Opinionated @ CFE

Economy of Scale, Product Differentiation, and Education

Jun
05

In most companies, growing larger means you have the capability to offer a wider range of products and services than when you got started. Once your customer base reaches a certain size, products that were once too specialized to be worth pursuing are now worth the time and effort of investment. After all, no two customers are the same or have the same needs, and failing to meet customer needs means you will doom your business.

Education should operate in the same fashion. No two students learn the same way, and any given group of them may cover as many different career paths as there are students. Accommodating this variety is very difficult in a smaller school or school district for the same reasons that small companies can’t offer a wide array of specialized products: it’s simply not efficient to do so. This should mean that a larger school or school district should be able to offer many specialized areas of study. In practice, however, we’re married to the idea of producing the exact same product using the exact same methods because it’s “efficient”.

Why, though, should this be the end goal of education? This video raises some very interesting points about how a “one size fits all” mentality is failing us.

Our current approach treats students as interchangeable cogs, even though brilliant business minds have rejected the notion of people as machinery. What worked in the industrial revolution does not work in the information age. We have a number of specialized job fields that can’t find the workers we need despite unemployment sitting at 9% plus. Instead of focusing on standardization of education (which should be more appropriately called homogenization of mediocrity), we should be throwing out everything we think we know and starting over.

I’ve said it before and I’ll say it again: if a high school diploma does not prepare someone for an entry-level job, it has no value. Given the size of public education, there is no excuse for it. Why shouldn’t we have high schools with specialized areas of study? Some school districts have hundreds of thousands of students. Would it not be possible to create a high school of 2,000 dedicated to, say, being a plumber or electrician? Could we not have a high school dedicated to producing junior systems administrators and programmers? Can’t we create a high school that churns out badly-needed nursing staff?

I contend that the demand for such programs exists, but we’re so stuck on centuries-old methods of teaching that we can’t be bothered to offer the products to kids who want and, more importantly, need such training. Kids drop out of high school because they don’t see a point in it. They don’t go on to college because they cannot fathom the idea of going through four or more years of what was boring them to death in high school, especially when the return on the investment is so low. Smart investors have already realized this, thus why Peter Thiel made the revolutionary offer for kids to drop out of college to make themselves useful and go found a business.

The consequences of staying on our current path cannot be clearly stated enough. They promote higher personal debt and lower economic output without any kind of offsetting benefits. If we care at all about our children’s future, we should make a radical shift immediately.

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