Education was key to the US becoming a superpower

The higher education movement in the USA gave the USA a GDP growth advantage from 1871 to 2012. It appears to have spearheaded a higher long-term rate of growth in per capita income in the US relative to the UK and other major European countries. The US had a 0.5% GDP growth advantage.

Prior to 1860, U.S. per capita gross domestic product (GDP) lagged behind that of the United Kingdom. This changed in the second half of the 19th century as U.S. growth accelerated; U.S. GDP per capita surpassed that of the UK in 1905. Adam Cook of the State University of New York at Fredonia and Isaac Ehrlich of the State University of New York at Buffalo note that, in the 142-year period between 1871 and 2012, annual growth of per capita GDP averaged 1.9 percent in the U.S and 1.4 percent in the UK. The authors argue that differences in the availability of higher education explain this divergent growth. In particular, the Morrill Act of 1862, which used Federal land grants to incentivize U.S. states to build universities, rapidly increased the availability of university education in the later part of the 19th century. The trend continued with the expansion of the U.S. secondary education system from 1910 to 1940, which prepared a greater number of students for university enrollment, and the subsequent GI Bill of 1944, which helped cover the expenses of nearly 2.3 million college-bound veterans after the Second World War. As a result, the U.S. established and maintained a lead in higher education throughout the late-19th and 20th centuries, which in turn boosted human capital and growth.

Lack of education for women causes many countries to have vastly smaller economies

By not providing girls with completed high school education, cost countries between $15 trillion and $30 trillion in lost lifetime productivity and earnings according to a World Bank study.

According to Missed Opportunities: The High Cost of Not Educating Girls, less than two-thirds of girls in low-income countries complete primary school, and only one in three girls completes lower secondary school. On average, women who have a secondary education are more likely to work and they earn almost twice as much as those with no education.

Other positive effects of secondary school education for girls include a wide range of social and economic benefits for the girls themselves, their children and their communities. These include near-elimination of child marriage, lowering fertility rates by a third in countries with high population growth, and reducing child mortality and malnutrition.

China investing a lot into higher education

In 2013, China started a $250 billion-a-year investment in what economists call human capital. Just as the United States helped build a white-collar middle class in the late 1940s and early 1950s by using the G.I. Bill to help educate millions of World War II veterans, the Chinese government is using large subsidies to educate tens of millions of young people as they move from farms to cities.

Undergraduates do not matter as much for the economic competition of today’s advanced economies

Part of the issue is that undergraduates do not matter much and only those studying STEM are the main factor involved in technology.

At the undergraduate level, 80 percent are United States residents. At the graduate level, the number is reversed: About 80 percent hail from India, China, Korea, Turkey and other foreign countries.

There are fewer Americans in hot STEM fields like computer science, which serve as talent pipelines for the likes of Google, Amazon, Facebook and Microsoft: About 64 percent of doctoral candidates and almost 68 percent in master’s programs last year were international students, according to an annual survey of American and Canadian universities by the Computing Research Association.

Part of the reason is the booming job market in technology. Americans do not see the need for an advanced degree when there are so many professional opportunities waiting for them. The price is too high when they have so much student debt already.

The American Institute of Physics examined the issue of STEM and doctorates in Rapid Rise of China’s STEM Workforce Charted by National Science Board Report Jan 2018.

US retention of Grads

Most international students (48 percent) wish to stay in the United States after graduation, citing future job opportunities as the key factor influencing the desire to remain. Only 12 percent want to leave, but 40.5 percent are undecided. This latter group represents a sizeable pool of talented scientists and engineers who may—or may not—become part of the skilled U.S. workforce.

International students studying in the United States on temporary visas accounted for nearly two-fifths (39 percent) of all PhDs in science, technology, engineering, and mathematics (STEM) fields in 2013—a proportion that has doubled over the past three decades.

Employer-sponsored H-1B visas remain the primary method for international individuals to reside in the United States. The 2017 fiscal year had a regular cap of 65,000 visas, with an additional 20,000 visas reserved for individuals who obtained U.S. master’s degrees or higher. Because employment-based immigration visas (i.e., permanent residency) are limited to 140,000 per year, are subject to an approximate 7 percent per country
limit (i.e., ~25,900 visas per country), and are allocated on a preference-based system.

Overall researchers and AI talent

World Bank data shows China now produces 1,177 R and D researchers per million of its population, three times the level in the 1990s and in line with the world average. The U.S. produces many more researchers per million – at 4,321 – but that is more than offset by China’s population being about four times the size.

According to a 2017 Tencent Research Institute, there are just 300,000 “AI researchers and practitioners” worldwide, but the “market demand” is for millions of roles.

Tencent’s new “2017 Global AI Talent White Paper” suggests the bottleneck here is education. It estimates that 200,000 of the 300,000 active researchers are already employed in various industries (not just tech), while the remaining 100,000 are still studying. The US AI talent outnumbers China’s by about 2 or 4 to 1.

One independent AI lab says there were only 10,000 individuals worldwide with the right skills to spearhead serious new AI projects. The US has about 70-90% of the top AI talent.

The USA is currently far ahead in terms of global AI talent. The USA has more universities teaching machine learning and related subjects than any other nation, and more AI startups. America is home to more than 1,000 AI startups of the world’s total of 2,600, while China has nearly 600.

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