Andrew Leigh

Here's the speech that I gave last night to kick off my community meeting in Gungahlin.

Revenge of the Nerds: Improving Australia’s Education System
Gungahlin Lakes Club, 16 March 2011

In a book titled Outliers: The Story of Success, writer Malcolm Gladwell discusses the way that extraordinarily successful people came to get where they are. Gladwell’s aim is to dig deeper than the legend of brilliance, and discover what lies underneath. His most interesting story concerns Bill Gates. Now, you probably think you know the story of Gates: smart geek drops out of Harvard, starts his own computer company, and becomes a squillionaire. But how many of you know about Gates’ high school experience?

Bill Gates attended high school in Lakeside, a school in Seattle. Each year, the mothers’ club ran a rummage sale, and in 1968, they decided to spend $3000 on a computer terminal. Now $3000 was a lot of money in those days, and the mothers’ club didn’t buy any old computer. They bought one that allowed real-time programming, directly linked to a mainframe.

To get an idea of how extraordinary this was, my father was at the time doing his PhD at Cornell University. The computer he got access to used punch cards, and he had to wait overnight to get his results. Yet as a schoolkid, Bill Gates was using a far better computer than a student at an Ivy League university.

The result was that Gates and his friends got the chance to do more computer programming than almost anyone else in the world. Thanks to a few more lucky breaks, he got access to the computer lab at the University of Washington. And before he left school, he had gotten a part-time job writing code. By the time Gates dropped out of Harvard in his second year, he had been programming virtually non-stop for seven years. He estimates that there were probably no more than 50 young people in the world with that sort of experience.

Yes, Bill Gates is a smart guy. But the moral of the story is that what made him what he is today were the opportunities he was given. If we want more Bill Gateses in Australia, the answer isn’t to dig inside our DNA and sequence the genius gene. It’s to expand opportunities for every child, so every young Australian has the chance to fulfil their potential.

But forging an education system that provides opportunities to everyone isn’t easy, because our society doesn’t stand still. What we think of today as a new technology will be regarded by the next generation as a tool used by old-timers. As Homer Simpson once said: ‘The internet? Is that thing still around?’. Our education system needs to prepare people for a world of change, because change is the only certainty.

How much will the world change? Let’s take the case of my youngest son, aged one. He will probably enter the labour market around 2030, and work until at least 2070. We don’t know much about the labour market of 2070. But we can be sure that it’s going to change a lot. One way to get a sense of how radically jobs will change in the next 60 years is to recall how much they’ve changed in the last 60.

The world of work when my youngest son retires in 2070 will be as different from the workplace we know now as the workplace of 1950 is from today’s. Just take a moment to think of the transformative impact of computers and photocopiers, mobile phones and barcodes, the equal pay cases and racial discrimination laws. Now, can you imagine taking today’s jobs and changing them just as radically? That’s what we need to prepare young Australians for.

We can get a few hints of things to come from recent technological advances.

• Three-dimensional printers make it possible to print just about any plastic object. Using a technology like an inkjet printer, they fire small droplets of plastic to make up a design. Other models can ‘print’ in metal using selective laser-sintering. Just as the computer caused many typists to have to retrain, 3D printers are likely to pose a direct challenge to anyone who works in manufacturing.

• Artificial intelligence is now being used to help law firms scan through millions of documents in preparation for court cases. New software not only finds keywords – it can also identify unusual behaviours, such as when a person’s email style switches from casual to very formal. These programs are a direct challenge to lawyers and paralegals who are currently essential to court preparation.

• Videoconferencing is benefiting from better video compression technologies, and faster broadband. Once the picture on the other end of the videophone becomes as clear as your regular television images, it will change the way in which many workplaces operate. In my former job as an Australian National University economist, we used to fly in speakers for our Friday seminars from other universities in Australia. But with great videoconferencing, we’d probably be more likely to arrange a videolink to a presenter from Beijing or Boston than fly someone down from Brisbane.

