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The future of work: don’t fear the robots, embrace them

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One of the things of being an economist teaching at a university is that parents inevitably think you have a lot of insight about the future of the job market. What is the ‘safest’ programme, parents typically ask, that will guarantee Ryan or Samantha a well-paying job at the end of three years? Translated: How do I maximize the return on my investment?

As with any investment, there are risks. Not all university students graduate; a recent study on higher education pass-through rates – by Stellenbosch University’s Research in Social and Economic Policy (ReSEP)-unit – shows that less than 40% of South African students attain their degree within four years of starting (remember, most degrees are three-year programmes). Only 58% of students complete their degree within 6 years. (The numbers are particularly low at UNISA, a distance-learning university, where only 28% of students complete their degree within six years.) There is a good chance Ryan never completes his degree in the first place, leaving only debt, psychological scars and forgone income in the labour market behind. The researchers also find that, while matric marks are strongly correlated with access to university, they matter less for university success. Samantha may have been a bright spark in school, but that is no guarantee that she will be successful at university.

But what worries most parents about their investment is not so much the internal factors that lead to success (like getting Ryan to attend class, one of the most important determinants of success), but the external threats that may affect his chances of finding a job. The biggest culprit nowadays: robots.

The threat of robots is everywhere, it seems. Autonomous vehicles will soon substitute the most ubiquitous job of the twentieth century – taxi and truck drivers. Blue-collar jobs are first in the firing line, from farm labourers replaced by GPS-coordinated harvesters to postal workers replaced by, well, e-mail. But white collar work – which is often the domain of university graduates – will be soon to follow: lawyers, accountants, and middle-management, to name a few that have been singled out. Basically any job with repetitive tasks run the risk of robotification.

Parents are eager to know which job types are most likely to succumb to the robot overlords. If lawyers are of no use in the future, why study law? This is, of course, a reasonable concern. Several of the standard activities undertaken by lawyers are repetitive, easily-automatable. And artificial intelligence challenges even non-repetitive work: it allows software to search through large volumes of legal texts at a fraction of the time a paralegal would during the ‘discovery’ phase of a case. Not so fast, says Tim Bessen, an economist at the Boston University School of Law. He shows that, in the period that this software has spread through the US, the number of paralegals have increased by 1.1% per year. Because the costs of undertaking these ‘discovery’ services have fallen dramatically as a result of the new technology, the frequency of such services have increased even more, requiring more paralegals, not fewer.

It is not only that robots substitute existing repetitive work, it is that they can do it so much better. Although robots and their algorithms are not entirely objective – because algorithms adjust to human behaviour, they can often reinforce our prejudices – their biases tend to be more transparent and corrigible. A new NBER study shows just how robots could transform one of the oldest human professions – the judge – and in so doing realise huge societal benefits. The five authors, three computer scientists and two economists, want to know the following: can US judges’ decisions be improved by using a machine learning algorithm?

Every year, more than 10 million Americans are arrested. Soon after arrest, a judge must decide where defendants will await trail – at home or in jail. By law, judges should base their decision on the probability of the defendant fleeing or committing another murder. Whether the defendant is guilty or not should not enter this decision.

To investigate whether judges make fair decisions, the authors train a face recognition algorithm on a dataset of 758 027 defendants in New York City. They have detailed information about these defendants: whether they were released, whether they committed new crimes, etc. They then construct an algorithm to process the same information a judge would have at their disposal, and the algorithm then provides a prediction of the crime risk associated with each defendant.

Comparing their results to those of the judges, they find that an algorithm can have large welfare gains: a ‘policy simulation shows crime can be reduced by up to 24.8% with no change in jailing rates, or jail populations can be reduced by 42.0% with no increase in crime rates’. All categories of crime, including violent crimes, decline. The percentage of African-Americans and Hispanics in jail also fall significantly.

Will robots replace judges? Probably not – but the quality of judges’ decisions can be improved significantly by using robots. This will be true in most other skilled professions too, from law to management to academic economists like me.

Matriculants on the cusp of their careers (and their anxious investor-parents) have no reason to fear the coming of the robots. If Ryan and Samantha, regardless of their field-of-study, see them as complements – by learning their language, and how to collaborate with them – the benefits, for themselves and society-at-large, will be greater than the costs.

*An edited version of this first appeared in Finweek magazine of 4 May.

