Innovation
Education & Jobs: Austria has low unemployment, low third level graduate numbers
By Michael Hennigan, Finfacts founder and editor
Aug 18, 2014 - 2:32 AM

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Education & Jobs: Austria has for decades had a successful economy with low unemployment but also low third level graduate numbers.

Austria's jobless rate was 1.4% in 1970; 3.2% in 1990, 4.46% in 2010 according to the Organisation for Economic Co-operation and Development (OECD). Eurostat, the EU statistics office, in its latest unemployment  report has Austria at a 5% rate in June 2014, just behind Germany at 5.1%.

Austria's rate has been the lowest in the European Union for years.

Prof Frank Barry of Dublin's Trinity College, in a recent post on the Irish Economy blog, wrote: "Irish Educational Studies recently published a special issue to commemorate the landmark report Investment in Education (which was commissioned in 1962 and released in 1965). The report’s finding that half of all children were leaving school by the age of 13 generated newspaper headlines and created the environment for Donogh O’Malley’s ‘free education’ initiative of 1966."

This is Prof Barry's contribution and he writes: "Convergence on average Western European living standards over the Celtic Tiger era brought an increased emphasis on science, technology and innovation (STI), with implications for the university sector in particular."

This was my response:

The ‘free education’ move and introduction of third-level grants were examples of inspired Irish decision making.

While it has been argued that the later abolition of third level fees had little impact on the entry of students from low income families, the moves in the 1960s appeared to have changed the attitude that universities were for the urban elites.

By 2013, Ruairi Quinn, minister of education, acknowledged publicly that the common myth of Irish education being “world class” was a delusion. He said it was:

“an assertion based on no evidence whatsoever other than something of a feelgood factor that was communicated to us at home by the greater Irish Diaspora who felt, for whatever reason, that it was better than what their children were experiencing in other parts of the world.”

A national obsession for children to get into top universities can be bad for a country.

“There’s an educational arms race taking place around the world right now – from China to Germany, to India to South Korea,” President Obama said in a 2010 speech in response to a US Congressional move to cut education spending. He added that the nation which educates its children the best will be the nation that leads the global economy in the 21st century.

A year before these remarks, at a Washington forum of the “Educate to Innovate” campaign for US excellence in STEM (science, technology, engineering and math) education, President Obama said, “The South Korean economy has grown enormously over the last 40 years thanks to the education passion of Korean parents.”

However, some people in South Korea worried that the passion for education, dating back to the gwageo, a civil-service exam that flourished in the Joseon Kingdom (1392-1910), had become a cause of social sicknesses, which was bankrupting families who forced to spend on cramming schools while pushing down the birth rate.

The government began promoting vocational education as graduates found it difficult to get work in an economy with over 30% of the workforce in temporary positions.

Just over one third (35.7 %) of the population aged 30 to 34 in the EU-28 had a tertiary education in 2012, rising to four out of ten (39.9 %) among women, and falling to just over three out of ten (31.5 %) among men. In many member states (Belgium, Denmark, Ireland, Spain, France, Cyprus, Lithuania, Luxembourg, the Netherlands, Finland, Sweden and the UK) the proportion of 30- to 34-year-old persons with tertiary educational attainment was already 40 % or more in 2012; this was also the case in Iceland, Norway and Switzerland.

Eurostat data shows that Germany has levels in the low 30s for males and females where its apprenticeship system involving both work and study extends to several non-craft sectors.

Both Austria – below 30% for both males and females – and Denmark for males, have low ratios.

According to the World Bank, Austria’s unemployment rate has remained below 5% with the exception of 5.2% in 2006 since the bank began recording the statistic in 1982.

A key factor for Austria, Denmark and Germany, is the youth apprenticeship system and while Ireland has one of the highest degree ratios, the participation in the apprenticeship system is the lowest in Western Europe.

There are 3 case studies here from Austria, Germany and Switzerland on the dual education/employment system and its impact on youth employment

On the science and technology policy, the key question is when will there be an acknowledgement of failure?

The distinction between basic or blue sky and applied research is bogus and US public research has always had broad objectives such as the space program, health and defense.

Louis Pasteur (1822-1895), one of Europe’s greatest scientists, had the goal of improving public health.

It should also be understood that commercialisation is an incidental aspect of university research as in contrast with a business, it is not generally motivated to meet a created or existing public demand.

Frank Barry quotes Mary Harney, enterprise minister (1997-2006) as saying a decade ago that we should aspire to create a Bill Gates and Michael Dell and in 2012, Richard Bruton, enterprise minister, said we should strive to create the next Microsoft or Google.

In all these examples none were pioneers in their fields – they successfully improved on the models of the pioneers and that is the usual genesis of great tech companies.

Governments since 2006 have made research the flagship enterprise policy and to admit failure would raise the question what should replace it.

Why should one sector monopolise public enterprise funding?

Wonder why the publication of the 2013 Irish Patents Office annual report was being held over until the current holiday month and was only published on July 31 when Finfacts made a public issue of the delay?

Less than 30% of IDA Ireland backed firms spend above €100,000 annually on R&D and the mantra of economists that rising services exports reflected “moving up the value chain” was a myth. It mainly reflected tax avoidance.

Industry collaboration with universities is low and the Irish taxpayer usually fund’s the lion’s share of such projects.

Less than half of the employees in Irish-based ICT firms are involved in techie work.

In the US almost three quarters of STEM graduates do not work in STEM occupations and in recent times, it has been argued that computer coding is essentially a trade. However, four-year computer science college degrees are a standard requirement for the job but not alone is this unnecessary, the high demand for places means that many young people with potential cannot enter the sector.

According to The Wall Street Journal 14% of the members of some teams at Google don’t have a college degree.

Finfacts 2013: Irish Economy 2014: Shambolic apprenticeship system gets some attention at last


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