network, with help from IBM. linl,ing up to H.OOO campus computers, :11-1 Nevertheless, rather i han emphastze the computer as a nudtum to expand t he productivity of instruction. many 01 t he recen t edurat ion reports focus 011 making t he COI11purer a sll/~j('('1 of tnstruct tou. all adjunct component of "Iiu-rary" to he conveyed through traditional classroom nu-t hods, Marc Tucker, dltT('tor of tilt' Canwgit' Corporations I'roject Oil Instructional Tt'dllwlog_\' and Eduvat ion. condemns this undenry bluntly: "Whut s going Oil in the majori t~· of sthools ill tilt' numr of com pu t er Itterac: is IIIisgu tded. ":I!' Compuu-i lit{'racy cannot ht' tau~lll lx-ruuse t lu- techI1olog_\' is evolvinu so rapidly that tur rent k nowledue heconu-s obsolete ill a matter of months. Computer li:l'nl('Y 1H • .I

POI,le,'

need not be taught because the technology Is rapidly becoming so "USCI' friendly" that tilt' vast majority of compurer users will never need to know mort> about how a computer works than they can learn ill a few minutes. "Five years from now." says Esther Dyson. president of Elsveuturc. publisher of a respected computer Industry newsletter, "people won't need to be computer-literate. Computers will be people-literate, "40 The mania for compu ter IIteracy only serves to distract attention from the growing opportunity and urgent need to apply modern technology to enhancing the productivity of education. John Diebold. a leading authority 011 mforruatton technology industries. observes that educarton in ~eneral is a "major area that has been slow to adopt the computer. which is probably the most important thill~ to happen to that field since the prtnung press. "41 While there are only about a quarter of a million computers in Instructional usc ill elementary/secondary schools today. there are computers in more than 10 million homes. and the lat tel' number could double within the next year. Sales of desktop computers for both home and business are explodin~-lBM sold more Personal Computers (pes) in the first two months of 1984 than in the prevtou s two years. Infocorp .. a market research firm. estimates that a computer will be found in nearly one of three American households by the end of 1985. and in el~ht of ten by the end of the century!" Another leudtng market analyst. future Cornputtng Inc .. claims that over 70 percent of educational software will be sold to the home market by 1987. 4;~ A new generation of educational ~am(>s will rinp; up annual sales of 83 billion in five years. according to Electroruc Arts. a leading software publisher. ·1,1 By t hr next decade. not only will most U.S. homes have computers of growin~ sophlsttcat ion. the majority also will have broadband communications access-via cable television a.id/or videotex (two-way. interactive video by telephone or cablcj-c-to a burgeontng array of Interactive information resources. Employees will find even more powerful tcvlmolouu-s=-for example. micro-mainframe computers ltnkcd in local networks. interactive video19

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disks. and vtdeoconferenrtng=-avutlablc the job.

for learning

on

The Software Gap The main technological barrier to vastly Increaslng the producttvtty and accesslhtlltv of learning Is 110 longer hardware but software. OTA's two-year-old report found ",~el1eral widespread agreement that. with few except ions, the quality of educational software-curriculum matertal designed for educattonal technology-vnow available was. in general. not wry good. ",I" But two or three years in todays explostve information industry Is practically a lifetime. In just three years. video games went from being a minor adjunct of the toy business to a 87-billion-a-~'ear entertainment industry, with sales greater than motion pictures or recorded music. (The shakeout came just as suddenly: revenues declined by more than 30 percent ill one year.) Hundreds of entrepreneurs. some barely teenagers, suddenly emerged to make quick fortunes by designing software for the gamt' market. In fact. the market for computer software of all kinds is booming. This year. 20,000 new software products wfll be marketed-s-cqual to nearly half the number of new books published (and computer-related books arc the hottest catl'gory of book sales). Recent 'id\'an(,t's in artificial intl'lIlgrnce research promise to advance the stall' of the art oflcarning technology rapidly DEBUGGY. developed at the Xerox Palo Alto Research Center (which spawned many of the advances in user- tru-ndly elt'sign incorporu t ed ill Apples new Mart ntnsh ltne l, is in t hv mamstreum of work on computeraided inst rurt ion. one of the most act ive subltelds of ArtifiCial Intdligt'IH'(' (AI) research, DEBUGGY is a "responsive tutor." a program which adapts itself to t he leurnma Ilt,t'ds of an individual student-a quantum advance over the "progranunco It'arnin~C of {hl' 1960s and tile ill-conceived "computer lin -rarv" efforts of rerent years.'!" As the market for Video gamcs has leveled olt, cornpurer entrepreneurs art' turning their at teuttou to rlu- instrucnonul murkr-t. A n-crnt issue of Electronic L(,(lrTIifl9 listed 200 educational soltwart- producers. and a 19HO in20

