50% student target key to a successful economic strategy

A dynamic and flexible labour market has the ability to quickly adapt. More, not less graduates, is the key to this successful economic strategy.

The government’s ambition to get 50 per cent of young people into higher education has come under fire from graduate employers. The Association of Graduate Recruiters (AGR), a body representing graduate employers, has called for the target to be scrapped, arguing that it has “driven down standards and devalued the currency of a degree and damaged the quality of the university experience”.

Its chief executive Carl Gilleard declares it should be part of a process to “reaffirm the value of a degree”. Though he is right in pushing for a renewed focus to improve higher education standards and educational quality, he is wrong in identifying the 50 per cent participation goal as an inhibiting factor.

Firstly, having a larger graduate pool benefits the British economy. In the past few decades we have gone through some major national and geo-political changes, which have redefined the nature of our economy.

Our future is a high-skilled and knowledge based economy, which is a world leader in intellectual and technology-based industries. This requires more, not less graduates, particularly with rising economic powers China and India producing graduates annually en masse.

Higher numbers of skilled graduates make the British economy more competitive. With record numbers attending University and applying for jobs, our labour market is one of the strongest in the world. The talent on offer is high. This helps attract foreign investment and inward trade, boosting our economic growth.

Additionally our strong labour market has helped businesses enjoy higher levels of productivity and standards in the calibre of employees. This in turn benefits UK PLC as graduates have higher earnings and income potential than non-graduates, raising GDP.

AGR’s report runs counter to our push for social mobility. Allowing and encouraging more people to acquire some form of higher education is a basic necessity in improving life chances for those from poorer and more disadvantaged backgrounds. With the advent of a knowledge-based economy, tertiary education and qualifications are of paramount importance in securing professional success, and should not be curtailed.

The long-term prospects for the British economy are more secure with a bigger graduate workforce, as powerful global forces can quickly re-define the nature of markets and economic relations. A dynamic and flexible labour market has the ability to quickly adapt. More, not less graduates, is the key to this successful economic strategy.

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10 Responses to “50% student target key to a successful economic strategy”

  1. Anonymous

    So, having used one sentence to bat away the AGR’s argument in its entirety, you simply restate your own broad-brushed case with the barest facade of supporting evidence.

    OK, suppose the target is 100%; everyone has a degree – what sort of degree? who cares. The increased-expected-earnings statistics do exist, but are not shown here. Either the general level of skill and training in the workforce will have increased dramatically – which is completely, not to mention historically implausible – or the general worth of a degree must have fallen.

    Just as now, while many degrees will carry a lot of weight with employers, other degrees will carry virtually none, and employers will simply choose other ways of determining aptitude. So the net result of pressing for quantity of graduates over quality may be to fool some students into making a potentially very expensive mistake.

  2. Susan Nash

    RT @leftfootfwd: 50% student target key to a successful economic strategy: http://cli.gs/bbU8U

  3. John Peart

    RT @susan_nash: RT @leftfootfwd: 50% student target key to a successful economic strategy: http://cli.gs/bbU8U

  4. Mellie Agon

    It is a complete joke that New Labour claims it cannot afford free education, while spending billions on murdering people around the world. It is all about priorities.

    Restore free education!

  5. Adam Bell

    This is a rather stupid article. Graduates per se will not necessarily contribute to the knowledge economy; having 50% of our population being experts in studying the media will not lead to economic growth. What Rayhan should’ve done is mention the various different models out there for determining what proportion of graduates qualify in particular subjects.

    For example, the German government* determines the ratio of different types of degrees available to applicants for university places in any given year by consultation with business groups. The reason for this is the greater levels of information available to business groups about likely future employment activities compared to the nation’s 18-year-olds. Currently in the UK, the number of degree places available in a particular subject is to a large degree determined by demand from applicants. In both systems, the market determines what degrees are available, but under the German system the market participants have greater access to information, producing a more effective outcome.

    *This is something I faintly recall, so may be wrong about the Germans, but sounds like a fairly sensible proposal.

  6. Liz McShane

    Anon – please don’t fall off your chair but for once I agree with you wholeheartedly on this!

    I have always been concerned by the obsession with getting 50% plus of young people in to University – I really do think it inflates degrees especially when you see the type of degrees people are taking & being offered these days, not to add some former FE type colleges having university status. It doesn’t help anyone especially those students who end up with massive student loans for a degree that just might get them a job in Starbucks. I think it was wring to merge Polys with Universities for the simple reason that they were 2 quite different beasts/personalities not for any ‘snobbish’ reason and they enjoyed as much respectablity as Universities and there were those polys that enjoyed good/bad reputations just like Universities did.

    I would bring back student grants for all, reduce the targets and make University access based on stringent educational merit/achievement and nothing else irrespective of income/social status etc.

    All this education inflation has resulted in the marginalisation & ‘airbrushing out’ of apprenticeships & trades which is now so apparent. These are things that Thatcher dismissed in her mission to make everyone feel that if they didn’t have a degree of some sort then they weren’t a proper or respectable human being and unfortunately Tony Blair continued where she left off.

  7. rayhan

    Adam you describe my piece as ‘rather stupid’, yet you make an incredulous assertion that 50% of young people who go to University will study media. You are also wrong about graduates not necessarily boosting economic growth. The larger our graduate pool, the more competitive and stronger our labour market. It is an economic fact. Higher qualifications create a higher-skilled economy, attracting investment and trade.

    You make a better point about businesses needing to have more of an input over the types of degrees offered at universities. The university of hertfordshire works very well with businesses and industries in developing their educational programmes. I agree we need more vocational style education like this. However, the prime purpose of universities and higher education are to be centre’s of academic excellence, to stretch and challenge the minds of students. They form the core for our nation’s research and innovation. Too much business influence can dilute this academic mission.

    Liz, empirical evidence has demonstrated that bright individuals from poorer backgrounds who attend University but with slightly lower grades and marks than those from more privileged and affluent backgrounds do as well, if not better than them. It simply would not be socially fair or just for poorer individuals to be denied access to attend the best universities due to misfortune of birth.

  8. Liz McShane

    Adam – I did not suggest at all that i proposed excluding people from poorer backgrounds at all in fact I was saying the opposite or at least meant to say the opposite!!!!!!!

    University access should be based soley on educational achievement and having grants rather than loans will encourage people from less well off backgrounds on going on to do degrees rather than those from private/public school where financial access is not a problem irrespective of their educational attainment or ability.

    I do not think it socially fair or responsible to encourage people to do ‘soft’ degrees at let’s say, weaker universities and be burdened with loans at the end of it. Educational attainment & ability is not purely based on income – although I do think private/public schools give their pupils an unfair advantage.

    I hope this clarifies my position.

  9. Anonymous #1

    “The larger our graduate pool, the more competitive and stronger our labour market. It is an economic fact. Higher qualifications create a higher-skilled economy, attracting investment and trade.”

    Rayhan, you’re blogging off the top of your head – this site is supposed to be evidence-based. Besides, if you cite economic terms, you should address this issue as an economist, in a methodical way. Where are the statistics on graduate earning premiums, grouped by degree? To what extent are the degrees actually improving labour productivity? What about international comparisons – to what extent are we attracting investment and trade in comparison to other countries? What about the value accruing to a degree simply reflecting its scarcity – and the *kind* of person that student is – rather than its economic benefit? And finally, if targets at all, why 50% and not 100%

  10. Fiona Edwards

    RT @leftfootfwd: 50% student target key to a successful economic strategy http://cli.gs/bbU8U

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