Written by Johan Fourie

May 26, 2017 at 09:33

Again: What to study in South Africa

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Big shots: Joseph Stiglitz, Jeffrey Sachs and Edward Glaeser, amongst others, were at the ASSA meetings in San Francisco

Big shots: Joseph Stiglitz, Jeffrey Sachs and Edward Glaeser, amongst others, were at the ASSA meetings in San Francisco

My most popular post on this blog – by far! – remains the Why and what to study in South Africa entry I wrote in May 2013. My advice was pretty simple: if you can do math, study a degree where you will develop your math skills further. Math and statistics, combined with economics, computer science and/or engineering sciences, will make you an incredibly desirable employee: both in South Africa and abroad.

I was reminded of this advice when I attended the world’s largest gathering of economists last week in San Francisco. The ASSA meetings spanned three days, had more than 500 sessions with more than 12 000 participants. I presented a paper with Dieter von Fintel (on persistence and reversal of fortune) in a session on apartheid – with excellent papers by Johannes Norling (on fertility), Dan de Kadt and Melissa Sands (on voting), and Martine Mariotti and Taryn Dinkelman (on remittances and migration). And there were many other excellent sessions: notable ones I attended was a session on long-run inequality (with a very entertaining Philippe Aghion), a session on writing books (see photo), and a session on early childhood development (where Melissa Kearney presented a paper I reported on here).

But what reminded me about my math advice was a discussion during one session about the need to diversify academia. One commentator mentioned that the reason for the slow diversification of economics faculty is the high level of mathematics required to do a PhD in Economics in the US. (The slow transformation was quite apparent at the conference: the vast majority of attendees were white males.) Much like in South Africa, black students in the US would often opt out of math courses because of poor grades or a bad experience at school. They are thus more likely to end up in the humanities and less likely to study more ‘mathy’ degrees, like economics.

Yet, there is an increasing realisation that the current state of affairs – the white, male bias – is neither fair nor sustainable. Harvard’s chair of the Economics department, David Laibson, confirmed this: he was quite explicit that Harvard will focus on hiring more diverse staff during his tenure. This is likely to increase the demand for female and black economists (and engineers, scientists, actuaries, statisticians) significantly in the foreseeable future. But to suspect that the market will automatically adjust – that the higher demand will induce more black students to study economics – is unlikely. That is why there are several programmes in the US to inform high school students of the possibilities that economics can offer, showing them the wide applicability of economics in their daily lives. (Economists, for example, study how Discovery Vitality can get their members to live healthier lives, they study how to make things like Uber and Airbnb more efficient, they study what’s wrong with the school system and how to improve it, they study how firms compete and grow, they study the minimum wage and its impact and, yes, they also study financial markets and the banking system. Just watch this video).

Economics departments in South Africa are certainly not doing enough to promote the field to young scholars. Prospective students have a very narrow view of what an economist does, if they have a view at all. I know I never thought much about Economics before I arrived in my Economics 1 class. But the truth is that there is a massive demand for good economists, both in South Africa and, as I witnessed for myself in San Francisco, abroad. South Africa’s services industry needs far more graduates with strong mathematical or statistical backgrounds; the industries of the future will require the analyses and interpretation of (big) data, skills for which economists are well-equipped.

So, what should you study? This is an incredibly tough decision to make at a young age, and it almost certainly will have a big impact on the quality of your life. But here goes: if you have the ability, you can narrow the risk that your choice will turn out to be a bad one by developing your math and stats capabilities. And if you really want to enjoy what you’re doing (yes, I’m biased), combine it with Economics.

Written by Johan Fourie

January 13, 2016 at 19:00

More math and science, please

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Princeton University professor Leonard Wantchekon was the keynote at the African Economic History Workshop in Wageningen, the Netherlands

Princeton University professor Leonard Wantchekon was the keynote at the African Economic History Workshop in Wageningen, the Netherlands (31 October 2015)

I had the good fortune last week of meeting Leonard Wantchekon, Professor of Economics at Princeton University. His is an incredible story: student protester in Benin, sent to prison, tortured, escaped, fled to Canada, shifted from math to economics, and moved up the ranks to be professor at an Ivy League university.

But apart from these gripping experiences, he noted how important the study of mathematics was in his life, and still is for many students in Benin, a country ranked 167th poorest out of 187 countries in the world. That is why six of the top ten mathematicians in Africa are from Benin (his fact), and why he has opened the African School of Economics in the country.

