Category Archives: It’s the economy

What would my grandfather say?

That 28,077 universities are operating around the world speaks to how society has benefitted from them for over 4000 years. We continue to put our money into our belief that universities progress and contribute to our children’s future wellbeing. We go so far as to make sacrifices and incur debt so that our children might attend. So do grandparents.

But progress comes at a price. The new displaces the old, how we work and at what is transformed or replaced, there are winners and there are losers. The process never stops: if it did, I wouldn’t have been able to write this and you wouldn’t be reading it.

Technology is progress and we have to equip our children to adapt to it because we can’t stop it. Choosing the right education for the times will be a critical component of the choices we make, if we’re to believe what The New York Times published in ‘The Hidden Automation Agenda of the Davos Elite’ (please see below). Management plans to accelerate the automation that began in earnest on the shop floor and has now spread to offices and white-collar jobs that were once considered untouchable. The process dates from when the world’s first commercial computer was installed in the U.S. in 1951, and we’re living with the results.

Not all jobs being done by humans will be eliminated. Many are being upgraded and call for leading edge education and training and new ones are being created. But it will have to be the right education. The old ways are disappearing and jobs along with them. That could impact on 40% of all jobs within the next 15 years. In 15 years of working in transition counselling, I met face-to-face with 2133 people where they worked who were displaced because they couldn’t or wouldn’t adapt.

My grandfather’s generation lived through the Great Depression, World War II and Korea. It used its survival instincts to make it through. He would have argued that conditioning our children to expect that a good job will be waiting for them once they graduate has dulled those instincts. He would have likened higher education to fishing tackle. It isn’t the rod that catches the fish, it’s the fisherman. Choose the wrong bait, cast or troll in the wrong part of the lake at the wrong time of day and there’ll be no fish to fry come evening.

The worldwide pool of students from which employers will draw graduates will reach 262 million by 2025. Those who dangle the right degree in front of the right employer in the right place at the right time and persevere will land a job.

But are we teaching our children how to fish or how to read the lay of the land? In ‘The Prosperity Initiative’ (1991), the Government of Canada warned that:

“Canadians are asking what the future holds for themselves and their families. In a profoundly changing world, they know that traditional strategies are no longer enough to provide economic security and prosperity, and protect our environment. New approaches are needed to meet the challenges that confront us—challenges that threaten our ability to generate new jobs, our standard of living, and our social programs.”

It went on to say that we’d have to extend basic education from 13 years to 17 years by the year 2000 to cope with the world we’d be living in. In 2012, twenty years after that caveat and notwithstanding their degrees, as many as 300,000 graduates were working as unpaid interns in this country because “they couldn’t find work in their chosen field.” Despite the number of options open to them and the amount of time they had to weigh them, how did they manage to misread the labour market as badly as they did? What should they have known? Where should they have learned it? What had become of their survival instincts?

What follows is a snapshot of the lay of the land:

So is this from ‘Private education, A class apart’ (The Economist, Apr. 13th-19th):

“IF SPENDING IS a measure of what matters, then the people of the developing world place a high value on brains. While private spending on education has not budged in real terms in the rich world in the past ten years, in China and India it has more than doubled. The Chinese now spend 5% of household income on education and the Indians 4%, compared with 2.5% for the Americans and 1% for the Europeans. As a result, private schooling, tuition, vocational and tertiary education are booming in developing countries.”

Forbes reports that in the U.S., students are carrying US$1.5 trillion in outstanding loans. They and others describe the situation as a crisis. Bloomberg News reports that consumer insolvencies in Canada have risen to an 8-year high. This may not be the best time to invest in the wrong education.

This is the hand we’ve been dealt, and we’re not in Kansas anymore. Employers are building 21st century, Fourth Industrial Revolution workforces, not 20th century workforces.

There are life-altering decisions to be made. To help parents work their way through them is why Personal Due Diligence exists. Your first conversation with us will cost you nothing. Not calling could cost a great deal more.

That’s what my grandfather would have said.

The World Economic Forum, higher education and outcomes for our children

The World Economic Forum “engages the foremost political, business and other leaders of society to shape global, regional and industry agendas.” Its 2019 Annual Meeting took place in Davos from Jan. 22nd through Jan. 25th.

