The Future of Work

The Future of Work Today's world of work is completely different to anything that's gone before. How can you stay ahead?

Artificial intelligence Anything you can do, AI can do better. So how will it change the workplace? The return of the machinery question After many false starts, artificial intelligence has taken off. Will it cause mass unemployment or even destroy mankind? History can provide some helpful clues, says Tom Standage THERE IS SOMETHING familiar about fears that new machines will take everyone’s jobs, benefiting only a select few and upending society. Such concerns sparked furious arguments two centuries ago as industrialisation took hold in Britain. People at the time did not talk of an “industrial revolution” but of the “machinery question”. First posed by the economist David Ricardo in 1821, it concerned the “influence of machinery on the interests of the different classes of society”, and in particular the “opinion entertained by the labouring class, that the employment of machinery is frequently detrimental to their interests”. "Today the machinery question is back with a vengeance, in a new guise" Thomas Carlyle, writing in 1839, railed against the “demon of mechanism” whose disruptive power was guilty of “oversetting whole multitudes of workmen”. Today the machinery question is back with a vengeance, in a new guise. Technologists, economists and philosophers are now debating the implications of artificial intelligence (AI), a fast-moving technology that enables machines to perform tasks that could previously be done only by humans. Its impact could be profound. It threatens workers whose jobs had seemed impossible to automate, from radiologists to legal clerks. A widely cited study by Carl Benedikt Frey and Michael Osborne of Oxford University, published in 2013, found that 47% of jobs in America were at high risk of being “substituted by computer capital” soon. More recently Bank of America Merrill Lynch predicted that by 2025 the “annual creative disruption impact” from AI could amount to $14 trillion-33 trillion, including a $9 trillion reduction in employment costs thanks to AI-enabled automation of knowledge work; cost reductions of $8 trillion in manufacturing and health care; and $2 trillion in efficiency gains from the deployment of self-driving cars and drones. The McKinsey Global Institute, a think-tank, says AI is contributing to a transformation of society “happening ten times faster and at 300 times the scale, or roughly 3,000 times the impact” of the Industrial Revolution. Mr Musk warns that "with artificial intelligence, we're summoning the devil" The Economist Just as people did two centuries ago, many fear that machines will make millions of workers redundant, causing inequality and unrest. Martin Ford, the author of two bestselling books on the dangers of automation, worries that middle-class jobs will vanish, economic mobility will cease and a wealthy plutocracy could “shut itself away in gated communities or in elite cities, perhaps guarded by autonomous military robots and drones”. Others fear that AI poses an existential threat to humanity, because superintelligent computers might not share mankind’s goals and could turn on their creators. Such concerns have been expressed, among others, by Stephen Hawking, a physicist, and more surprisingly by Elon Musk, a billionaire technology entrepreneur who founded SpaceX, a rocket company, and Tesla, a maker of electric cars. Echoing Carlyle, Mr Musk warns that “with artificial intelligence, we’re summoning the demon.” His Tesla cars use the latest AI technology to drive themselves, but Mr Musk frets about a future AI overlord becoming too powerful for humans to control. “It’s fine if you’ve got Marcus Aurelius as the emperor, but not so good if you have Caligula,” he says. It’s all Go Such concerns have been prompted by astonishing recent progress in AI, a field long notorious for its failure to deliver on its promises. “In the past couple of years it’s just completely exploded,” says Demis Hassabis, the boss and co-founder of DeepMind, an AI startup bought by Google in 2014 for $400m. Earlier this year his firm’s AlphaGo system defeated Lee Sedol, one of the world’s best players of Go, a board game so complex that computers had not been expected to master it for another decade at least. “I was a sceptic for a long time, but the progress now is real. The results are real. It works,” says Marc Andreessen of Andreessen Horowitz, a Silicon Valley venture-capital firm. In particular, an AI technique called “deep learning”, which allows systems to learn and improve by crunching lots of examples rather than being explicitly programmed, is already being used to power internet search engines, block spam e-mails, suggest e-mail replies, translate web pages, recognise voice commands, detect credit-card fraud and steer self-driving cars. “This is a big deal,” says Jen-Hsun Huang, chief executive of NVIDIA, a firm whose chips power many AI systems. “Instead of people writing software, we have data writing software.” In 2015 a record $8.5 billion was spent on AI companies, nearly four times as much as in 2010 The Economist Where some see danger, others see opportunity. Investors are piling into the field. Technology giants are buying AI startups and competing to attract the best researchers from academia. In 2015 a record $8.5 billion was spent on AI companies, nearly four times as much as in 2010, according to Quid, a data-analysis company. The number of investment rounds in AI companies in 2015 was 16% up on the year before, when for the technology sector as a whole it declined by 3%, says Nathan Benaich of Playfair Capital, a fund that has 25% of its portfolio invested in AI. “It’s the Uber for X” has given way to “It’s X plus AI” as the default business model for startups. Google, Facebook, IBM, Amazon and Microsoft are trying to establish ecosystems around AI services provided in the cloud. “This technology will be applied in pretty much every industry out there that has any kind of data—anything from genes to images to language,” says Richard Socher, founder of MetaMind, an AI startup recently acquired by Salesforce, a cloud-computing giant. “AI will be everywhere.” What will that mean? AI excites fear and enthusiasm in equal measure, and raises a lot of questions. Yet it is worth remembering that many of those questions have been asked, and answered, before.