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dust ry st udy iden t ifled some 304 edurut ronal software developers.:'? Future Computtnu, Inc, estimates that sales of vducat tonul software will exceed 81 billion a year by 1987. rouuhlv threr-qiuuters of wh Ich will be for software to usc in the horne rather than in schools.'!" William Norris. chau'man of the Control Data Corporation. and all early and perslsteut belu-ver ill the Importunce of the learning marker. asserts t l iat "Itftcen vears from now education is I-!oill~ to be the largt.'st source of(eonl rol Data's) revenues and profits, "·I!I

The Rise of Thlematic Learning The thrust of t hesr technoloatral trends is unmistakable. Tilt, traditional school-a ce n t rul izvd e d iftce . compartmenraltzed into a warren of classrooms. each stratified with rq~inll'nted rows of desks. and relying on Icctu re/rec ttut ion as the principal medium of instruction-will have almost as little place in the 21st century's learning ell terprise as t he blacksmith shop has in todays transportation industry, The vanguard of tOlllOITO\\'S learn inu industry can be seen in such 11('\\', network nrganizat ions as Tl'1rlearning Systems, 111('. and Nut innal Ecluca t iOI1 Cor porat ion's EDNET. These ('11 ierprtses an' a quant urn advance over traeli t tonal cor respoudcucc courses. They art' set lip to distribute instructional servtces dtrectlv to consumers virt nallv anvwlu-re tlu t i:l personal computer call be hooked to a u-h-phone lim', And. unlike courses by mall. they permit direct two-wav ('0 III I11UII teat ion ln-tween student and u-aclu-r or amom; st uden ts. The uutornaunn of learning will not replace tilt, daycan- tunct ton of l'it'IlIl'lItary/sl'('OIHiary sl'i 100 is , but it ran help reduce costs wlule vnablnu; students to learn mort'.

Iasu-r. For adults. tvlvmat ic tel'illlologit's at tuck t he two most Irequeutlv ciu-d barrn-rs to part icipa: iOIl ill organized !camillg: ('ost and t inu-. 'It-lcnuu«: leurnuu; will be cheaper bcruuse of lower overhead and ~rl'atl'r compct it ion, And it will not onlv save t lu: t ime lost ill t ravel and in the inrfftciellcil's of clasxroom Instruct ton but also will perm it learning to be sclu-dulcd at the convcntenre of tlu: consume ..... 21

'lelemauc learnrng also will g;ive professional educators the opportunity to earn virtually unlimited income by selling the products of their instructional talents to audiences of hundreds or thousands or even millions. instead of to a classroom of only a few dozen students. Despite these dramatic implications. the telernattc revolution has yet to be accommodated by public education policy. Policy that remains locked In to the traditional form of education tncreastngly will obstruct the Junction of learning.

The Tratntng Policy Gap In 1983. before the dlversiltcatlon of the Bell system. AT&T signed a milestone contract with its major employee unions that committed the corporation to a 836 million program of training and retraining. open to all employees with more than one year of seniority. What made this agreement a watershed was that the training/retraining to be provided is not geared to any specific job but is general in nature. Thus workers whose jobs are threatened by technological innovation have the opportunity under this program to be trained for new careers. by their current employer. Commenting on the significapce of the AT&T contract. Paul Strassman of Xerox noud that "the union is now seeing education as big an issue RS wages and benefits." And THW economist Pat Choate charactertzes the agreement as being "on the cutting edge of where the Whole country is going. "Go While prouresstve companies and labor organizattons such as AT&T and the Comrnuntcatron Workers of Arnertea are creating innovative arrangements for meeting the human capital needs of a new economy, public policy on training and retraining is hobbled by outworn assumptions and misguided efforts.