The WEF is to the world of business what Paris and Milan are to the world of fashion: not everything they present on the runway will appeal to everyone, but it will give us food for thought.

Our children should be thinking about it if they plan to spend 4 years and $46,764 CDN on a basic bachelor’s degree ($87,164 CDN with residence) so that they can compete successfully for work against graduates of the 28,077 universities in operation around the world today. There will be 262 million students enrolled in those universities by 2025.

Nor should we forget that there are over 7.7 billion of us on the planet and that not all great ideas come from university graduates. (Google “successful business people who didn’t graduate from university”.)

On Jan. 25th, The New York Times published ‘The Hidden Automation Agenda of the Davos Elite’ in which it said, “They’ll never admit it in public, but many of your bosses want machines to replace you as soon as possible.” That’s food for thought.

Lives are built on steady incomes. Bosses who plan to replace people with robots threaten those lives, and that threat isn’t confined to soon-to-be graduates. What qualifications will be in demand when our children graduate? How strong will that demand be? Where in the world will it be? How long will it last?

Do parents understand that only certain university degrees will qualify a graduate to compete for a position, but none guarantee that a position will be offered?

Education is serious business, serious enough that what organizations like the WEF publish should be considered carefully because of its long-term implications. Especially now given how the world is changing and how it will continue to change.

Most of what those organizations publish is free. But it’s not enough that it be free: it must also be correct and relevant because of what’s riding on it.

Showing parents and their children how to identify, access and interpret that information is why Personal Due Diligence exists.

F. Neil Morris
President & Founder
PERSONAL DUE DILIGENCE

info@personalduediligence.ca

The art of getting hired

Thinking in the language of the customer

Employers are customers and the customer is always right. But only 10% of applicants understand how employers think and today’s résumé rejection statistics prove it.

Parents expect to see a positive financial return on their investment in university for their children.1 Employers expect to see a return on their investment in hiring university graduates. Whether their child’s degree translates into a signed offer of employment in their chosen field or not will depend on whether the employer believes that their child will be a part of generating that return. Their children will be running a gauntlet of résumé screening applications that want to be spoken to in ‘Employer-ese’. Ninety percent of résumés don’t, including those submitted by newly minted graduates. Applicants who don’t survive the gauntlet aren’t invited to interviews.

Because of what’s on employers’ minds, the Royal Bank recently announced RBC Future Launch. It addresses the problem parents face if you’re contemplating sending their child to university, and there’s no escaping it. Clicking here2 will take you to the Future Launch home page. This is what you’ll see:

“Canada’s youth are set up to fail in the new economy. In fact, today’s generation is at risk of ending up poorer than their parents.1 Failing to close the gap in unemployment rates between Canadian youth and people of prime-working age would mean missing out on a nearly $30B lift to our economy.2 Young people deserve a chance, and that’s why we created Future Launch. If youth fail, we all fail.”

The next page (click here3) is entitled ‘Humans Wanted: How Canadian Youth Can Thrive in the Age of Disruption.’ It says, in part:

“In the coming decade, half of all jobs will be disrupted by technology and automation. Some will change dramatically. Others will disappear completely, replaced by jobs that are yet to be invented. We are living through an era of radical change, with the latest advancements in artificial intelligence and automation transforming the way we work,4 even in unexpected fields such as law and customer service.

“We discovered that the four million Canadian youth entering the workforce over the next decade are going to need a foundation of skills that sets them up for many different jobs and roles rather than a single career path. They will need a portfolio of human skills such as critical thinking, social perceptiveness, and complex problem solving to remain competitive and resilient in the labour market.

“We found that Canada is shifting from a jobs economy to a skills economy, and yet employers, educators and policy makers are not prepared. Here are four things you need to know about the coming skills revolution and the future of work:

Disruption Is Accelerating
F
lexibility Is the Future
Digital Literacy Is Essential
We Need to Prepare for the Future of Work”

It takes time and effort to learn how to appeal to a hiring manager. It pays off in a message that’s well received by the people who need to receive it. The process has to begin before irreversible, non-refundable post-secondary decisions are made.

