On jobs, Obama needs to be a radical

Bailouts for banks. Subsidies for chosen industries. Tax breaks for the rich.

These are some of the remedies that our government has used in its attempt to fix the economy and reduce unemployment. As we’ve seen, they don’t work. The President’s Council on Jobs and Competitiveness is now proposing that we increase the number of engineers that we graduate — a strategy driven by fear of a mythical engineer shortage.

Vivek Wadhwa

Vivek Wadhwa is Vice President of Innovation and Research at Singularity University and Arthur & Toni Rembe Rock Center for Corporate Governance at Stanford University. His other academic appointments include Harvard, Duke and Emory Universities as well as the University of California Berkeley.

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 The president announced a new initiative in high-tech manufacturing onFriday. The Advanced Manufacturing Partnership between the U.S. and advanced manufacturing corporations and foundations will entail a $500 million investment on the part of the U.S. government.

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It’s clear that we’re just grasping at straws. Meanwhile, globalization continues to wreak havoc on employment. Eventually, it is going to cause entire industries to disappear and force American workers to compete with their counterparts all over the world. The only way we can keep Americans fully employed and maintain our global lead is by constantly improving their productivity and skills.

In a bygone era, the skills you learned in school could carry you through your career. But today, lifelong learning is a necessity. Americans have to understand that education doesn’t end when they graduate from college. That is when it begins.

American companies must be provided with the incentives to invest in their workers as they used to. As recently as the 1970s, America’s most respected companies would make significant investments in workforce training. IBM, for example, took non-technical workers and taught them technical skills. They then trained these technicians to be computer programmers, sales reps, or product managers. New recruits received a year or more of training before they were expected to become productive.

Today, nearly all American companies, including IBM, expect new hires to be productive on day one. These employees are given a day or two of “orientation” at best. Companies routinely fire people whose skills are obsolete and hire replacements with the right skills to maximize quarterly revenue and profits. Employers often fear that if they spend too much on skill development, employees will become more marketable and leave.

This logic is based on false assumptions. Industry learned this lesson in one of the most unlikely places: India.

India learned that “workforce education” actually increases productivity, decreases turnover, and leads to greater economic growth.

In the late ’90s, India’s IT industry began to grow rapidly. The growth was in response to demand from Western companies to help them fix the Y2K software bug. But Indian industry faced a severe problem: It needed to hire hundreds of thousands of engineers— a far greater number than its engineering colleges could produce. In 1999, India graduated only 76,000 engineers, and most had received a low-quality education.

Indian industry was forced to rethink the way it recruited, trained, and developed its workforce. It started by adapting the best practices of Western companies that were outsourcing to India. Then it started improving on these techniques and methods. India’s top firms — in industries as diverse as IT, banking, and pharmaceuticals — built their own surrogate education system to train new recruits and retrain older workers.