High Skills the Knowledge Economy: China and India Education and Changing Cultures of Competitiveness Bristol Graduate School of Education Hugh Lauder

Learning is the key to prosperity… Investment in human capital will be the foundation of success in the knowledge-based global economy of the twenty-first century (The Learning Age, 1998: 7). The middle classes have run the world since the French Revolution, but they’re now the new proletariat (Super Cannes, J.G.Ballard).

Outline 1. Views of Globalisation 2. The Global Auction 3. The Returns to Graduates 4. East Asia’s Century?

3 Views of Globalisation 1. The Head – Body View (Reich and Rosencrance) 2. The Reef Fish theory of globalisation – (Gordon Brown, IMF etc). Learning = Earning

…globalisation is entering a new phase. Already our Asian rivals are competing not just in low-skilled manufacturing but in high tech products and services. Once we worried about a global arms race. The challenge this century is a global skills race and that is why we need to push ahead faster with our reforms to extent education opportunities for all. Some argue that in this next stage, the mature economies of Europe and America can only lose and that all the benefits will flow only eastwards. I disagree. We are about to see a doubling of skilled jobs in the global economy. This heralds a world-wide opportunity revolution, bringing chances of upward mobility for millions…in a globally competitive national economy there will be almost no limits to the aspirations for upward mobility (The Observer, ).

3. The Global Auction: three key elements: – The rise of China and India – MNCs as Conduits - Quality = Price

Quality = Price The lever which is driving the present phase of globalisation is that of quality=price: We have to drive innovation, we have to be at the leading edge at reasonable cost…That’s it. And this can be transferred to the labour market. We have…to try to get higher skills at reasonable cost and high flexibility.’ Germany, Telecommunications MNC.

How is the Quality/Price Equation Achieved? The Role of MNCs and a Theory of Skills Capture: 1. Standardisation of: Process: People and Products. 2. The Supply of high quality graduate labour in China, India, Russia and Eastern Europe 3.Increasing R&D work in China and India

The Hollowing Out of the West’s Knowledge Base “The MNCs are our Teachers, China is a large school”. The MNCs as a conduit for knowledge. Chinese strategies including violation of IPRs Buying up the West; China and India SMT graduates in China and India studying in the US and UK

The Returns to Graduates Much of the debate about mass higher education has been about the graduate premium. This is highly misleading! In the United States graduate incomes have been in decline in real terms since the late 70s with the exception of those at the 90 th percentile (and the Dot.com boom)

The Evidence ( Note these data do not take account of extra hours worked)

The War for Talent The upturn for those in the top 10 per cent of income earners is in part due to the ideology of the War for Talent MNCs across the globe typically recruit from the elite universities in any country or beyond. This creates the pull factors in creating a global elite

East Asia’s Century? The scale and scope of change Different strategies in China and India Political and economic crisies