Those jobs that are most at risk are not necessarily low-skilled jobs. In 1980, typesetters were a more skilled occupation than security guards. But today, we have many more security guards, and virtually no typesetters.

The jobs that are most at risk are those which are most readily done by machines. What does a machine do best? It does jobs with clear rules. That means that technology is likely to replace data analysts, but probably not taxi drivers; technology is likely to replace supermarket checkout operators, but probably not waiters.

Of course, you should take my predictions with the same handful of salt that you apply to other people’s predictions about the future. Indeed, given that I’m an economist – and most of our economic forecasters failed to predict the Global Financial Crisis – you might want to be even more sceptical. Like nineteenth century Londoners who worried that their city’s biggest challenge would be horse manure in the streets, my predictions too might fail to take account of the next big technological advance.

But I do think the best preparation we can give young Australians is to be ready for a life of change. The best thing we can teach them is not the ability to operate today’s technology, but the skills to adapt to the jobs of tomorrow, the building blocks of lifelong learning… and perhaps the ability to crack a ready smile and work in a team.

Take the job of a mechanic. As one OECD official puts it, 'In 1930, all the coded information for a GM car could be captured in 230 pages. Now a single car involves some 15,000 pages of coded knowledge which workers will need to be able to access, manage, integrate and to evaluate.'

If there’s a serious problem with a modern vehicle, the solution is sometimes to reboot the onboard computer. So if we trained you to fix a 1930 Buick, you probably couldn’t do much more with a modern car than to wash its wheels. Similarly, as electric cars replace petrol vehicles, the job of a mechanic will change substantially.

So that brings me to the question: what do we want our education system to achieve? Before I try to answer that, let me tell you another story.

My eldest son was born by caesarean section. If you’ve never witnessed it before, it’s an extraordinary operation. From the first incision to the moment the baby emerges takes about seven minutes. But it then takes almost an hour for the mother to be sewn up and moved into a recovery room.

So for the first hour of my eldest son’s life, the doctors at Calvary Hospital left us alone together in a hospital room. He was utterly relaxed and peaceful, and I was utterly overwhelmed to be cradling a new life in my arms. It might sound strange to you, but I decided I should talk with him, and use this chance to give him all the advice that a father ought to give his son. The thing was, I’d never given a father-son talk before, so it took me ten minutes of babbling before I decided the one thing I wanted him to do more than anything else. I wanted him to be curious.

Four years later, this conversation sometimes floats back to me when my son is opening all the cupboards, or sitting in the back seat peppering me with questions like ‘Dad, why is the sky blue?’ (I’m happy to answer that one in tonight’s question and answer session, by the way.) But I still think that if I could have him do only one thing, it would be to be curious.

At their best, our schools, our vocational training centres and our universities teach creativity. But it’s hard to test creativity. Similarly, we want our schools to imbue a love of learning, a respect for others, and an enjoyment of physical activity. None of these things are easy to test. Which means we need to face up to the fact that what we can measure is only a portion of what matters in education. We can measure literacy and numeracy, but we want our schools to do more than to produce children who can read and add.

Yet just because literacy and numeracy aren’t the sole goal of the education system, we shouldn’t kid ourselves that they’re unimportant. Students who score highly on literacy and numeracy tests in year nine are more likely to get a job. And among those who find employment, higher scores are associated with higher wages. Literacy and numeracy skills are clearly something that employers care about.

In this context, it’s somewhat concerning that the test scores of Australian children failed to rise over recent decades. When I was an academic at ANU, Chris Ryan and I looked at literacy and numeracy scores, using instances in which the same test was delivered to different cohorts of students. We found that from the mid-1960s to the mid-2000s, numeracy skills declined slightly. For literacy, we were only able to look from the 1970s to the late-1990s, but we saw the same pattern. Despite big increases in school spending, test scores hadn’t gone up. At least up until 2007, when we completed our analysis, the evidence from international PISA tests and from state literacy and numeracy tests supported this general finding: test scores that were flat or declining.

