• Fri
  • Sep 19, 2014
  • Updated: 7:02am
Jake's View
PUBLISHED : Sunday, 20 April, 2014, 5:33am
UPDATED : Sunday, 20 April, 2014, 5:33am

Why going to college isn't the answer to China's hi-tech dilemma

Close to seven million Chinese this year will graduate from college, up from 1.1 million in 2001. By 2020, China’s college-educated pool is expected to number 195 million people, more than the entire labour force in the United States that year.

Bloomberg, SCMP, April 18


I think I have mentioned before that I am not the world’s biggest believer in education, certainly not the college sort that now wastes the key years of young peoples’ lives in a go-nowhere debt trap.

What I have in mind in particular at the moment is a book I am reading – the autobiography of Steve Wozniak, who designed the break-through Apple 2 computer and only got his college degree years later.

Why he bothered is a mystery, the college degree, I mean. He learned engineering from his father, refined his knowledge with his friends and there wasn’t much that formal education did for him other, I suppose, than help him learn to read, write and take an interest in numbers in primary school.

It was 10-year-olds he went to when he wanted to pass on his learning. But now college is to be the answer for China.

The problem, we are told, is that foreign companies have taken advantage of plentiful low-paid and unskilled labour to keep China in the cheap and nasty stage of industrial development.

That is why the world’s biggest producer of consumer goods still has so very few consumer brand names recognised around the world.

But now China is to have more college graduates than the entire US workforce in just six years and everything will change. The Chinese are now going to be the world’s hi-tech leaders. Someone obviously hasn’t noticed that the engineering and design facilities of big tech companies worldwide already employ a disproportionately large number of Chinese engineers.

They are already the hi-tech leaders, but outside of China. There is a reason for this, and it has nothing to do with education. The reason the country with the world’s biggest production of hi-tech wares is not also the place  where it is predominantly designed or branded has to do with market economics.

Simply put, if you cannot properly price the work you do relative to competing demands for the money you need, then you can never bring much innovation to your business. Someone else with little knowledge of what you do is making your most critical decisions.

And this is what is still happening in China. At its most critical, the state still decides  who will get what amount of money for what purpose and at what price. It also still plays a role in allocating who will get what physical resources at what price and what other commercial advantages they may be given. No one will ever turn a great idea like the Apple 2 into a commercial success in a system like this. The bureaucrats who make the critical decisions will never recognise it, are not able to recognise it, and will starve it of resources.

The money and the other opportunities will instead go to yesterday’s big ideas, not today’s, and nothing is likely to come of them because, by definition, they are yesterday’s and that’s in the past.

If someone in China does come up with today’s new Apple 2, he will probably have to develop it and look for the backing in the United States, as usual, returning to China only later for the mass assembly.

As I say, lots of Chinese people are at the leading edge of technology, but Chinese industry itself lags there.

The only workable prescription for fixing this and going upmarket in industrial effort is market pricing of that effort. If it involves export industry, as it does in this case, then it needs an open capital account and a free floating currency. In talk alone have either of these reforms really gone anywhere.

And now it looks like the authorities in Beijing are chasing the wrong remedy again. Their idea is to condemn Chinese youth to further boredom in that intellectual desert of academia under the illusion that a college ticket is worth the price of the wasted years.

If only college did anything else as well as it does alcoholism training.


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This article is now closed to comments

It is typical for a journalist to underestimate or fail to understand the value of expert education.

A lot can be said whether the Chinese education policy is a delivering the right kind of workforce for its economy now, and/or for the coming decades. And it is certainly debatable whether to some degree the every level of college graduates is not at least putting the cart before the horse to some (college) degree. This kind of over-education is typical though of many middle income economies though, and China is definitely not alone in having a . Many Filipino domestic helpers in Hong Kong for instance have university degrees, but are doing unskilled labour because there aren't enough skilled jobs at home.