The world is going to university But is it worth it? The world is going to university But is it worth it? “AFTER God had carried us safe to New England, and we had builded our houses, provided necessaries for our livelihood, reared convenient places for God’s worship and settled Civil Government, one of the next things we longed for and looked for was to advance learning and perpetuate it to posterity.” So ran the first university fundraising brochure, sent from Harvard College to England in 1643 to drum up cash. America’s early and lasting enthusiasm for higher education has given it the biggest and best-funded system in the world. Hardly surprising, then, that other countries are emulating its model as they send ever more of their school-leavers to get a university education. But, as our special report argues, just as America’s system is spreading, there are growing concerns about whether it is really worth the vast sums spent on it. University enrolment is growing faster even than demand for that ultimate consumer good, the car The Economist The modern research university, a marriage of the Oxbridge college and the German research institute, was invented in America, and has become the gold standard for the world. Mass higher education started in America in the 19th century, spread to Europe and East Asia in the 20th and is now happening pretty much everywhere except sub-Saharan Africa. The global tertiary-enrolment ratio—the share of the student-age population at university—went up from 14% to 32% in the two decades to 2012; in that time, the number of countries with a ratio of more than half rose from five to 54. University enrolment is growing faster even than demand for that ultimate consumer good, the car. The hunger for degrees is understandable: these days they are a requirement for a decent job and an entry ticket to the middle class. There are, broadly, two ways of satisfying this huge demand. One is the continental European approach of state funding and provision, in which most institutions have equal resources and status. The second is the more market-based American model, of mixed private-public funding and provision, with brilliant, well-funded institutions at the top and poorer ones at the bottom. The world is moving in the American direction. More universities in more countries are charging students tuition fees. And as politicians realise that the “knowledge economy” requires top-flight research, public resources are being focused on a few privileged institutions and the competition to create world-class universities is intensifying. In some ways, that is excellent. The best universities are responsible for many of the discoveries that have made the world a safer, richer and more interesting place. But costs are rising. OECD countries spend 1.6% of GDP on higher education, compared with 1.3% in 2000. "OECD countries spend 1.6% of GDP on higher education, compared with 1.3% in 2000" If the American model continues to spread, that share will rise further. America spends 2.7% of its GDP on higher education. If America were getting its money’s worth from higher education, that would be fine. On the research side, it probably is. In 2014, 19 of the 20 universities in the world that produced the most highly cited research papers were American. But on the educational side, the picture is less clear. American graduates score poorly in international numeracy and literacy rankings, and are slipping. In a recent study of academic achievement, 45% of American students made no gains in their first two years of university. Meanwhile, tuition fees have nearly doubled, in real terms, in 20 years. Student debt, at nearly $1.2 trillion, has surpassed credit-card debt and car loans. None of this means that going to university is a bad investment for a student. A bachelor’s degree in America still yields, on average, a 15% return. But it is less clear whether the growing investment in tertiary education makes sense for society as a whole. If graduates earn more than non-graduates because their studies have made them more productive, then university education will boost economic growth and society should want more of it. Yet poor student scores suggest otherwise. So, too, does the testimony of employers. A recent study of recruitment by professional-services firms found that they took graduates from the most prestigious universities not because of what the candidates might have learned but because of those institutions’ tough selection procedures. In short, students could be paying vast sums merely to go through a very elaborate sorting mechanism. If America’s universities are indeed poor value for money, why might that be? The main reason is that the market for higher education, like that for health care, does not work well. The government rewards universities for research, so that is what professors concentrate on. Students are looking for a degree from an institution that will impress employers; employers are interested primarily in the selectivity of the institution a candidate has attended. Since the value of a degree from a selective institution depends on its scarcity, good universities have little incentive to produce more graduates. And, in the absence of a clear measure of educational output, price becomes a proxy for quality. By charging more, good universities gain both revenue and prestige. What’s it worth? More information would make the higher-education market work better. Common tests, which students would sit alongside their final exams, could provide a comparable measure of universities’ educational performance. Students would have a better idea of what was taught well where, and employers of how much job candidates had learned. Resources would flow towards universities that were providing value for money and away from those that were not. Institutions would have an incentive to improve teaching and use technology to cut costs. Online courses, which have so far failed to realise their promise of revolutionising higher education, would begin to make a bigger impact. The government would have a better idea of whether society should be investing more or less in higher education. Sceptics argue that university education is too complex to be measured in this way. Certainly, testing 22-year-olds is harder than testing 12-year-olds. Yet many disciplines contain a core of material that all graduates in that subject should know. More generally, universities should be able to show that they have taught their students to think critically. Some governments and institutions are trying to shed light on educational outcomes The Economist Some governments and institutions are trying to shed light on educational outcomes. A few American state-university systems already administer a common test to graduates. Testing is spreading in Latin America. Most important, the OECD, whose PISA assessments of secondary education gave governments a jolt, is also having a go. It wants to test subject-knowledge and reasoning ability, starting with economics and engineering, and marking institutions as well as countries. Asian governments are keen, partly because they believe that a measure of the quality of their universities will help them in the market for international students; rich countries, which have more to lose and less to gain, are not. Without funding and participation from them, the effort will remain grounded. Governments need to get behind these efforts. America’s market-based system of well-funded, highly differentiated universities can be of huge benefit to society if students learn the right stuff. If not, a great deal of money will be wasted.