A Narrow FOcus A basic flaw in governml'Ilt policy on training is the focus on a limited range of training needs and opportunities. Training is actually a large. sophisticated. 22

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growt hind US Iry. The t rai nln~ provided wit lun corporations I~ as large an ell terprtse as all of formal h iglH'r eduration. accounung for 8:30 billion to 850 billion In annual expenditures and employing abou t 700.000 full- and parttime tnst rucrors."! And the number of institutions providing vocational education ill the United States has growlI from only 600 in 1960 to over 8.000 today.!>2 The 000 is the largest single trainer in the United States (and probably the world). In fiscal year 1985. DOD will invest nearly S 18 billion and 260,000 person-years (full-lime equivalent) in formal (institutional) training and educauon. Since World War II. millions of veterans have received addtttonal educational benefits from military service through the famous "GI Blll" and special tuition-aid programs that succeeded It. The opportuntty for training and educat ion is critical to military recruitment. OOD surveys show that "training for a ctvtltan job" is given as the principal reason for enlisting by the largest number (28 percent l of new recruits. "Better myself In life," is given as the main reason by the next largest segment of enlistees (20 percent l. followed by "money for college education" (15 perrentj."' In a study for the Americau Sortety for Training and Developmcn t. An thoriy Carnevale and Harold Goldstein concluded that the amount of training demanded by the U.S. economy will increase faster than total employment during the 1~80s. The reason: not only will the fastest growth in t he labor force he in the 25- to 44-year-old age cohort-the very age group that ret-elves the most training-hut employment growth will be concentrated in just thoxe industries that require the most training.=>4 Yrt public policy addresses only a very narrow segment of the broad spcctrum of training activity. ignoring many of the important needs for economic development. Existing vocational education focuses heavily on entry level training. and negle('ts the needs for retraining as well as the needs of advanced-level. skilled workers.Y' "The public training programs that do exi.st serve less than H percent of the popular ion." says Pal Choate: and. "they for-us prtrnartly on t he ('('ollomi("ally and culturally disadvantaged and provide some entrv level training while 23 0 •

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~ivin~ very limited attention to retraining employed worktheir skllls. ":,Ii Echotng this view, a report of the Busmess-Htgher Education Forum concludes that ". . , the scope of existing policies on education. training and retraining. which concentrate prunartly on youth and the disadvantaged. must be expanded to Include the entire work force, "!l7 Though publicly funded training programs concentrate heavily on t he younu, disadvantaged. and hard-core unemployed, the total universe of training and continuing education is slanted heavily in favor of those who are already most well-off. Uri tor-educated workers receive a disproportionately largl' share of all training, III 1981. workers with four or more years of ('ollege were IS percent of the labor force. but 35 percent of the trainees. Those with one to three years of colleue wen' also 18 percent of the labor force. but 27 percent of tilt' t ratnees. At the other extreme, workers with less than a Iull high school edurat ion wi-re 23 percent of the labor force but only 5 percent of the t rat nces. :,H SO. prtv.ue t rainuu; J'('SOllJ'('CS art.' skewed toward the top 01' thejob pyramid. wlule publirlv Iundedjob programs concentrate on the very bottom, lcavinu the mass of workers in thr middle-tht, ones whose _johs art' most threatvned h.\· !t'('hllological and ccononur changes-with the least support for t raining or retraining. ers and upgrading

Large versus Small Employers Allot her distortion in training policy n-sts on the dnIcn-nt roles ill eruploynu-nt of largt' versus small compani(·s. In the past dt'('adt'. small husmesse» provided the great majorrtv otcmplovnu-nt growth in tile U.S. t'c()nol1l~'; Fort 1I I It' :;00 corpnrut ions contrtbuted only a Iew thousand of tilt' rollghl~' 20 m lllion newjobs that were created. Small cumpa nu-s an' the nut lo ns major training .I.!;rolllld for new workers. inl'!ft·('t suhsidizillg the training costs or big corporut inn» as snialler hustru-ssr-s lost' t'XPt'rienrr-d workers to the hight'l" pay largt'r nrms can alford. Compunu-s with Iewr-r than 100 vmplovees accouut for 5~ PlTl't'lll of total emplovuunt , hut t lu-y hire 67 perrt-nt of Itrst-t tnu- workers. Yt'[ most k(lt-raJ uununu grants go to big, not small, ('OII1P percent OWl' the decade of the WHOso this I't'PI't'Sl'lIts all ilHTt'LlSt' of only (jOO.OOO.iobs-1.5 million to 2.1 rutlliou ill ImJO. still OIlly 1.5 percent of the 19HO labor lorn'. hH Hiuh-teth sunply will not have a major Impact Oil total emplovment. Nor will higIHt'('h otter " PLlIlt.l(·t'" to thl' highly paid, skilled workers. ill such heavy mdustrtes as automobiles and slt't'l. dlspl.u-ed by IIH' cornlnu.uron or foreign compet it iotl and tt'dlllological n-nov.u ion. Then: will not be t'llough high-tech jdhs to go around. The c1isplan'd work-