“Jobs are evolving at the same pace as iPhone upgrades,” according to Andrew Petter, President and Vice-Chancellor of Simon Fraser University. The more graduates universities produce, the more we’re going to need.5

One day, we may all be able to send our children and ourselves to university purely for the love of learning. Until that day comes, we’ll have to find ways to decrease rejection rates by improving the way we prepare our children to leverage their education so that they can build the life they want to live.

That’s why I founded Personal Due Diligence.

 

F. Neil Morris
President

Personal Due Diligence

Everything old is new again, but with a twist

Twenty-five years ago, people in the know predicted that we would work at five different careers before we retired. They were short on specifics, but their model left no doubt that people would have to re-educate themselves to qualify for those new careers. They didn’t mention the part about bills to pay and mouths to feed.

The future they predicted is here, but with a twist. Twenty-five years ago, university was a lot more affordable than it is now. Incomes were more predictable and more secure. So were pensions.

The mounting cost of sending children to university is becoming more and more painful for more and more families. Which makes RBC Future Launch’s candor so refreshing and so necessary:

“Canada’s youth are set up to fail in the new economy. In fact, today’s generation is at risk of ending up poorer than their parents.1 Failing to close the gap in unemployment rates between Canadian youth and people of prime-working age would mean missing out on a nearly $30B lift to our economy.2 Young people deserve a chance, and that’s why we created Future Launch. If youth fail, we all fail.

 “In the coming decade, half of all jobs will be disrupted by technology and automation. Some will change dramatically. Others will disappear completely, replaced by jobs that are yet to be invented. We are living through an era of radical change, with the latest advancements in artificial intelligence and automation transforming the way we work, even in unexpected fields such as law and customer service.”

What RBC proposes is commendable. But its target market is university students and graduates who’ve already put their money down. Many of them may already have limited their employment and career options. They invested in a future relationship with an employer in a context called the labour market inside another context called an economy. They understood little or nothing about either.

What they chose to study was up to them. What the labour market and the economy will have to say about that will be up to someone else. We don’t teach our children that. RBC is proposing a cure to a problem that already exists. Kudos to them. But we need something concrete to prevent the problem in the first place. Personal Due Diligence is that something.

We’re told that the more graduates we produce, the more graduates we’re going to need. But parents and their children need to know where the jobs will be before their first tuition cheque comes due. Our governments are showing no signs of preparing lists with timetables of occupations that have been earmarked for disruption or obsolescence, let alone notes about how it’s going to happen and when. That’s something families will have to do on their own because once size does not fit all.

While we’re at it, we may want to pay special attention to what it’s costing financially, physically and emotionally to send our children there. ‘Hunger And Homelessness Are Widespread Among College Students, Study Finds’ is the title of a National Public Radio report about a survey done by Temple University in Philadelphia and the Wisconsin HOPE Lab in Madison.

We can’t hope our way to a solution. We have to build one. In an address on September 3, 2008, former New York Mayor Rudy Giuliani said, “Change is not a destination, just as hope is not a strategy.”

On January 23, 2009, CBS NEWS posted an open letter to President Barack Obama from Dr. Benjamin Ola Akande. Dr. Akande is an economist, scholar and Dean of the Business School at Webster University in St. Louis, Missouri. The title of his letter was ‘Hope Is Not A Strategy.’ You can find the full text by clicking here. This is an excerpt:

“Yet, the fact remains that hope will not reduce housing foreclosures. Hope does not stop a recession. Hope cannot create jobs. Hope will not prevent catastrophic failures of banks. Hope is not a strategy.”

Our youth must win so that we all can win. That’s why Personal Due Diligence exists.

Neil Morris
Founder & President
Personal Due Diligence

+1 905.273.9880
info@personalduediligence.ca

Riding madly off in all directions

If there are days when it feels like the world is riding madly off in all directions, it probably is. Change is the culprit and it’s never happened this fast or in so many places at the same time. Nothing in our experience has equipped us to deal with it.

Parents who are sending their children to university in the current economic and technological climate expect that when their children graduate, the jobs they’ll be applying for will be as traditional and as plentiful as they were in their parents’ day. They may be in for a surprise.