Banks? No, thanks! Today's graduates are forging completely new career paths. Read how Banks? No, thanks! Graduates are turning away from traditional banking roles, towards startups, tech giants and consultancies “AN INVESTMENT banker was a breed apart, a member of a master race of dealmakers. He possessed vast, almost unimaginable talent and ambition.” So wrote Michael Lewis in his 1989 book, “Liar’s Poker”. Mr Lewis charted the ascent into investment banking of the most talented graduates in the 1980s, a situation that still held true as the financial crisis struck in 2007. Then, 44% of Harvard’s MBAs landed a job in finance; 12% became investment bankers. Yet in the class of 2013 only 27% chose finance and a meagre 5% became members of Mr Lewis’s master race. "In 2007, 46% of London Business School's MBA graduates got a job in financial services; in 2013 just 28% The trend is the same at other elite business schools. In 2007, 46% of London Business School’s MBA graduates got a job in financial services; in 2013 just 28% did, with investment banking taking a lower share even of that diminished figure. At the University of Chicago’s Booth School of Business, the percentage of students going for jobs in investment banking has fallen from 30% in 2007 to 16% this year. Since the crisis, investment banks have culled the recruitment schemes through which they once hired swathes of associates straight from business schools. Instead, they rely more on recruiting the brightest undergraduates, in the belief that it is more productive—and better value—to develop cohorts of junior analysts in-house, rather than those with fixed ideas honed on expensive MBA programmes. It is not just that the supply of investment-banking jobs has diminished; so has MBAs’ enthusiasm for them. Once, they wanted nothing more than to climb a bank’s greasy pole, with the vast riches this promised. But regulation has stunted bankers’ bonuses and, perhaps as important, MBAs increasingly seek the flexibility to switch careers within a few years. Investment banks expect long-term loyalty, notes an MBA who did a spell in banking, whereas students see them as “a stepping stone into private equity or a hedge fund”. This is one reason why there has been a revival in business-school graduates’ interest in working as consultants. Almost 30% of students at the elite business schools now typically find work at consulting firms. In 2007, 23% of London Business School’s MBAs joined such organisations, last year 29% did. At Chicago the number has risen from 24% to 31% over the same period. Indeed four big consultants—McKinsey, Bain, the Boston Consulting Group and A.T. Kearney—accounted for 19% of the 472 students hired from Chicago’s MBA programme last year. This should not be surprising. Before investment banks were in vogue, consulting seemed the natural home for business-school students’ talents. The general-management focus of most MBA programmes, and their use of the case-study method, make them ideally suited to the job. An old consulting joke tells of the newly minted MBA sitting at his desk, demanding: “Bring in the first case!” "Almost 30% of students at the elite business schools now typically find work at consulting firms." Whereas banks expect MBAs still to be with them in five years, consulting firms ask recruits: “Whom do you see hiring you in five years?” Encouraging them to think about life beyond the firm has several benefits, consultants believe. It attracts the strongest candidates and it gives the firms a high-powered network of alumni who may become future clients. For MBAs, the exposure to different industries and the access to senior managers that a consulting job brings are a perfect base from which to launch a new career, says Julie Morton of Chicago Booth. That base salaries for those going into consulting are among the highest for any industry—a median of $135,000, compared with $100,000 for Chicagoans signing up with an investment bank—only makes the choice easier. Not just in it for the money Even if investment banks were still able to offer the financial rewards they once could, students’ priorities seem to be changing. Contrary to MBAs’ reputation as breadheads, in a survey by The Economist