Higher ed and lower jobs: What's needed in the new economy

 It almost sounds like a Woody Allen joke. Most Americans say postsecondary education is just too expensive, according to a new Gallup poll. Yet more than 1 in 4 say the quality of higher education has become worse.

Here’s another incongruous “joke”: The US economy added only 4,000 manufacturing jobs last month. And yet manufacturing activity is rising at its highest rate in almost a year.

Not laughing yet? Try this one. The US has a record number of people with bachelor’s degrees. And yet more than a third of those who graduated from college in 2010 now hold jobs that require no more than a high school diploma. More than half of them are underemployed – and that’s three years after the end of the Great Recession.

Economists are scratching their heads over how to help people navigate education choices, a job market, and an economy that don’t fit many old patterns. One big problem is that economists like to measure things, and yet much of what is driving business in advanced countries is not easily measurable.

Growth is being driven in large part by “intangible capital.” This includes the quality of trust in business relationships, the level of freedom for people to innovate, and the ability of managers to best organize employees to utilize new technologies. Tangible capital, such as factories, highways, and energy supplies, still matter. But these have declined in importance, according to the World Bank, whose economists attempt to measure such assets. Invisible capital – often called human, organizational, or intellectual capital – now dominates the modern economy, whether it is in service-oriented businesses or high-tech manufacturing.

Unfortunately, higher education that focuses on delivering a specific set of skills or knowledge may not give graduates the broader ability to think critically, innovate, and adapt in a changing economy. Computer science grads who earn all A’s may land a job, but can they create cooperative, ethical teams of innovators that tap the ideas of customers, suppliers, and fellow employees, or will they even know how to cross-share patents with competitors?

That kind of high-level work relies on qualities of character as much as knowledge and skill. It relies on social capital as well as technical and financial capital.

That Gallup poll on the worth of higher ed, conducted for the Lumina Foundation, shows a hunger for advanced learning among Americans but a wariness of what colleges and universities currently offer. So much of what creates value in today’s economy comes from the ways in which groups of people organize their relationships in order to tap into ideas, technology, and natural resources.

Countries and students need to first develop the intangible qualities that drive a successful business rather than look mainly at physical assets or measurable knowledge. Many colleges and businesses already offer that sort of environment or training. Reviving the economy will require people tapping into those innovative institutions.