Employment relationships aren’t what they used to be. Corporate tastes in university degrees have changed. We have to factor that into how we think about the role higher education is going to play in the life of our children and what their options are going to be. Change is a fact of life for real companies and organizations with real names. Our kids need to know which companies and organizations they are or are likely to be.

We also have to bear in mind that the cost of tuition has risen 40% in the last 10 years. That will continue. Over 50% of all jobs are now precarious. Over half of those jobs will be automated in the next 10 years. That, too, will continue.

The links in what follows will take you to articles and reports about the current environment and how it will impact on your young people and those of people you know. They feature GE’s Jeff Immelt (#4), MIT’s Erik Brynjolfsson (#12), McGill’s Suzanne Fortier (#12) and Google’s Sergey Brin (#16), among others.

  1. September 1969 — The first node of ARPANET installed at UCLA
  2. August 12, 1981 — IBM introduces its first personal computer
  3. July 15, 2014 — Apple and IBM Forge Global Partnership to Transform Enterprise Mobility
  4. August 4, 2016 — LinkedIn interview with GE CEO Jeff Immelt: “Culture is not just apps. It’s a combination of people and technology. If you are joining the company in your 20s, unlike when I joined, you’re going to learn to code. It doesn’t matter whether you are in sales, finance or operations. You may not end up being a programmer, but you will know how to code. We are also changing the plumbing inside the company to connect everyone and make the culture change possible. This is existential and we’re committed to this.”
  5. September 2016 Deloitte survey “Transitioning to the Future of Work and the Workplace, Embracing Digital Culture, Tools, and Approaches”
  6. October 22, 2016 — Finance Minister Bill Morneau offered this advice at a Liberal Party gathering in Niagara-On-The-Lake: “Get used to the ‘job churn’ of short-term employment and career changes.”
  7. December 17, 2016 — Morneau’s advisory council on economic growth predicts that: Fully half of all jobs will be automated during the next decade, making massive retraining a social and economic necessity.”
  8. January 14, 2017 — “Innovation key to achieving Trudeau’s resourcefulness.’” In order to move Canada’s reputation away from resources to resourcefulness, PM must break the mould of linear thinking.
  9. January 12, 2017 — World Economic Forum report: “The jobless world and its discontents, How can we prepare for a future where drones, 3D printing and automation replace jobs?”
  10. January 14, 2017 — The Economist: “Lifelong learning, How to survive in the age of automation” (Cover story and Special Report)”
  11. January 16, 2017 —As Robots Take Jobs, Europeans Mull Free Money for Al
  12. January 19, 2017 — Davos 2017 – Issue Briefing: Jobs and the Fourth Industrial Revolution
  13. February 2017 — Maclean’s print edition: “When robots steal your job”, The real driver behind re-shoring is automation. Robotic jobs, not human ones, are coming back.
  14. February 2017 — Automa-nation: Will robots take your job? A new report suggests 42% of the Canadian job market is at risk.
  15. January 17, 2017 — IBM THINK Blog, IBM Cognitive Principles
  16. January 19, 2017 — World Economic Forum, Davos 2017: Google’s Sergey Brin on AI

We’re told that we’re in the midst of the Fourth Industrial Revolution. We may not know how the story ends, be we do know that it will probably involve some form of advanced education. Our children have to be prepared.

 

 

It’s not how much you spend on university. It’s how wisely

between friends


Rise of the ‘precariat
,’
the global scourge of precarious jobs

Barely one in four of the global workforce has a stable job, UN reports
– CBC News, World, June 1, 2015

Contract work is here to stay, says Bank of England governor
UK job market has changed permanently due to financial crisis, Mark Carney tells Treasury select committee
– The Guardian, November 25, 2014


In his Nov. 1, 2015, editorial ‘The 21st-Century Club’, Fortune editor Alan Murray said of the 13th Fortune Global Forum:

“We are now in the early stages of the third Industrial Revolution. New corporate behemoths like Google, Facebook and Uber are reaching Fortune 500 size at unprecedented speed. The century will belong to those who master this new model. Economic dynamism will matter more than sheer scale. The invitation-only CEO gathering (Nov. 2-4) will include leaders of many of the largest companies in the world and focus on the challenge of ‘Winning in the Disruptive Century'”. (You can view the agenda of the recently concluded event by clicking here.)