for our latest full-time MBA ranking (see article), less than 5% said that higher pay was their most important consideration when deciding to enroll at business school, far behind factors such as “to open new career opportunities” (58%) or “personal development” (15%). Sceptics might respond: they would say that, wouldn’t they? And MBAs’ ostensible disregard for the size of their pay packets must be put into context—a student from a top ten school in The Economist’s ranking will still earn an average basic salary of $118,000 immediately after graduation. Nonetheless, it is somewhat surprising given that they are also likely to have accumulated huge debts. Harvard reckons its MBA can cost $250,000 for two years’ board and study, and that is before forgone salary is taken into account. Another big beneficiary of MBAs’ loss of interest in banking is the technology industry. Of the top eight recruiters at INSEAD, a business school with campuses in France and Singapore, half now fall into this category: Amazon, Microsoft, Samsung and Google. (The other half were consultants.) The proportion of Chicago MBAs landing jobs at technology firms has risen from 6% to 12% since 2007. At Stanford, in the heart of Silicon Valley, it is close to a third. “Many students want to be part of an entrepreneurial environment and make an impact, to feel they are building and shaping something,” says Ms Morton. Tech firms and consultants both appeal to the growing number of students who want to gain the right experience to start their own business. A survey by the Graduate Management Admission Council, an association of business schools, found that although only 4% of MBAs have entrepreneurial experience when they enter their course, 26% say they want to start companies after they graduate. Competition for the best students is also coming from the non-bank financial-services sector, notably hedge funds and private-equity (PE) firms. Five years ago it was rare for such places to recruit MBAs straight from campuses. Instead they would often poach talent from the banks. But now several big schools, including Harvard and Wharton, are building formal recruiting ties with such firms. They are helped by the fact that many students have already had some finance experience before enrolling: 17% of Harvard’s latest MBA class came from a PE or venture-capital firm. Students from other backgrounds are also attracted by the dynamic atmosphere these outfits offer. Michel, a recent graduate of Kellogg School of Management, for example, says PE appealed to him and his peers over banking because the firms are smaller and the work more entrepreneurial and hands-on. If self-fulfillment is indeed the priority for millennial MBAs, then banks need to do some serious rebranding. “I have never heard anything about the corporate culture of investment banks that sounds like it’s an environment I’d like to work in,” says a business-school graduate who chose consulting. Added to this, MBAs also seem to have discovered a sense of moral purpose. At London Business School the fastest-growing student society is something called the “Net Impact” club, says Lara Berkowitz, a senior career adviser at the school. This means thinking about how to build careers that have a positive impact on the world around them, such as running ethical-investment funds or corporate-social-responsibility programmes. Attacked on so many fronts, banks are trying to fight back. Some are running campaigns urging graduates not to believe media stories portraying them as greedy or evil. Others are trying to lure recruits by persuading them they will help make the world a better place. Goldman Sachs’s job portal advertises opportunities to work on community projects alongside positions for analysts: “That’s why you come and work at Goldman Sachs, because you can make a difference in the world,” trills its recruitment video. A few banks are trying to change their culture, taking a tougher line on sexual harassment of female staff and advocating a healthier work-life balance, perhaps even allowing the odd work-free Saturday. For the business schools’ brightest and best, though, all this may not be enough. Where would you rather work? Banking and finance sector