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POLICY

ers will need to he thoroughly retrained to have any chance to ~et such jobs. and many of thcm. though skillful in their traditional work. lack the basil' lcarrnng skills to be easily retrainable. And. most of those who do make a successful nugranon Irom their htuh-wag« industrial jobs to high-tech companies will be forced to accept lower wages. simply because no other industry pays as much as such basil' industries as cars and steel. In 1982. the average wage in the steel industry was 8530 a week: the figure for (he elect neal and clcctrontcs tndust rIes was 8370 a week. close to the average for all manufacturers, But ,e;ruwing productivity and automation In all manufacturing mean that many displaced industrial workers will have to take jobs in service companies. where the average weekly wage was 8242. (;!J Most of the jobs available during the 1980s. both new jobs and existing jobs. are not going to be l1igh·tech jobs. Ac.cordtru; to the Bureau of Labor Statistics' (BLS) forecast. the following will he the fastest growing occupations in the U.S. economy during this decade?": 94 thousand/year

Nurses Aide Guard

Pracural Nurse

70 60

Machtne

5H

Repair

Computer Operator

46 45

Bank Clerk Dining Room At tcudam/Dt-dtwasher Hornemuker/I lome i h-alth Aidl'

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Bank Otftrvr

2H

Teacher's Aiik--Ialld, nat ural J'f'SOUI,(,('S, 1>11ild i nus. lur torit's, a nd t ru nxpurt a t Ion Iaci l i t h-s . 1'01' vxnmplc. 'lhr O\\'IHTS of such assels are t hr matn ,){'llt'I'iciarit'S-Cllld thcrrfore an' usunllv t lu most carru-st ad\'ol'iI(('S-o!' lTOnonuc dr-velopuu-nt , Slich propertv owmrs arc illlt'J't'slt'd ill jobs olily as olle of st'\'('I'al l'()IlIIH'liIH,~ tacll,r ... illllllt'lIdll.~ till' value of tlu-tr propt'rt~', Also, what is betH'tidal to III\' value of one

ptece of local property

even when

Olll'

often is detrtmerual

property owner may benettt

to another,

so

from more jobs

allot her will not. This observat ton is not meant to suggt'st that there is an absolute conflict between "jobs" and economtc developnu-nt , Many working people an' also property ownerscommonly. of homes, And increased employruent often may be necessary to devclopnu; lill' econonuc value of property But thc rorrcspundenrc. at tilt' Slate und local levels. Is not vxactlv OIl('·tO-OIlC. and mtsundcrstaudtng the reluuonsh ip can lead to dtsappoint ment and Irustratton. For example. g{'ntrilkatioll may trn-rruse t he averauc standard of living in a giv{>n urban area. But it commonly does so by replacing the resident poor with an immigrant middk class. not by raising till' origill:ll inhabitants to a hight'r level. A CflSt' ill poiut is Atlantic City, New Jersey, Though till' legalization of castno gambling has contrtbuted substunt ially to local {'('onullli(' development and to the state treasury', few hvnef'us have acrrtu-d to origillal n-stdent s. Jobs have gOIlt' nuunly to imnuurunt s and t here has been lit til' mult iplu-r effl'et Oil non-castno bllSilH'SS('S, Most of tile poor n-mam as thev were or have ber-n Iorrcd to leave.

Mobility and Locality TIll' SCl'OIICIImport ant complic.u ion w« must coun-nd with ill devvlopuu-nt polil'~' is tilt' n-markable molnlttv of pcopil' ill Auu-run. 111 il nut lou t h.u cousututtnnallv prohibits harr ivrs to llli,~rilti()Jl or romnu-rr«- .unoru; tilt, statt's. pl'Opit' ;11,(,I'I'(,t' to "vr.tt: wl t II t hrir Irvt " and 1ll00'l' to wln-n-ver tlu-v ran ~t't t hc br-s: reward for tlu-tr labor, This Irvcdom otnuur.u iOIl--t'SSt'llt ial to mak nu; t lit, United Statl's the most prosperous conuuou market ill lIistor~'rumplnutcs tilt' n-l.urouslup of emplovnu-nt and luunun capital to t'COllOlllil' dr-vvlopnu-nt at tilt' statt' and local levels. BCl"IlISt' pvopk- art' fret' to 1110\'(' around. t lu-re is no \\,~I~' to ('J'l'att' jobs I()('all~' jus: lor til(' local n-sidvnt s who nrvd them. TIWUL!,h it is ronuuunplactlor poliurtans to (>1'01 111St' "jobs" job

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market.