This got me thinking about a topic I’ve written on before: what do the best and brightest South African high school matriculants choose to study? Of course, their choice is influenced by a multitude of factors. Parents have certain expectations, friends weight in, teachers have their say and there are often financial realities at play. They see adverts for different occupations in newspapers and online, they watch series which portray romanticized images of certain careers, and they dream about working with people, or with animals, or ‘not-in-an-office’. (If I had a Rand for every time a student told me that they just don’t want to work in an office… and these are Commerce students. Buddy, you’ll plead for an office after you’ve spent a few years in a cubicle!)

But a new paper by Biniam Bedasso of ERSA suggests that there are other factors, too, which shape our behaviour. Your science teacher is one. The most significant determinant of choosing a major at the University of Cape Town, according to Bedasso, is the number of science courses an applicant took in high school. The more science courses you take, the more likely you are to choose high-earning degrees like Engineering. Not all schools, however, are equally endowed with good science teachers, which means that inequalities at school translate into inequalities at university: black students who are more likely to go to schools with no science teachers are more likely to end up choosing degrees in the Arts and Humanities, for example.

Peer pressure is another factor that influences degree choice. Using enrollment at UCT between 2010 and 2013, Bedasso finds that if your friends choose a Humanities degree, you are 10% more likely than someone with your exact same characteristics that live elsewhere to also choose a Humanities degree. In his words:

Neighbourhood effects shape the choice of individuals through the influence of near-peer role models. Correcting for possible clustering of unobserved preferences along postcodes, a one standard deviation increase in the ratio of near-peers who were admitted to a certain faculty during the last three years is shown to increase the probability of choosing the same faculty by around 10 percent.

He also finds, interestingly, that politics matter. Black South African matriculants are more likely to choose Commerce or Arts degrees, instead of Engineering or Science, if they live in a neighbourhood that is governed by the ANC. It’s difficult to think why this would be: perhaps this confirms the old adage that it is not what you know but who you know. In economics-speak: social capital trumps human capital.

As we would expect, the quality of high school attended also matters. Says Bedasso: “High-achieving applicants who come from less competitive high schools tend to choose high-return majors than similar students from more competitive high schools.” So, if you’re from a poor school but do very well, you are more likely to study Math and Science than if you do equally well in a good school.

Surprisingly, whites weigh expected earnings more heavily in their choice of degree: “White applicants are more responsive to differentials in aptitude-adjusted expected earnings than black applicants.” In other words, whites are more likely to switch to a degree where they can earn a higher salary.

Bedasso thinks these results have profound implications for South Africa:

The gravitation of the children of the political elites towards less technical majors may deprive the political class of sufficient interest in productive activities. This, in turn, is likely to leave the elites with little incentives to respect property rights in the future. Hence, policy measures that will improve the availability of science education at high school level or account for the effect of near-peer role models in college admissions may go a long way in terms of shaping the path of economic development.

I think this is stretching the results, and would be more optimistic. Successful businesses require more than just breakthrough innovations; many of our top accountants and business students end up running technology companies because they know that running a business is not an algorithm to be programmed for success. As a new wave of young, successful black South African entrepreneurs strut their stuff in the business world and the barriers to entrepreneurial and managerial success appear less daunting, the attractiveness of a political career (and academic) will seem less appealing. This young generation, I would argue, is unlikely to cede property rights.

That being said, the need to promote math and science at schools remains imperative. We need more scientists, mathematicians, engineers, and computer programmers to remain competitive in the knowledge economy. We should start by appointing more and better math and science teachers, as Bedasso’s evidence suggests. It would also help if parents support their children to choose these (tougher) subjects. And if friends encourage each other.

I don’t know how to incentivize this change in behaviour. What I do know is that math and science can open doors that, if they remain locked, bar entry to a better life. Just ask a former prisoner from Benin.

