Entrepreneurship Is the Solution to Higher Education — Not More College
“In order to stay competitive in the global economy, we have to make sure as many people as possible are educated to the greatest extent possible!”
“A college degree is the only way to get ahead in the 21st century!”
“Higher education must be a top priority going forward!”
These and similar tropes are popular among pundits, recruiters, higher education professionals and young people. The idea is intuitive — if the rest of the world is accelerating in its growth and advancements like the industrialized west, then it is more and more important to set yourself apart from the swaths of other young people joining the workforce with a formal education. While a basic secondary education may have gotten you by yesterday, post-secondary and graduate education is what will be necessary to set you apart tomorrow.
While intuitive, this solution gets the problem entirely wrong and will only exacerbate the talent and education crisis that employers and investors are seeing today.
The assumption behind this solution is that going to college and university is a human capital play made by young people to make them more valuable. They go to learn skills and gain knowledge that they can apply in the marketplace. Sure, along the way they may learn something about literature or art history that really makes them feel like they are becoming well-rounded, but the real assumption is that they’ll learn skills that are marketable to employers and others in the “real world.”
The problem is that this assumption gets the reason young people go to collegeentirely wrong. It assumes that they go to college as scruffy, starry eyed hunks of raw human capital yet to be molded into hard-working, skilled, ambitious people who can suddenly come out much more accelerated in their growth than when they entered.
THE DEGREE IS A SIGNAL, NOT MUCH MORE
The real reason most young people go to college and are pushed to go to college is because they feel like they have to go if they want a job. Some, mostly in highly technical fields like engineering and accounting (even law and medicine are mostly learned at the graduate level, not undergrad), pick up skills while in school, but most go because they are told that they need a degree to get a job. It’s a signaling play, not a human capital play.
You can see this with a simple thought experiment. If you went to a campus in the United States and asked a handful of students you found on campus if they would still go to college (and pay the huge price that comes with it) if their chances of finding a job upon graduation were unchanged, most would tell you no, they would probably not (and this is a really charitable reading of the college experience. If you removed most 18 year olds from the marketplace for four years while they picked up no concrete skills, experiences, or networks and instead fiddled away at underwater basket weaving of the pan-asian diaspora instead of working, their employability at 22 or 23 would likely be much lower than at 18).
They go to college because they feel like they have to. Parents, teachers, guidance counselors and other adults believe that human resources managers and recruiters won’t even look at them without degrees.
THE DEGREE IS A POOR SIGNAL
The paradox is that this pushes more and more young people to get a degree — a tool for setting themselves apart from others — which in turn devalues the power of the signal to employers. When at one time 10 in 100 applicants for a job had a degree, now 80 in 100 do. These 70 new people in the pool look like each other and aren’t any better off (and much poorer) than when they didn’t have the degree.
Earnings have not nearly tracked increases in cost of college for those pushed to attend.
By pushing young people to “stay competitive” in the world, we push them into a position where they have no choice but to continue on this hamster wheel. We’re already seeing the perverse consequences of this push for more and more credentialing. It’s not uncommon for entry-level jobs to require Master’s degrees when years ago they barely required a BA. Employers have been forced to up the entry requirement to filter out a spike in otherwise-unqualified applicants with BAs.
The thing is, “staying competitive” is overrated.
In any market, competition drives profits to zero in the long run. The labor market is no different.
If a young person today wants to set themselves apart, doing what the pack is being encouraged to do is exactly what they shouldn’t do.
There’s a better option for gaining skills, valuable experience, and really setting oneself apart for potential business partners, investors, and even employers and employees: entrepreneurship.
THE YOUNG ENTREPRENEUR: A DWINDLING SPECIES
Contrary to popular belief, we do not have a glut of new companies and entrepreneurship among America’s youth. The noise from the startup scene aside, relatively fewer young people today are becoming their own bosses and launching their own enterprises. The percentage of young people who own private stock is at a low of 3.6%, down from 10.6% in 1989, according to the Wall Street Journal.
There are a few factors that play into this, but one of the most disempowering is student loan debt. While formal higher education and launching a business aren’t mutually exclusive, it’s particularly hard to make the sacrifices needed to launch a business early on when a grad is juggling paying back tens of thousands of dollars on a loan. Lifestyle inflation that results from a heavily subsidized pre-career at college with a multimillion dollar sports complex, free food on Fridays in the quad, and a variety of free or low-cost entertainment opportunities also contributes.
APPRENTICESHIPS FOR THE 21ST CENTURY
Instead, a combination of high-discipline education and work experience serves a young person trying to set themselves apart best. They can combine the advantages of being educated in a variety of topics with the push given by the work-world to learn marketable skills. Rather than being insulated from the workforce for four years (on top of the twelve they spend as a youth), they can build their networks, learn new skills, and develop their own personal brand — all while receiving a quality education.
A revisiting of the apprenticeship model is one simple approach — entrepreneurs and business owners take promising young people under their wings and give them the opportunity to prove themselves. This not only provides the human capital benefits often spoken of in discussions about college (although rarely realized), but it can be done at a much lower cost to the young person by cutting out the bloated administrative costs and the federal subsidies system around higher education.
If our goal in discussions on education and career preparedness is to provide the best advice possible to promising young people, then continuing the “everybody who can go to college absolutely should in order to stay competitive” trope is one of the worst things we can do. Real discipline, skills, and education are better provided by marketplace actors who were forced to earn their wings than by those institutions that merely jump through accreditation hoops.
If you enjoyed this article or found it thought-provoking, please “Like” it so that others can find it! Zak left the University of Pennsylvania to cofound a companythat focuses on building apprenticeships for the 21st century. You can contact Zak at email@example.com and find more articles like this atwww.zakslayback.com