Tech industry

Elsewhere

Adapt or die From music to cars, major industries are being disrupted by digital innovation. Watch how The music industry and the digital revolution From music and cars to hospitality—major industries are being disrupted by the latest wave of digital innovation The Disrupters The music industry has come a long way since Radiohead allowed fans to pay what they wanted for an album. But there is still plenty of digital disruption going on. Tech companies such as Kobalt provide an alternative route for musicians to find fans and manage their money—without having to rely on a record deal.

Workers on tap Find out why the rise of the on-demand economy poses difficult questions for workers, companies and politicians Workers on tap The on-demand economy is small, but growing IN THE early 20th century Henry Ford combined moving assembly lines with mass labour to make building cars much cheaper and quicker—thus turning the automobile from a rich man’s toy into transport for the masses. Today a growing group of entrepreneurs is striving to do the same to services, bringing together computer power with freelance workers to supply luxuries that were once reserved for the wealthy. Uber provides chauffeurs. Handy supplies cleaners. SpoonRocket delivers restaurant meals to your door. Instacart keeps your fridge stocked. In San Francisco a young computer programmer can already live like a princess. "The on-demand economy is small, but growing quickly" Yet this on-demand economy goes much wider than the occasional luxury. Click on Medicast’s app, and a doctor will be knocking on your door within two hours. Want a lawyer or a consultant? Axiom will supply the former, Eden McCallum the latter. Other companies offer prizes to freelances to solve R&D problems or to come up with advertising ideas. And a growing number of agencies are delivering freelances of all sorts, such as Freelancer.com and Elance-oDesk, which links up 9.3m workers for hire with 3.7m companies. The on-demand economy is small, but it is growing quickly. Uber, founded in San Francisco in 2009, now operates in 53 countries, had sales exceeding $1 billion in 2014 and a valuation of $40 billion. Like the moving assembly line, the idea of connecting people with freelances to solve their problems sounds simple. But, like mass production, it has profound implications for everything from the organisation of work to the nature of the social contract in a capitalist society. Baby, you can drive my car—and stock my fridge Some of the forces behind the on-demand economy have been around for decades. Ever since the 1970s the economy that Henry Ford helped create, with big firms and big trade unions, has withered. Manufacturing jobs have been automated out of existence or outsourced abroad, while big companies have abandoned lifetime employment. Some 53m American workers already work as freelances. The on-demand economy allows society to tap into its under-used resources The Economist But two powerful forces are speeding this up and pushing it into ever more parts of the economy. The first is technology. Cheap computing power means a lone thespian with an Apple Mac can create videos that rival those of Hollywood studios. Complex tasks, such as programming a computer or writing a legal brief, can now be divided into their component parts—and subcontracted to specialists around the world. The on-demand economy allows society to tap into its under-used resources: thus Uber gets people to rent their own cars, and InnoCentive lets them rent their spare brain capacity. The other great force is changing social habits. Karl Marx said that the world would be divided into people who owned the means of production—the idle rich—and people who worked for them. In fact it is increasingly being divided between people who have money but no time and people who have time but no money. The on-demand economy provides a way for these two groups to trade with each other. This will push service companies to follow manufacturers and focus on their core competencies. The “transaction cost” of using an outsider to fix something (as opposed to keeping that function within your company) is falling. Rather than controlling fixed resources, on-demand companies are middle-men, arranging connections and overseeing quality. They don’t employ full-time lawyers and accountants with guaranteed pay and benefits. Uber drivers get paid only when they work and are responsible for their own pensions and health care. Risks borne by companies are being pushed back on to individuals—and that has consequences for everybody. Obamacare and Brand You The on-demand economy is already provoking political debate, with Uber at the centre of much of it. Many cities, states and countries have banned the ride-sharing company on safety or regulatory grounds. Taxi drivers have staged protests against it. Uber drivers have gone on strike, demanding better benefits. Techno-optimists dismiss all this as teething trouble: the on-demand economy gives consumers greater choice, they argue, while letting people work whenever they want. Society gains because idle resources are put to use. Most of Uber’s cars would otherwise be parked in the garage. The truth is more nuanced. Consumers are clear winners; so are Western workers who value flexibility over security, such as women who want to combine work with child-rearing. Taxpayers stand to gain if on-demand labour is used to improve efficiency in the provision of public services. But workers who value security over flexibility, including a lot of middle-aged lawyers, doctors and taxi drivers, feel justifiably threatened. And the on-demand economy certainly produces unfairnesses: taxpayers will also end up supporting many contract workers who have never built up pensions. "Governments that outlaw on-demand firms are simply handicapping the rest of their economies" This sense of nuance should inform policymaking. Governments that outlaw on-demand firms are simply handicapping the rest of their economies. But that does not mean they should sit on their hands. The ways governments measure employment and wages will have to change. Many European tax systems treat freelances as second-class citizens, while American states have different rules for “contract workers” that could be tidied up. Too much of the welfare state is delivered through employers, especially pensions and health care: both should be tied to the individual and made portable, one area where Obamacare was a big step forward. But even if governments adjust their policies to a more individualistic age, the on-demand economy clearly imposes more risk on individuals. People will have to master multiple skills if they are to survive in such a world—and keep those skills up to date. Professional sorts in big service firms will have to take more responsibility for educating themselves. People will also have to learn how to sell themselves, through personal networking and social media or, if they are really ambitious, turning themselves into brands. In a more fluid world, everybody will need to learn how to manage You Inc.