Written by Johan Fourie

November 5, 2015 at 08:26

University fees: The impossible trinity of higher education

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Revolutionary actions at UCT taking its toll: Image tweeted this morning by RhodesMustFall

Revolutions at UCT taking its toll: Image tweeted this morning by RhodesMustFall

A few months ago, I had one of the most gratifying experiences of my academic career, as a member of an appointment committee at Stellenbosch University. We had two candidates for a tenure-track position in economic history within the Department of Economics. Both were  Masters students within our department, but the quality of the interviews would have suggested otherwise: the candidates were clearly passionate, eloquent and thoughtful in their answers.  I remember thinking afterwards of the story of Paul Samuelson’s dissertation defense at Harvard, when one member of the committee, the great Joseph Schumpeter turned to another member, Nobel Laureate Wassily Leontief, and asked, ‘Well, Wassily, do you think we have passed?’. And it’s true: the questions both candidates asked of us were often more grueling than what we asked them.

The point is, if we had the resources, there was no reason not to appoint both. In fact, that was the recommendation of several members of the appointment committee.

But we couldn’t. Because of something called the Budget Constraint.

This week, on campuses across South Africa, students will continue their protest against higher tuition fees. Classes at Wits University were called off for several days last week as students demanded that a fee increase of 10.5% for next year be rescinded. Similar protests are happening as I write his at UCT and Rhodes and Stellenbosch in the face of similar increases.

In some of the comments I’ve read, the increases are seen as a sinister way to exclude poor students, almost all black, from South Africa’s elite universities. (This is happening at other universities too: Fort Hare has proposed an increase in registration fees of 42% and an increase in tuition fees of 15%. As I write here, there are other serious issues at Fort Hare too.) But this sinister explanation is simply not true: universities are desperate to attract the best talent and ensure their success. What students often don’t know is that a university forgoes its government subsidy when a student fails, which covers about two-thirds of the total cost. Failure is expensive, both for the student and the university.

But it is also true that a 10.5% hike is close to double inflation. And attending university is already incredibly expensive. By my estimates, at least 95% of South Africans cannot afford to spend R100 000 a year to send their kids to varsity (which would include tuition fees, accommodation, textbooks, and spending money). To give some context, only 4% of South African households earn R500 000 per year or more. Most students need a loan, as I did and almost all of my friends. But we were the lucky ones. Many students’ parents simply don’t have the collateral to get loans. Some parents saved throughout their adult lives, forgoing many things to give their kids the opportunity of a better life. Here’s a story of one of our students:

My dad always reminiscences on the poverty of the 70s in KZN, when my grandfather couldn’t get a job in Johannesburg. My grandfather would sell one of his cows, so that all the children would at least have a pencil to write with and a book to write in. This meant that there was never any money left over for shoes. Dad always talks about the frost bites in winter and how he couldn’t feel his toes on his way to school. But, all he knew was that he had to get to school .

From those harsh experiences, my parents have instilled in us a deep sense of love, respect and appreciation for education. At some point my sister and I were both at Wits and UCT respectively and my parents definitely felt the financial burden to get us through school. It wasn’t easy, but all they knew was that they had to get us through varsity. We thank God that they could. I know that a 10.5% increase in fees would have compromised their ability to get us through school. Some of my friends were not so fortunate. I’ve seen many friends and colleagues being financially excluded in the middle of their degrees.

The #witsfeesmustfall campaign is legitimate. For some a degree is just a paper, yet for another that degree is a ticket out of poverty.

So how should universities balance fee increases with the need to grow their talent pools, specifically of black staff? There are only three other alternatives: 1) cut budget items elsewhere, 2) raise income from third party sources, or 3) greater transfers from national government.

The first is dangerous. The first item on any budget – for a university, but also for a country or a household – that is usually slashed in the face of pressure is new infrastructure and maintenance of existing infrastructure. Consider this: when your monthly salary suddenly falls, what will you cut first? Probably the new tires for your car. You can always do that next year, right? Governments do the same: we can always build that power plant next year, or skip the maintenance on those roads for when we have a bigger budget. Many campuses across South Africa already struggle with dilapidated facilities. Infrastructure construction has not kept pace with student enrollment, meaning that students often have to sit on the floor in lectures. The point is: there is very little scope in university budgets for further fiscal restraint.

Raising third-stream incomes is a better alternative. But this type of income is often a consequence rather than a cause of excellence. Only the top universities will be able to attract third-stream incomes, either from donors or in collaboration with the private sector. Donor money is also incredibly contingent: donors want to add their names to new buildings, or see their donations spent on sport teams, or pay for bursaries. Few want to donate money to pay salaries. Third-stream incomes through collaborations with the private sector can provide additional capacity in some industries – like engineering – but even here the effect on the total budget is limited.