As a whole though, it is much better to have an over-educated workforce than an under-educated one, especially if you are determined to move your economy towards higher added-value areas, which China certainly is. Whether they will succeed in that, whether they are doing it the right way, and how long it will take if they do... we could debate that ad infinitum.

On an individual level, and certainly in China, getting a university degree remains the best way to spend your early 20s - in terms of future chances of employment, lifetime earnings and personal growth. Mr van der Kamp's general dislike of university education is extremely odd. Telling 18-year olds that they can just skip that 'nonsense' and become outliers like Wozniak is hugely irresponsible.
US government hardly is involved in developing technology as we see pouring out from the Silicon Valley. Required capitals came earlier through venture capital. Nowadays VC has involved into many different forms but all still free of government involvement. China is voided of such means necessary to nurture technology development.
However, there is a huge underground landing outlet in China but like the banks and trust funds, they all putting resources into property development. The fact is that property development is a sure and speedier way to get rich than investing into something requires invention. When local property market is unfavorable, they go abroad to buy property.
Hong Kong too suffers from sucking its capitals dry from doing anything else except mostly in property development.
It has nothing to do with political system. Rather it is wrought in the Chinese mind that investing in property trumps anything else.
As long as there are plenty of cheap labors around, use of technology in our daily life become unnecessary. India, despite its IT development for years, China and right at home Hong Kong all are going about their life mostly without even have to think low- tech. We have cheap domestic helpers, food servers and security doormen in Hong Kong. Necessity is the mother of invention is still quite right. A college education has absolutely nothing to do if invention is the byproduct.
CY Leung wants to set up a technology bureau -- why?
University education is not all useless obviously. But I have to say university education in the field in creating writing and design and art in general can’t quite make a good writer or a good designer or painter out of an ordinary person. For the creative sector, university actually serves as a clearing house in endorsing the talented individual. I can’t remember the name of a university in US whose faculty once explained the outstanding result of its program with many graduates who are famous writer was its cherry picking of the talented for admission to the program.
Yes there are things that hardly can be taught. So JvdK is right only partially. So ask the question why those innately talented ones still pay for what is already there within them?
Jake hit the bull's eye.
Education is not everything that the Chinese, Koreans, etc. love to make it out. It's Confucianism from more than 2500 years ago, emphasis on education and strict submission to social hiearchy (a.k.a. Feudalism). To be sure, the level of literacy in China at that time is low compared to today so education was highly priced. But once a nation attained the acceptable level of education and literacy, education becomes less important. The successful people in the 21st century are not people armed with several degress or Phds, but people who are able to THINK. That has always been the case throughtout thie history of mankind. Sucess does not belong to the educated elite, but to the individual who able to Think Ahead and Innovate. Most of the educated and highly educated are salarymen, working for people wth basic education. It's EQ not IQ. I always advise my children that education is only a first step into the real world and Success depends not on your degreee but your ability to Think and Act. I further remind them the MBAs and PHDs are all working for the lesser educated. I know because I am in that position
Agree. I said the similarly thing to my kid. I worked for 2 bosses, same industry. The one with a Primary 6 education literally built a mint. The other is an Ivy Leaguer who bankrupted one and has just made another in financial difficulty.
It's the person more than the education.
And would either one of these two bosses given you your job if you hadn't had a university degree?
If going to college isn't the answer to China's hi-tech dilemma what is? A college education is only the start for learning the basics and not an end. It is only the start to whatever you are going to do next.
Did you read the article?!
The bigger problem is being overlooked by most - except for Foxconn's Terry Gou.
Today's factory worker shortages are a desperate cry for production engineers, not new product designers. Japanese figured this out 3 decades ago. When I visited a battery factory near Tokyo, the production processes were entirely automated including a magnetic conveyer, taking partly assembled goods between floors. At that same time, and even today, most battery production in China is done with primative machinery, and lots of semi-trained workers. Probably China's minimum wage needs to rise further, until it becomes essential to use the talents of production engineers to modernize manufacturing processes. Educating students for these types of jobs is what China needs to be doing.




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