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Digital adaption, you're doing it wrong. STEM education needs rethink

Government market think-tank also floats universal basic income. Lions lie down with lambs

By Richard Chirgwin, 14 Jun 2016

With surprising timing, the Productivity Commission has dropped a report during the election campaign, criticising the widespread belief that science, technology, maths and engineering (STEM) education is an employment panacea in the digital era.

In a report likely to be dismissed by both sides of politics, the commission also said Australia should increase unemployment support, and has even, albeit tentatively, suggested the country consider a universal basic income (UBI).

The commission's paper highlights “relatively high underemployment” among STEM graduates and “apparent underutilisation of STEM skills” as evidence that “the current approaches are not delivering the problem-solving skills needed for technology rich work environments”.

Comp. Sci degree, working in sales

The IT sector is probably gearing up to rip into the report, since the commission notes that along with maths, “computer science qualifications have short-run employment outcomes that are just below the average.”

And those two are among the better performing STEM qualifications. If you're a mining surveyor or in the healthcare sector, you can expect to find work easily enough, but “employment outcomes for all other graduates in the STEM industries are below the average outcomes for graduates as a whole, in some cases by large margins (as in the life sciences, chemistry and the physical sciences).”

The IT sector doesn't retain people in jobs relevant to their training, the report notes, with “around 30 per cent of people with an information technology qualification do not think it is relevant to their job”.

The future of employment in general has the commission worried. It also writes that digital disruption drives inequality by eliminating jobs, casualising those that remain, and redistributing income in businesses towards the top.

Like Uber, but for stopping people starving

The employment shift is resulting in stagnating wages and a hollowing of the middle class (Vulture South isn't going to try and work through a few dozen pages of the report, but that's what it means), which is a risk to the economy.

Unemployment support isn't enough to give people mobility between jobs, the commission argues: “the income support system needs to be changed to ensure it is not a barrier to workforce engagement and helps reduce income volatility for low income workers”.

Hence its mention of a UBI, a redistributive mechanism that would help the workforce adjust to the “gig economy” and mitigating the risk that there'll be no mass markets left to buy things.

There's much, much more – Digital Disruption: What Do Governments Need To Do? weighs in at 251 pages – so Vulture South will merely highlight some items that caught our eye.

  • <b.Productivity – IT keeps promising productivity gains, but not delivering them. Today's sub-1 per cent USA multifactor productivity growth compares badly to the 1950s, a decade in which it ran at close to 3.5 per cent.
  • The Internet of Things is becoming a monopolistic rent-extraction mechanism for its largest companies, via proprietary data formats, geoblocking (since TVs, for example, are counted as a “thing”), and because there's such a low bar set for patents (allowing companies to wrap up their systems for trivial reasons).

If you believe that correlation can imply causation, the graph below is interesting.

Australia's collapsing patents

Australia's rate of patent filings has collapsed.
Digital Disruption: What Do Governments Need To Do?
Productivity Commission, page 38

Since around 2012/13 (a guess given the lack of detail on the time-scale), Australia's rate of patent filings per-capita has collapsed – a period that happens to coincide with the gutting of funding for basic sciences, most especially at the CSIRO.

Those who believe the government has also gutted the National Broadband Network will also get some nourishment from the report. It notes that to play properly in the digital economy, networks should be fast, accessible, and as close to ubiquitous as possible. ®

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