The only alternative is to increase government funding, which in South Africa lags behind what other countries spend on tertiary education. Here is Belinda Bozzoli earlier this year in the Financial Mail:

The fundamental problem is that the anchor of it all, the government subsidy, is low in absolute terms, by world standards. SA university funding languishes at levels below those of dozens of emerging economies. At a mere 0,6% of GDP it is dwarfed by the levels in Saudi Arabia (2,3%), Russia (1,8%), Argentina (1,4%) and India (1,3%). Furthermore, SA’s expenditure on higher education is a mere 12% of expenditure on education as a whole, whereas for the rest of Africa it is 20%, for OECD countries it is a massive 23,4%, and for the rest of the world it is 19,8%.

To make it worse, the core subsidy for universities has consistently fallen in real terms in relation to student numbers, which have, in turn, risen dramatically. This has skewed the entire model. The fall began under apartheid, when many free-thinking universities were regarded with suspicion, and continued apace under the ANC, which continues to choose to place nearly all of its education funding into schools.

Given the difficult environment Minister Nhlanhla Nene will face this week in his Medium Term Budget Policy Statement, with growth slowing, tax income falling, and few prospects of a reversal, a sudden increase in higher education funding is unlikely.

So what to do? As Dan de Kadt, a PhD student in Political Science at MIT remarked on Facebook this week, universities face a new impossible trinity: appoint more black scholars, reduce student fees, or cut costs through outsourcing and maintenance on facilities. An impossible trinity means that you can only have two of the three: so, which two will it be? That is why university management is such a difficult task: there has been protests on campuses against all three issues this year, and I’ve seen a poster on Twitter this morning demanding all three. This is like asking for healthy food, a lot of food and cheap food, all at the same time. It is an impossible trinity. You can always only have two of the three. (I know which two I chose as a student.)

The Budget Constraint is a reality that we cannot wish away. We can label it elitist, racist, capitalist, colonialist, and neoliberal, but it won’t disappear, not for a university, not for a country (as Minister Nene will try and convince parliament this week) and also not at the household level. The Budget Constraint is the reason poor families struggle to afford sending their kids to university. We have to find solutions within the Budget Constraint.

So what is the solution? I don’t think we can afford to relax spending on maintenance while running university facilities into the ground. (If we do, we also lose the ability to collect third-stream incomes, which further exacerbate the problems.) There is a trade-off between hiring more black academics (i.e. transforming faster) and lowering student fees. My preference is for the first, because I think we can think more creatively about the second.

I would argue for better targeted support for poorer students, instead of a blanket reduction in student fees. Here is my colleague, Eldridge Moses, on the topic:

Would bursaries and other forms of economic alleviation instruments not be more targeted interventions than the blunt instrument of blanket fee reductions or freezes? I would strongly suggest more progressive thinking on inequality reduction. A blanket freeze on fees benefits the rich way more than it does the poor due to access issues.

Eldridge is correct. Reducing student fees will benefit the wealthy more than poorer students because tertiary education is more accessible to the rich. So I would take a different approach and increase student fees by 25%. Yes, you read that right: 25%! Then I would use the additional 15% income from these fee increases to provide bursaries for students that come from poor backgrounds. A multi-tier or sliding scale system – where, for example, those with parents earning above R500 000 per annum pay R150 000, and those earning less than R50 000 pay R15 000 – is a far more equitable option than scrapping fee increases for all. And there will be additional funds to appoint black staff.

The sad reality is that the pressure to have a blanket fee reduction for all students will not only benefit wealthy students more than poor students, but it will inhibit universities’ ability to appoint excellent, young black scholars. In the job interview I took part in a few months ago, both candidates were female, black South Africans. Due to the Budget Constraint, however, we could appoint only one. The other candidate, equally brilliant, had a grandfather who struggled to get a job in Johannesburg and therefore had to sell his most prized possession to give his children, and grandchildren, the education they deserve.

I say: Let’s get a better fee system, and appoint his granddaughter.

