The Future of Education and Technology — Part 2

In the previous post, “The Future of Education and Technology,” I wrote that technology will have a disruptive influence on the present education system. But that is par for the course since the influence of technology on education has always been disruptive, rather than incremental. One could say that the education system in general has long periods of stasis punctuated by some technology-driven disruption.

In the following I will argue that the system is ripe for another of those disruptive events that will push the system from its current state to a qualitatively different higher state. As this is a personal view, my argument boils down to a lot of hand waving and no data. I will also introduce an analogy to explicate the changing role of the level of skills required in the production of education. I will use the manufacturing system — specifically automobile manufacture — as an analog.

Since education involves the transmission of information between sender and receiver, technologies related to information and communication have always mattered. First there was the oral tradition — the teacher had the knowledge, which was communicated orally to the student. The student heard the spoken word (that’s information) and internalized it into knowledge in his head. The information transfer had to be real-time. Then came the first breakthrough: the written word. That disruptive change made it possible for an absent teacher to communicate knowledge. Instead of real-time synchronous transmission of information, writing made it possible for asynchronous learning and also preserving information outside the human brain.

But that first change required the learning of a skill: how to read and write. The teacher had to know how to write and the student how to read, at a minimum. That was “skill-biased technological” change. Those who had the required writing and reading skills were better off in the education process relative to those who didn’t. Investment in the skill of reading and writing had positive returns.

The invention of movable type and the printing press was the next disruptive change. Previous to that, only a few had access to the limited number of book manuscripts. The press made it possible to mass produce books. The printing press was a labor-saving invention but it was physical capital intensive and also required specialized skills to produce and operate presses. The press enters the education production function “multiplicatively,” not additively.

This feature of technology entering multiplicatively in the production function is a general feature of technology. This is worth noting because errors arise from neglecting this fact.

The features listed above — skill-bias, physical capital intensive technology, and technology as a multiplicative factor — is also characteristic of the latest technological change in education: the world wide web and the internet. Great physical and human capital is needed for inventing, implementing and using the web and the internet than what was required for the printing press technology.

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I will get back to the latest disruptive technology and education. But for now, a digression to the automobile sector. Automobiles were first hand crafted. It required very highly skilled manpower to make them. Then with the advent of the assembly line, and mass-produced interchangeable, standardized components, the degree of skill required to make an automobile decreased. Mind you, the design of the components required engineering skills far greater than that required for the hand-crafted period of automobile production. Also the production of machines that manufactured the components themselves required greater skills and more investment in physical capital.

The major change occurred in the demand for skilled labor shifted from the actual manufacture — which now could be done with much less skilled labor on the shop floor — to the design of machines and the design of the components the machines produced, which was done by highly technically trained human capital. In other words, the demand for “white collar” workers increased, and with increased production volume, the demand for “blue collar” workers also went up.

Then with further development of technology — especially robotics and numerically controlled machines — even the blue collar workers became increasingly redundant. A few very highly skilled workers produced the machines which were computer controlled, and these machines made the components and assembled the cars. This was a skill-biased technical change.

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So now I am set to draw a few parallels, with more to come later. Both in the production of education and in the production of automobiles, the relative demand for skilled and unskilled workers has fluctuated. In the first period, for the automobiles, the demand for skilled labor was high, then it declined relative to the unskilled labor demand, and then finally once again the demand for extremely highly skilled labor overwhelms the demand for relatively unskilled labor.

Similarly, the demand for skilled labor in the process of education was high. The live teacher was a must before the first disruptive innovation of writing. With writing, and later books, the process of education could happen asynchronously and it became possible for the first time for the process of education to occur without a teacher at all: one could read books and internalize the information. But the skill demand at the production end of the process went up because the writing of excellent books required great skills. Using these books, relatively unskilled people could be involved in the education process. They could do a little bit of personalized hand-holding when required.

A few very highly skilled people was all that it takes to produce a small set of great books. Then you need a large number of “brown collar” workers to be teachers who with the aid of these books help students learn. So the demand for skilled teachers saw a relative decline. And now we come full circle: the demand for very highly skilled people is going to be on the upswing and the brown-collar worker (the teacher in the school) is going to decline dramatically.

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When cars were handcrafted by skilled workmen, only the very rich could afford them. It was a low-level equilibrium: high costs, therefore high prices, which meant low quantity demanded, leading to low quantity supplied. Assembly line mass production made cars affordable for the masses. The substitution of physical capital for human capital in the manufacture of cars was what increased the volume of production and reduced costs. That was a high-level equilibrium: low costs, therefore low prices, which meant high quantity demanded, leading to high quantity supplied.

The printing press and books made education affordable similarly. High fixed costs notwithstanding, the low cost of duplication brought down the variable costs sufficiently that average costs declined dramatically. More people could afford the low-priced education and thus the high quantity supplied.

That trajectory continues to accelerate rapidly now. The fixed costs are going up but the marginal costs of duplication is approaching zero asymptotically. The high quantity supplied in response to the high demand ensures that the average cost is low and the market clears at a very low price.

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In summary, there have been two related shifts. First, the shift from low fixed and relatively high variable costs to high fixed costs and relatively low variable costs. This expanded the quantity demand and supplied and the market cleared at a low price. Mass education became possible. Second, the shift in demand for skilled labor from the direct production of education (the skilled teacher) to the production of indirect goods (the books) which are used by relatively unskilled teacher to produce the final good (the educated person.)

There is another aspect of automobile manufacture that has an analog in the education process. In the automobile world, it is the move towards horizontal segmentation and away from vertical integration. In the next post in the series, I will explore that and see what it means in the education process.

Author: Atanu Dey

Economist. View all posts by Atanu Dey