One of the advantages of living in the early 21st century is that all it takes to see how some of the most powerful corporations in the world are going to change the way we live and work is a few keystrokes. What the Forum attendees heard and discussed wasn’t ‘if’: it was when—and when is now.

Those companies will need the help of well-educated young minds and they’re not alone. They’ve declared their intentions publicly which means that the word is out on what kinds of schooling they’ll be looking for. Parents and children who plan to attend university have to read that word, understand it and act on it. We know the names of the people who are shaping the future and the names of the companies they head. The information they’re making available about what they’re thinking is free.

It’s not how much parents are spending on higher education that matters; it’s how wisely they’re spending it. It’s a lot cheaper to avoid making a mistake than it is to correct it. The two articles at the top of this page speak to the consequences. So does this story about the precariat by Joe Fiorito in today’s Toronto Star. How is someone who is just starting out supposed to repay student loans on irregular or inconsistent income? At what point will the rising cost of tuition put post-secondary education out of reach? What will the impact be on the universities themselves?

There’s a glut of degrees on the street. Jobs that used to call for a high school diploma now call for a degree but pay high school wages. Graduates are accepting them even though they aren’t full-time and employers don’t look gift horses in the mouth. Had graduates taken the time to scrutinize the labour market before they put their money down, they might not have run out of options.

We can’t blame all of this on graduates any more than we can blame all of it on universities or governments. But we can blame it on a changing employer-employee social contract that has already cost many parents their job. Why weren’t they and others paying attention?

The environment in which today’s jobs exist is as important as the jobs themselves. Free trade agreements are part of that environment. Compromises were built into every one of them. To get, we gave. And what we gave was often measured in jobs lost. Canada has entered into 44 of those agreements so far and concerns are being expressed about the Trans-Pacific Partnership, which has yet to be ratified. Politicians and businesspeople love to boast about how many new jobs the agreements they ink will create. What kind of jobs are they? Will they be permanent or precarious? What qualifications will they call for? How much will they pay?

In its Oct. 24th – 30th issue, The Economist published ‘Reinventing the company’. In its Nov. 1st issue, FORTUNE published ‘The 21st Century Corporation: Every aspect of your business is about to change’. This is what Geoff Colvin said in his lead-in:

“Imagine an economy without friction—a new world in which labor, information, and money move easily, cheaply, and almost instantly. Psst—it’s here. Is your company ready?”

Please be sure to read FORTUNE editor Alan Murray’s editorial ‘The 21st-Century Club’. It’s what the C-Suite is reading and it’s already here.

By no means does this apply to all lines of work or to all degrees or all post-secondary diplomas and certificates. But where it does, and if precarious employment is the outcome, how do we calculate the value of higher education? Or the cost? Is it the education, the way it’s chosen, or both?

Even if parents are prepared to borrow money to put their kids through college, someone is going to have to pay it back. In the States, 7 million have defaulted on their loans. The US$1.2 trillion owing isn’t the figment of someone’s imagination: it’s real. In Canada, the number is between C$25 billion and C$50 billion, and one family in 8 is shouldering the burden.

To see the numbers for yourself, go to Google Alerts and set it to deliver links to articles with the words “student debt” in them to your e-mail inbox once a day. You’ll average 10 per day, 7 days a week, 52 weeks a year. I have been since October 2012, and the problem isn’t confined to North America. To see what universities are doing to cope, research the Millennium Project at the University of Michigan.

The world isn’t going through a phase: it’s evolving. We’re experiencing an economic tectonic shift, a “third Industrial Revolution” as FORTUNE puts it. If you want to see what the World Economic Forum’s Global Competitiveness Report 2014 – 2015 says about how Canada is faring, click here.

The United Negro College Fund has been reminding us for years that: “A mind is a terrible thing to waste”. So is a university. If we continue to waste either or both, we’ll have no one to blame for the consequences but ourselves.