The diverse programs

and proposals

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retratntng-c-frorn JTPA to Pat Choate's ITA-founder on the inability of the individual worker/student to link learning to earning, that Is, to build a bridge between education or trauuru; and real employment opportunities, The principal public agency devoted to serving this need. the Employment Service. "has gained the reputation in many quarters since the mid-Bus of being a labor exchange for the lowest-paid and the highest-turnover jobs, , , , Actually, 38 percent of the new permanent job orders listed with the Employment Service are designated as low-skill. low-status occupations by the Department of Labor; "fl;) What we need, instead, says Lawrence Vickery of General Motors, is "some kind of surveillance system that shows jobs that do exist. where Liley exist and when are (other.s) going to be available, "H4 To be fully effective, the learning enterprise must be able to provide the consumer-s-both the employer and the individual worker-with sufficient information to know: • What an' the learn ing requirements of not only existing but future occupattons? • What is the competitive environment for a particular occupation (that is, how many and what kind otpeople arc pursuing the same career path)'? • What learning products. technologies, and services are available? • What is the expected return on specific investments in tratnmj; and cducat ion '? • What and where arc the real opportunities for employmen t '? The same kind of information is critical to the suppliers of products and services for t he adult learning marIH't to develop their bustness plans. to at tract Investment. and to meet customers' demands, This tnformat ion dot's not now exist ill a form that can be used by the ('(HlSUI11CrS and supplie-rs who IHTd n.

Limned Resources Ftnally,

man capital.

anv pract Iral solut ions to t 11('probk-ms

adult learrunu.

ol' hu-

and ('('()nol1li(' ck-velopnn-nt-c•.

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the problems of the four Fs=-must recogntze the (:011stratnts of an era of ltnuts. The U.S, govcrnment is faced with ballooning deficits and is in no condition to take on massive new fiscal burdens, American industry, hectored by ever more intense toretgn competition. has made productivity and cftlctcncy its new watchwords, These trends have led to new more pragmatic thrusts in policy thtnktna. • an interest in containing the ~).owth of government. in deregulating several industries, and in privatizing some public services: • a concern for increasing the efficiency and productivity of both public and private enterprises: • a desire to reduce dependency and to increase local and individual self-reliance: • a broad sentiment in favor of partnership. both among governmcnt entities (for example. the Reagan administrations New Federalism Initiative) and between public and private institutions: • a movement toward entrepreneurial management in both private and public organizations: ., a popular antipathy for bureaucracy and "red tape": and • a tasctnat ion with high-technology tools-computers, telecornmuntcattons. robotics, and so forth. The concept of the learning enterprise itself is a way of accommodating solutions of the human capital crtsts to the reality of limned resources by ernphastztng technological mnovat ion. productivity. private ini t Iat tve. competition, entrepreneurship. and a primary focus on the needs of the learning consumer. America is now spending 8100 billion to 8200 billion or even more each year on adult learning of various kinds. DOD spends about S18 btllion a year on formal training and education: a large portion of the total defense budget represents the cost of on-going military training. There is no shortage of total resources available for adult learning. Resolving our human capital crisis does not necessarily require more resources. Rather, the resources already invested in learning need to be allocated more efficiently, more drcet lvely, and in some cases more equitably. 5~3 !I ( '0

Tim

1.~Al~NINGENTEIWlUSI!:

What Must Be Done An economy undergoing irresistible structural transformation contains the threat of severe human capital crisis and painful social upheaval. A national effort is needed to crystalllze public awareness and concern and to mobilize support for action to transform this crisis into an opportunity. With the cooperation of business. govemment , nonprofit organizations. associations. and others. the learning enterprise must and can become the backbone industry of a new. fourth sector of the modern economy. In general. we must work to attack the barriers described above: remedy gaps and deficiencies in existing polictes: educate the public to overcome popular misconceptions about the increasingly critical role of adult learnin~ in economic development: develop better information about all key aspects of the emerging learning enterprise: and find solutions that make minimal demands on limited public and private resources. Of these. the first objecuve should be to develop better information about the learning enterprise in a form that provides a comprehensive map-the big picture-of the adult learning system. including supply and demand. public and private. formal and nonformal. proprietary and nonprofit. institutional and individual. traditional and emerging elements. This mapping of the system is urgently needed by: • extsung and prospective suppliers who need to know more about the needs. demands. and technologies of learning markets; • consumers who need better information about the options available to meet learning needs; and • public and private polirymakers. as a basis for devising policies that remove barriers and provide low-cost. cfttctent stimulation to the growth of the lear ntng enterprise. Of course. gathering more Information about the learntng enterprise will not. alone. provide sufftcient impetus for change. A detailed plan of action demands more rigorous research and analysis than this exploratory study has been able to provide. But t he following options for action are at least worth thinking about. 54 I. •.

'1 l , j

NI!:~lJs

HedtKe emphasis on academic degrees. There is no Job in this economy that requires an academic degree for its effective performance. Demanding academic rredenttals as a condition of employment only serves as a barrier to competition. both in the job market and in the learning market. Fortunately. the trend in recent years has been fur more employers to include the phrase "or equivalent" when menttontng degree requirements in their job requisitions. The result of the proltferatton of degree granting and the decline of academtc standards is that a diploma. even from an allegedly "top" institution. by Itself tells an employer next to nothing about individual competence. Focus on evaluation oj cOT11petcmcy and achievement. The efficiency of the learning market depends on the ability of the consumer-whether individual or employer-to measure the value of the products and services offered by vendors. What needs to be measured is the competence and achievement resulting from learning. Evaluations administered by vendors themselves are mevttably handicapped by a contltct of interest. We need more and better independent testing and evaluation services-such as the Educational Testing Service-to assess the productivity and competitiveness of the learning process. Expand U&D and technology transfer: A larger and more focused investment is warranted in basic R&D in cognitive science and learning technology. Much of the research now going on in artiftctal intelligence and related domains of computer -ctence is relevant to learning but needs to be applied more explicitly to human learning needs. Much research is focused on childhood learning and development: adult learning and development is qualitatively different and demands at least an equal investment of research effort. DOD is the major source of support for research in artificial intelligence and advanced computer technology: DOD also is the major developer and user of learntng technology. Although some will debate whether DOD should be the focal }otnt for this work. the important need is to transfer DOD's technical knowledue and resources for adult learning to the civilian learning industry. To its credit. the department has been actively supporting such transfer. What may be needed is a complementary effort 55 "J, I ) .'

from outside of DOD--a collaborative venture of learning providers. consumers. associations. etc.-to identify what DOD has to offer and to accelerate its dissemination in the civilian economy. Develop human capital investment advisory vices. To the extent that we have better intelligence

ser-

about future demands for human capital. our investments in human capital development arc likely to be more productive. Current job forecasts clearly do not adequately account for technological and other environmental changes. Actually. predicting future jobs is almost impossible. and is not particularly relevant to human capital investment decisions. What would be somewhat easter, and more useful. is to tdenttty how specific areas of knowledge and skill compare In terms of expected benefits and risks. The need is not so much for bet ter official forecasts as it Is for a more robust supply of advisory services. People who are buying real estate 01' Investing in stock find an enormous social infrastructure-brokers. lawyers. accountants. books. newsletters. seminars. financial institutions. govt'rnment regulators. consumer groupsready and eager to help them get a rewarding return on that kind of investment. By contrast. the sources we can turn to for advice on an investment in our personal human capital arc less abundant and less sophisticated. With over 8100 billion (perhaps over 8200 billion) being spent annually in the U.S. on adult learntng, developing advisory services for human capual tnvestors (100 million or more people) would seem to be a golden opportunity for en trepreneu rs. Focus lelernatlcs industry products learning market. A number

and services on

of companies in telecommuntcattons, computers. and software have begun to pursue educut ion as an attractive market. Bu t many of these new entrants to the learning industry have been concentrating on products and services for children rather than for adults. The adult market is actually a larger and more lucrauve one for new venturers in the learning enterprise. Though the amount of money devoted to elementary/ scr : -lary education seems large. most of it is tied up in rn l' .. tions-part tcularly for bu ildi ngs and salaries-and lite adult

56



-4.

