Saturday, September 26, 2009

Schools are for Fish!

I had a gentleman from India visit me recently – not a tech guy, but a scholarly type – and we began discussing the profound interdependence of the United States and India – the former supplying the graduate schools, a broad customer base and an environment where Indian engineers and entrepreneurs have been able to immigrate to the United States and found new, US-based technology companies that have actually created, contrary to popular belief based on large-scale “outsourcing,” millions of American jobs in leading-edge technologies – companies like Sun Microsystems or Momenta Pharmaceuticals Inc.,

According to the Boston Globe, “[L]egendary investor John Doerr , partner at the venture firm Kleiner Perkins Caufield & Byers, which has backed start - ups like Google and, suggested that 50 percent of the gains at Kleiner's portfolio companies were generated by [Indian born entrepreneurs].” According to, “Indian-born entrepreneurs were principal founders of 26 percent of immigrant-led Silicon Valley ventures, just overtaking Chinese and Taiwanese founders, who accounted for 24.4 percent of the total.” Yeah, Chinese and Indian émigrés are creating the “new values” for this country. Why did they come here? Why America? What did they see here that they did not have at home?

My friend and I bantered back and forth, noting that even though Indian English was a common thread among educated Indians, the lack of American cultural fluency pushed Indian émigrés into the universal languages of engineering and mathematics, where clearly they have excelled. This appears to be the case for Chinese-born entrepreneurs as well. He asked me what he thought was America’s greatest contribution to India might be. I noted that unlike England, which had been notorious as the oppressor-exploiter of India’s people and resources during a significant period of British rule over the Subcontinent, the United States may have taught Indians of every socio-economic level to dream.

He thought about that for a while and said simply, “You’re right.” Americans from any stratum of society have been taught to dream, that the “American Dream” is achievable by anyone with enough drive and ambition to do what it takes. We are risk-takers, out-of-the-box thinkers, and a heterogeneous society where ethnic diversity slams cultures together in this lettuce bowl/melting pot to create explosive new ideas and creative vectors.

The great equalizer for Americans has been general access to quality public education, from kindergarten to the highest reaches of post-graduate studies. But India and China are beginning to get it; their people are beginning to dream… dream that they can rise in their home countries, where clear and significant economic growth is projected for the foreseeable future… and perhaps that America’s seeming struggles make her a less attractive place to take their dreams.

So I am deeply saddened by the collapsing of American public educational standards, a fall that has been accelerated by this economic meltdown as states slash educational budgets because tax revenues have dried up and social safety nets need to catch and hold more people. We are losing the ability to dream as this great educational equalizer plunges in quality across the land, just as emerging nations are escalating the quality of their educational systems.

In simple business analysis, we are losing the ability to generate the revenues that better educational standards inevitably provide. Our children cannot earn as much as the current working generations, because they are not trained sufficiently to create the same economic values of earlier generations. Further, the U.S. is not even able to attract enough foreign-born engineers to make up for this deficiency. We used to have upward mobility, but that is unfortunately changing. With less money coming in, educational budgets for future generations will be impaired as this pattern cycles American values downwards.

But what’s even worse are the hard economic costs that are rising as a result of overcrowded and inferior schools that cannot retain students even through a paltry high school education. With public high school dropout rates in our ten largest cities above 50%, the concomitant long-term social costs are staggering. The September 24th Los Angeles Times summarized one study on the impact of such dropouts in California: “High school dropouts, who are more likely to commit crimes than their peers with diplomas, cost the state $1.1 billion annually in law enforcement and victim costs while still minors, according to a study [released on September 24th]…. The California Dropout Research Project at UC Santa Barbara found that cutting the dropout rate in half would prevent 30,000 juvenile crimes and save $550 million every year… [They also] previously studied the economic effect of not finishing high school and found that for each group of 20-year-olds who fail to complete high school (roughly 120,000 per year), the economic loss is $46.4 billion.”

Multiply these numbers across the entire United States, and you have over half a trillion plus dollars of hard dollar costs to this nation as a whole. Understand that these dropouts are likely to become parents to children with equally educational proclivities and you are looking at trillions of dollars of losses to the nation. In simplistic business analysis, with revenues going down and costs going up, at what point does America file bankruptcy?

I’m Peter Dekom, and I approve this message.

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