Written by Johan Fourie

October 19, 2015 at 09:19

Why you should study Economics (at Stellenbosch)

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Stellenbosch

The applications for Honours or Masters degrees in Economics at Stellenbosch University have just opened. Early next year, about 80 or so students will arrive for the quantitative boot camps which kick off the year. The Honours students will get their first taste of graduate studies. And let me be honest: it is tough. Core modules like macroeconomics, microeconomics, econometrics and mathematical economics make the first semester a long and arduous affair. And then there are several electives to choose from, including international trade, development economics and economic history (where you’ll find me). The second semester has more choice but is no less rigorous: labour economics, industrial organization, public economics, environmental economics, the economics of education, the economics of technology, institutional economics and more.

These modules reflect the primary reason why I think studying Economics is worth the effort: it provides graduates with a set of analytical tools which allow them to make meaningful contributions in many spheres of society. For some, the immense inequality and high levels of unemployment that we witness in South Africa draw them to the field, eager to find solutions. Economists want to make the world a better place, and hope to use their rigorous methods to do so. Whether it is in education policy, or health policy, or trade and industrial policydevelopment policy, or competition policy, or monetary policy, economists at Stellenbosch apply the methods they learn to real-world evidence and make suggestions on how to improve society. That, I would argue, is real job satisfaction.

Some want to use the analytical tools of economics to, well, make money. They use the analytical tools of economics to start innovative companies like Custos Media Technologies, a company co-founded by a recent Masters graduate in Economics that hopes to reduce internet piracy. Others become business strategists of large corporations: Michael Jordaan, former CEO of First National Bank, and Jannie Mouton, founder and CEO of the PSG Group, have degrees in Economics from Stellenbosch.

Almost all of our graduate students find work immediately. Salaries for economists in South Africa and abroad compare very well with other professional occupations. This is why consultancies like KPMG, PwC and Bain are beginning to recruit economics graduates in larger numbers. In earlier years, our best students would have found a place within the public sector, most likely Treasury or the Reserve Bank. Now, although they’re still head-hunted by government, our best prefer the top dollar of the consultancies. In addition, there are many smaller economic consultancies that employ former students: Econex (based in Stellenbosch), Genesis Analytics (who sponsors an annual graduate prize) and NKC (now owned by Oxford Economics), to name a few.

I think graduate students from Stellenbosch are particularly attractive in the job market because of the exposure they get to quality graduate training. Graduate lecturers are generally young and almost have studied abroad for an extended period of time. As all classes are taught in English only, classrooms are also diverse. About half the students that enrol for Honours obtained their undergraduate degrees from Stellenbosch; the other half join from universities in other Southern African countries (approx. 20%) and from European countries like Germany.

Most Honours students continue into the Masters degree programme. Thanks to better funding, it is increasingly likely that the best Masters students, after perhaps spending a year abroad, return to begin a PhD. The skills they gain here make them exceptionally well qualified for research and academic jobs, in South Africa and internationally.

Alfred Marshall said that Economics is the study of people in the ordinary business of life. I cannot agree more. I also liked this summary: Studying economics will develop habits of careful thought, the application of mathematics, and practice in clear writing. Economists engage the world of current affairs. Studying economics includes learning to use statistics and to read critically. Economics graduates are interesting people both because of their skills and because they can explain why economic phenomena occur and how economic performance might improve.

So, if you are a final-year undergraduate undecided about what to do next year, why not make a great decision and enroll for an Honours at Stellenbosch? Or, if you’re currently doing an Honours somewhere else in South Africa, why not consider Stellenbosch for a Masters degree in 2016? To put it in language you might understand: the marginal returns of studying Economics at Stellenbosch, in monetary and non-monetary terms, are exceptional.

*If you want more info on Economics at Stellenbosch (including funding information), visit the Department’s website here. If you want more information on Economics in general, visit the AEA website.

**I am often asked how to best prepare yourself for an Honours degree in Economics. I would suggest that you, aside from doing third-year economics of course, also enroll for good courses in statistics and mathematics (at least up until the second-year level). And if you have more undergraduate time, do history and philosophy too. Here are some other random thoughts on what to study.

This is how to build a world-class African university

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Graduation

Rhodes will fall today. After several weeks of protest, the Council of the University of Cape Town ratified the decision to temporarily move the statue of Cecil John Rhodes from its central position on campus. The removal is a victory for the #RhodesMustFall campaign, which has, despite the attempts of some groups to score cheap political points, continued to insist that the aim is to fight institutionalized racism and a colonial heritage that marginalizes black South Africans. Listening to SRC chairperson Ramabina Mahapa, I find that I agree with many of his sentiments: Why must we have Latin music at South African graduation ceremonies? Why not African drums? Why must Jameson Hall only have paintings of white men? Why can’t African universities feel more African?