One reason that test scores flatlined may have been that we dropped the ball on teacher quality. There’s nothing more important in a school than having talented and motivated teachers, and I can’t emphasise enough how valuable the work is that Australia’s quarter of a million teachers do every day. Teaching is hard work. In his book Teacher Man, Frank McCourt wrote about his experience teaching high school English in New York, summing up the classroom experience as well as anyone I’ve read:

‘In the high school classroom you are a drill sergeant, a rabbi, a shoulder to cry on, a disciplinarian, a singer, a low-level scholar, a clerk, a referee, a clown, a counsellor, a dress-code enforcer, a conductor, an apologist, a philosopher, a collaborator, a tap dancer, a politician, a therapist, a fool, a traffic cop, a priest, a mother-father-brother-sister-uncle-aunt, a bookkeeper, a critic, a psychologist, the last straw.’

Teachers can change lives forever – I’m sure all of us could tell stories about a teacher who made a difference in our lives. (For me, it was my high school English teacher, Judith Anderson.) Yet as a society, I sometimes worry that we haven’t done enough to ensure that we get as many talented people as possible to make teaching their number one career choice.

To look at teacher quality over time, Chris Ryan and I studied the academic aptitude of new teachers over a twenty year period. In other words, we asked the question: what do we know about the literacy and numeracy of teachers themselves? (Again, teaching is more than just writing and multiplying, but all else equal, most of us would want teachers to have strong literacy and numeracy skills.) Chris and I found that the share of teachers who scored in the top fifth of their class halved from the early-1980s to the early-2000s, while the share in the bottom half of their class approximately doubled. This is in line with what has been found in countries such as the United States.

There are a range of possible reasons for this, but one is that – as a society – we failed to recognise that many of the talented people who were choosing teaching in the 1960s and 1970s were doing so because of the rampant gender pay discrimination in professions such as business and law, accounting and medicine. As a consequence, a large share of women who left university went into the teaching profession. But as gender pay gaps diminished in the professions, teaching began to look less attractive by comparison.

Let’s be very clear about this. Reducing gender pay gaps in the professions was a good thing. But it had an unexpected consequence. The right approach might have been to substantially increase teacher salaries, or to introduce some form of promotion system. But instead, we opted to spend billions of dollars reducing class sizes. Because a 10 percent class size cut costs the same as a 10 percent teacher pay rise, we sacrificed much higher teacher salaries in order to achieve smaller classes.

But enough history. Let me tell you about a few of the things that the Gillard Government are doing to improve the education system today.

• For schools, one of the most significant reforms has been the MySchool website. For the first time, parents have been able to observe information about how students at their local schools are performing. This is a reform clearly backed up by economic evidence, which shows that transparency leads to a race to the top. With MySchool 2.0, the government has included value-added data, which allows parents and educators for the first time to see the gains their students are making. To mark the launch of MySchool 2.0, the Prime Minister and Minister Garrett visited Turner School, where the principal Jan Day told them about how she uses MySchool to improve her school’s performance, and to learn from neighbouring schools. The new MySchool website now includes information on school resources, which is aimed at fostering a better-informed debate about school funding.

• Something else you’ll notice if you visit any school in Canberra is that this government has embarked in the largest school modernisation program in Australia’s history. We did this to support jobs in the construction and design sectors during the global financial crisis, and many people I speak with in those sectors say that they would otherwise have been out of work. But we also did it because we knew schools needed better buildings. At Black Mountain School, a specialist school for students with intellectual disability the BER has meant for the first time all students are able to attend school assemblies, and for the first time students in a wheelchair are able to go up on stage to collect awards and be recognised for their achievements in front of their peers. Florey Primary School has new science labs in which kids will have an opportunity to follow the footsteps of Howard Florey, after whom the school is named. At Amaroo Primary School teachers can teach in their traditional classroom, or remove the dividing walls between classrooms and teach in teams. When I was in school, we had blackboards. Then whiteboards came in. Now, across Canberra, whiteboards are being replaced by innovative smart boards, which let students use their fingers to draw and drag objects.