NElms

is not available for dtscrettonary purchases from private vendors. There are only a few thousand schools in the country. and st'lling to them is difficult. The adult learning market is over $100 billion a year, The majortty of the market is non-Institutional. For the most part. adult learning is purchased by the consumer (in contrast to childhood education. which is purchased by someone else 011 behalf of the consumcr.) The demand for adult learning products and services is substantial. it is here now. and it is ~rowing as the baby boomers age. as career transitions become more frequent. and as the distribution of employment In the economy shifts toward knowledge work and training-intensive industries. Uevise the ftnanctnq q{ human capital. Within the generally confused social contract concerning human capital. the area most urgently dernandtna attention is finance. We need to rethink the means for financing human capital development and the resulting dlstrtbut ton of benefits. costs. and obligations. U.S. tax laws already favor physical capital over human capital development; a tax bill recently passed by Congress would further reduce the Incentives for investment In training and education. Although Pat Choate's ITA proposal may not be perfect. among its most commendable features is the linkage of savings to human capital investment. This is an important shift away from entitlements and borrowing as major mechanisms for ttnanctna adult training and education. The overall problem is complex, and deserves the serious attention of public and prtvate policy analysts. Hetltink. This exploratory study necessarily raises more questions than It answers. Its immediate goal Is to provoke serious reexarrunat ion of the crit k..al role of adult learning in a changing economy Government leaders need to rethink many of thetr existing poltctes concerning education. training. economic development. ami human capital. St ues in part tcular are likely to find literally dozens of state polictes having an impact on adult learning-accrediting and operating institutions. ltcenstnu professions. providing financial ald. administering tests, and so forth. This reexamination should Iorus Oil finding ways to accele-rate the maturation of the adult il'arning market. and to increase cornpet it ion. 57

...') .

'oJ

Tin:

1.I~AI~NIN(i E.!,;TEHI'I~ISI!:

Managers. workers. and owners in both private and public organtzauons need to rethink the social contract surrounding the human capital they employ Finally. people in the myriad businesses that constitute the learning Industry need to adopt a broad vision of their cconoiruc role. and must take the lead In building the learning enterprise our whole society so urgently requires. The learn ing en terprtse Is not a panacea for all the ills of an economy in transition. But it is an essenttal lubrtcant for the wheels of change. The good news is that the same telemattc technology that is causing economic upheaval can cncnnze the learntng process that the transformation demands. In the words of the philosopher Pogo. we seem to be confronted with an "insurmountable opportunity."

.J

Nones

NOTES

I, !'aul K Barton, \\'orkl{/I> '/hl1l~III()1(s: Till' Adult lioll (New Yo~l{: M(,(jn.lw·HiII. HlH2J, p,lOu, 2, P I>nl('kt'I', "quality Edul'alioll: Jou1'1Iai July W, 19Ha.

/11('

3. !'al Choate. U('to()lillfj Traillill9

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The I'Il'\\' Growth

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Jill.\' I HH2t, p.l. 4, "For Americans Unnble to I{('ad Well, LlII' Is a SNil'S of Small Crtses." Wall S/r('('1 .JollrTI(l1 January 17, IBH4. 5. ibid. 6, Basi«: Skills H('SOl I rn's

til til!' U.S. Work Forco , Fehruarv, IUH:L

York: l'('1I11'r lor Public

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7. Lenore Salt mau. DOD. H. A III(.'riCCl :..

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llourino«

II.

Harton. Work/1ft'

12, "Trends:

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p.2,

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BIBLIOGRAPHY

Commit tee 011 the Evolut ion of Work (19H:n TIl(! Future qf Work (Washington. DC.). August.

AFt-CIO

A Report to the Prestdent of the United States from the BusinessHlgl1r Education Forum (IBH3). America:-; Conipetiuoe Cnallonue: Tlu: Needfor a Nattonat Response (Washington. DC.). April. Barton.

Paul E. (l982). \Vorkl{te Transtliolls: Cotinecuon (New York: McGraw-Hill).

Tlu: Adult

Learning

Carnevale, Anthony n and Harold Goldstein (198:3). Etnplouee Tratruno: Its Changing Role and Clll Allnlusis q{ New Data. Amvrtcan Sortcty for 1hllnlng and Development. National Issues Sertes (Washington. DC: AST[) Press).

Ceuter

for Publrc Resourc-es (I!:}H:n Basic Skills iTt lite U.S. Work Force (New York). February

Choate. Pat fEJH2}. /(e/oolin.(J tlie Amcriran v.'or/~r()r('e: Toward Nationul Trainiru; Stral