Lessons from India

by Daniel Bennett

Increasing educational opportunities is a hot topic this election season. Most Americans would agree that the youth of this country need an education to improve their job skills and prospects for the future, although there is considerable debate as to the approach that should be taken. One side would argue that we need to increase spending to make college accessible to a larger proportion of the population. Another argument, similar to the one made by the likes of Charles Murray, would be to focus on providing career and vocational training for a larger share of the population.

The debate over the path to a more prosperous future for all will likely continue to no avail for some time. In the meantime, the U.S. could learn a lesson or two from abroad. Take India for example, a country that was highly impoverished not long ago, but has since emerged has one of the hot spots for high tech jobs and manufacturing. Pundits will argue that India is siphoning American and western jobs by way of an unfair advantage of cheap labor and a lack of environmental standards.

But let's consider for a moment the oft untold portion of the story, that India has invested wisely in training a highly capable and productive labor force. Its growth has been spurted by the opening of the Indian Technical Institutes, a successful attempt to train a highly technical workforce and make the subcontinent an attractive location for businesses. These schools focused on developing specialized technical skills (IT, engineering, etc.), avoiding the liberal arts curricula prevalent in the American educational system. India enhanced its society by providing vocational training that made the labor force marketable to international companies and in doing so, created rapid economic growth that has led to a significant reduction in the poverty level of the country.

Another acute education concept from India was reported in the Wall Street Journal today. Automobile manufacturer Toyota Motor Corp, seeking to expand its market share in India, opened a school to provide vocational training for workers that it hopes to employ at the new manufacturing plant that it is building. It plans to give training in areas such as welding, auto assembly, maintenance, math, English, and Japanese. The school currently has 64 students, all of which are from poor rural farming families. Students at the school are grateful for the opportunity and have transferred some of the newly-acquired skills and principles back to their villages, a positive externality.

Rival auto manufacturer, Honda, has plans to open a similar technical college and other manufacturers in India have entered into partnerships with the Indian Technical Institutes to train future employees, a sign that the educational programs have been a success and that market forces can be very powerful. This is a great example of a market-based solution to increasing access to education and providing career opportunities. The U.S. is a service-based economy, with 70% of jobs categorized as a service sector. Indications are that future job growth will continue to be in this sector. Many of these jobs do not require a 4 year bachelor's degree, but will require some vocational training. As a nation, we could learn some valuable lessons from our Indian friends, especially before we send all of our high school graduates off to college and forgo vocational training in areas of need.