One further aim of the #RhodesMustFall campaign is to demand positions for more black academics at South African universities. And a curriculum that is not so Eurocentric.

It’s of course much easier to change a hall of paintings or a graduation procession than to change the demographic make-up of university staff. But because it is difficult doesn’t make it less important. Now that Rhodes has fallen, let’s consider how to change the racial profile of our top universities. I’ll focus on the challenges at UCT and Stellenbosch, which I consider as the two best universities in South Africa. The Times Higher Education World University Rankings list both of them in the top 300 universities globally. And because I understand the context, I will also focus on my own field – Economics.

Let’s be clear: there is no easy way to resolve the issue. There is no reservoir of unemployed black professors in South Africa. Take Economics. The best and brightest black talent we graduate find incredibly lucrative offers in banks and financial institutions (Nedbank, Allan Gray), consultancies (KPMG, Bain, Genesis), or government (national and provincial treasuries, or the Reserve Bank). These jobs are often in the metropolitan areas of Gauteng that are more appealing (and more affordable) for young black graduates to live, than sleepy Stellenbosch or quiet Cape Town. From the student’s perspective the pull-factors are strong.

The main task of universities is to do ground-breaking research that can make a fundamental difference to how we understand the world and interact with it. One way to judge which universities are the best at this is to consider the objective rankings that are published annually (there are now three global rankings that are generally considered the norm, including a Chinese one). The way you improve in these rankings is to improve the quality of your research, i.e. the scholars at your institution must undertake research that can be published in top international journals. The best way to access these top journals is to spend some time in America, because US universities remain at the frontier of science. China understands this. Every year, China sends 250 000 of their best students to study at US universities. (Chinese students make up 31% of all international students in the US.)

It is only slightly ironic that during the same week of the Rhodes protests at UCT, Rhodes House in Oxford announced a new deal with the Chinese government to extent the Rhodes scholarships to Chinese students. (This was apparently on request of the Chinese after discussions of 18 months.) If our universities are to improve their international rankings, we need to appoint scholars with experience of studying in the US (and, to some extent, Europe and Australia). That is why in the Economics Departments of UCT and Pretoria you will find a large contingent of foreign scholars. They bring expertise which not only improve the research quality of their institution, but also introduce their students to techniques and networks (and funding) that are world class. Can we really improve as a discipline if we remain isolated from the rest of the world, teaching the next generation the obsolete science of the past? No. As The Economist wrote two weeks ago, the world is going to university. If we are to deliver students that can compete on an equal footing with the rest of the world, our universities should appoint and promote those that work at the frontier of science.

This, in my opinion, suggests that we have to ask a different question. Instead of attempting to find answers to how we can employ more black scholars, we should be asking how can we ensure that our brightest black students attain the qualifications and experience to become world-class researchers. The latter question seems to have more clear-cut answers: we need to follow the Chinese example. A large scholarship programme for black South Africans to study at US universities will allow our students access to the best minds in the world. (If we want the same proportion as the Chinese, we should be sending 12500 students annually!)  Even Robert Mugabe understands this. He has a scholarship programme for the best Zimbabwean students to study at South African universities.

Imagine 12500 black students returning every year with a degree from a top US university! Most of them will find well-paying jobs in the private sector or government, where they will contribute to the economy by creating jobs or better policies. (Here’s another interesting fact: Iran has more US-graduated PhDs in its cabinet than the US Congress.) But a small minority of these returning students, perhaps only 50, will want an academic job because of the great lifestyle and the fulfillment that comes from scientific breakthroughs.

And, you know what, universities country-wide will fall over their feet to appoint these graduates. Because that, they will know, is how you build a world-class African university.

Written by Johan Fourie

April 9, 2015 at 08:47

What can you do with only matric?

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ClassicRobot

Of the 1 252 071 South African students who entered Grade 1 in 2003, only 150 752 (or 12%) matriculated with access to a Bachelors degree at university. That single statistic encapsulates the sad reality of the South African education system. Even worse, a large proportion of the 12% won’t ever make it to university, either because they have alternative plans or, more likely, because they cannot afford it. Those who make a success of their university education will go on to find well-paying jobs; those without access (or who fail) will have to compete with the 88% remaining 18-year old’s for a job in a country with a broad unemployment rate of close to 40%. The severe income inequality in South Africa today is perpetuated by the inequality of our education system.