• Across Australia, we’re supporting students in low socio-economic school communities, and improving literacy and numeracy. Through our National Partnerships, we’re investing in over 2000 schools across the country. These schools – government and non-government – serve the most disadvantaged children in Australia, and this program is aimed at allowing them to implement programs that will provide better opportunities to those children.

• Another reform that offers promise is improving the salary structure of teachers, in order to encourage the most talented young people to become teachers, and create incentives for high-performing teachers to be recognised for their achievements. During the election campaign, we promised to implement a performance pay system that will see the top 10 percent of teachers paid rewards worth around $8000 apiece. Under the proposal, performance will be based on criteria set out by the Australian Institute of Teaching and School Leadership, including raising student achievement and assisting other teachers.

• For universities, we’ve increased research funding and boosted the number of university places. Following a major inquiry chaired by Denise Bradley, we’ve shifted to a new system in which places in Australian universities will be set based upon student demand. From 2012, the numbers of student places in university courses won’t be centrally determined by the department, but will fluctuate based on student demand. This will allow institutions to receive more funding when they expand popular courses.

• In the vocational education sector, we’re creating Trades Training Centres, which will allow students to learn vocational skills while staying in school. The ACT’s first Trades Training Centre will be located at St Mary MacKillop College, and used by schools at St Francis Xavier College, Merici College and St Clare's College. The Gillard Government are also keen to move the sector towards a system based on student demand, similar to what we have already done with universities.

If we want to raise living standards, we need to increase the productivity of Australians. And the best bet for raising productivity is to improve skills. So our education reforms are also fundamental economic reforms. Indeed, we have good evidence that countries with higher maths and science scores grow faster. On one estimate, if Australia were to increase our maths and science scores to the level of Finland, our economy would grow 0.5 percentage points faster, making the average household more than $500 a year better off.

Boosting the quantity and quality of education in Australia will increase the level of innovation in the economy, and allow for more rapid diffusion of new technological changes. Creating the incentives for students, teachers and principals to perform at their best would provide a boost to living standards that rivals any of the big economic reforms in Australia’s history. Floating the dollar, bringing down the tariff walls, enterprise bargaining, competition policy – the payoff from a better education system could be bigger than any of them.

If the reform agenda remains focused on the neediest students, there is another payoff too. Education is a social policy as good as any we’ve yet developed. Because unemployment is the best predictor of disadvantage, having the skills to do the jobs of the future is essential to staying out of poverty. If we can raise the performance of schools in low-income neighbourhoods, then as well as raising the overall growth rate, education reform may also narrow the gap between rich and poor.

As a local member of parliament, one of the most enjoyable things I get to do is to open new school facilities. So far, I’ve been to more than a dozen openings, and I’ll go to three more this Friday. At those events, I tell students about the national school building program, and say a few words about my own difficulties at school. Then I say:

'whenever primary school seems hard, I want you to try to remember where your education can take you.

'There’s a young Aboriginal woman called Tania Major. She went to a school in Cape York in the far North of Australia. There were only 15 kids in her class. The area where she went to school has lots of problems, so a lot of the other kids in her class were in trouble – they had problems with drinking, problems with the police. But Tania studied hard. She was the only kid to finish her high school. She was the only one to go to university. And today, she’s not only a criminologist (which is a type of scientist), but a few years ago, she was voted the Young Australian of the Year.

'So when you’re using these new school facilities, I want you to think of people like Tania, and remember that what you’re learning here at school today really can take you anywhere you want to go in your future.'

And that is what I want our education system to achieve, generations of young Australian who through educational opportunities are equipped with the necessary skills to venture into an unimaginable future with confidence and courage.

Thank you for listening tonight. I look forward with curiosity to your questions.