Department of Education

Improving our understanding of the relationship between learning and earning

It is commonly assumed that in the global knowledge economy there is a straightforward relationship between learning and earning

keyboard-60215146Professor Phillip Brown (Cardiff University), Professor Hugh Lauder (University of Bath) and Professor David Ashton (University of Leicester) have been conducting research that challenges this assumption.

Through their research they suggest we have entered a global cut-price competition for brainpower. At the same time that some occupational elites have been able to use their market power to hike-up their salaries, many university graduates in Britain and the United States, confront a reverse or Dutch auction in which they will be competing with much cheaper graduates in countries like India and China.

Their research focussed on the skill strategies of multinational companies and national policy makers in seven countries (South Korea, China, Singapore, India, Germany, the USA and the UK). This project involved interviewing executives from multinational corporations (MNCs) in the automotive, banking, electronics and IT sectors.

Key research findings

  • Multinational companies have global skill strategies, which affect the job prospects of many graduates in the West.
  • Many graduates in Britain and the USA are competing for jobs with lower cost graduates from East Asia.
  • High quality, low cost goods and services can be produced anywhere, provided there are basic transport and communications infrastructures.
  • Many ‘knowledge’ jobs are now standardized, routinized and digitalised. The rise of ‘digital-Taylorism’ has meant a further squeeze on graduate jobs.
  • A few graduates from top universities are recruited as ‘talent’ and they will gain highly paid jobs with ‘permission to think’. The majority in Britain and the USA will receive lower wages than their parents, unless a new business model is created. In the view of the authors, this can only be done by industrial policies that seek to raise the demand for graduate jobs.