In addition, fewer unskilled and semi-skilled jobs are being created. Mechanisation and computerisation mean that robots are increasingly doing the jobs of unskilled workers; walk into a motor vehicle assembly plant, or visit a maize farm, or go to a supermarket in a developed country and you can easily see how robots and machines are replacing human labour. I even get phone calls from electronic telemarketers (surely, those can’t be successful?). So, given the large supply of unskilled labour in South Africa and the dearth of demand for such workers, what can those matriculants without access to university do?

A lot. Although there are many jobs that are becoming redundant because machines can perform them better, technological innovation can also be complimentary to unskilled labour, i.e. robots can also create jobs for poor people. In contrast to the first phase of industrialisation – when poor, unskilled (blue collar) workers worked on farms or in mines and (manu)factories and rich, skilled (white collar) workers had cosy desk jobs in the services industries like banking and insurance – the trend is reversing: the highest paying jobs are now building and programming the robots who do all the farming and mining and manufacturing, while poorer, less-qualified workers work in the services industries. Yes, some service industries, like lawyers and accountants and dentists, are still incredibly well paid, but other service industries that provide work for unskilled labourers are also flourishing.

Consider cellphone repair shops in townships. A decade ago, only fixed-line pay phones were available in poor areas, and they were serviced by technicians of Telkom. Now, with a little bit of ingenuity and experience, anyone can be a cellphone (or laptop) repair man (or woman). Smart phones are not only connecting companies with clients, but also with a work force they would never have had access to. As The Economist writes this week, the future of work will increasingly be outsourced. That is true both for skilled occupations, like lawyers and HR and management consultants, but also for unskilled labourers. Consider Uber, a car service which was founded in San Francisco in 2009 and which already operates in 53 countries including South Africa. Technology allows anyone with a decent car to act like a taxi service, creating jobs for people that only need a drivers license. It will certainly injure the existing taxi services. But it is generating far more new jobs than it is destroying, simply because far more people will use the new (cheaper and more efficient) service. (Unfortunately, government regulations are very slow to adapt to new technologies, and it is incredibly disappointing that Uber cars are now being pulled off Cape Town roads simply because government officials are unwilling, or unable, to understand the immense benefits of the new service, killing jobs for those who need it most.) Or consider Handy, a company where you can find someone to clean your house, or do small plumbing jobs, or paint, or fix the paintings to the wall. Technology (such as smart phone apps) now allow the providers of such services to be matched to the suppliers of such services at very low cost, creating jobs for the unskilled.

What can be done to encourage more of this behaviour? Governments could ease regulation to make such exchanges legal and less complicated. Entrepreneurs should build apps that allow people to match their needs (dog sitters, electricians, massage therapists, tattooists, midwives, house cleaners, snake catchers, whatever) to those who can provide it. What we need is a Gumtree for the service industry, with an interface like Uber.

But kids leaving school can help themselves too. They can start by acquiring basic skills that will be needed in a future where robots are our friends. A drivers license can still get you a job (especially working for yourself through Uber), but perhaps Google’s self-driving car will make that obsolete in ten years’ time. So here is my advice: think about what services cannot be done by machines. Sport coaches. Au pair services. Beauticians. Chefs. Wedding planners. Gardeners. Music teachers. Barbers. Paramedics. The best thing is that none of these require a university education. And these jobs will be in-demand for a long time to come; in fact, chances are you are more likely to find a job qualified in one of these professions than if you were to leave university with only a Bachelors degree. Often they will require extremely hard work and long hours, but in most cases you will be able to work for yourself, which means you determine the lifestyle you want.

Robots are not the evil things that will destroy the jobs of the poor. They may destroy some jobs, yes, but they will create far more jobs in other places; in fact, they may be the saving grace for our faltering education system. To identify the opportunities new technologies offer, matriculants without a university access will have to innovate, experiment, be entrepreneurial and dedicated. They will also have to learn to work with robots, not against them.

*If you want more advice on what to study, click here. If you want more advice on what to do when you get to university, this might help.

Written by Johan Fourie

January 11, 2015 at 07:08