Disruptive technology Today, technology forms part of almost every industry. Watch how it's changing the world of bionic limbs Bionic bodies Technology is disrupting industries, and changing people's lives Ground breaking technology is changing the industry of bionic limbs. Watch how in Future Works, from Economist Films Bionics, the enhancement of the human body using cutting edge technology...merging man and machine The Economist

Still a must-have MBAs remain surprisingly popular, despite the headwinds Still a must have It's no stranger to criticism, but the MBA is still hugely popular THE master of business administration (MBA) is no stranger to damning criticism. In the 1950s an influential report commissioned by the Ford Foundation lambasted the degree for being weak and irrelevant. In the 1980s Business Week reported that firms were bemoaning “the inability of newly minted MBAs to communicate, their overreliance on mathematical techniques of management and [their] expectations of becoming chairman in four weeks”. In the 2000s observers noticed that firms involved in corporate disasters, such as Enron and Lehman Brothers, tended to be run by alumni from prestigious business schools. 192,000 masters degrees in business were awarded in America in 2012, making it easily the most popular discipline among post-graduate students The Economist Yet the MBA remains hugely popular. Nobody knows exactly how many people study for the degree globally, but 192,000 masters degrees in business were awarded in America in 2012, making it easily the most popular discipline among post-graduate students. Worldwide 688,000 people sat the GMAT, the de facto entrance exam for MBA programmes, in 2014—although this is down considerably from 2008, when 745,000 took the test. Do you think MBAs are still a valuable degree to have? Yes, there will always be demand for MBA graduates

No, the MBA has failed to move with the times The reason for this drop is partly cyclical: people tend to apply to business schools during downturns in an attempt to shelter themselves from the economic storm. But the MBA faces many longer-term problems. The most pressing is tighter visa requirements in parts of the rich world. It may seem obvious that countries would wish to attract and retain the brightest young minds. But to the despair of business-school deans, both America and Britain—the two most popular destinations for foreign students—now place tougher restrictions on foreign students who want to stay and work in the country after they finish studying. In America foreign MBA graduates must find a firm to sponsor them for an H-1B visa, which entitles them to work for up to three years in the country, with the possibility to extend to six years. But the demand for these visas by far exceeds supply. America caps the number of H-1Bs at a total of 85,000 (the first 20,000 applications are reserved for students of a master’s degree). These are snapped up within days. In Britain graduates must find work even before their student visa expires if they want to stay in the country. Such restrictions are a particular problem for MBA programmes because many students choose a business school based on where they want to work after they graduate. Predictably, countries with a more welcoming attitude, such as Canada, are seeing applications from abroad rise. In contrast, the proportion of applicants interested in American schools fell from 83% in 2007 to 73% in 2015, according to GMAC, a business-school body. Canada and other countries do not just covet foreigners deciding whether to apply to American schools. The Canadian government has hired giant billboards in Silicon Valley reading “H-1B Problems? Pivot to Canada” to attract disgruntled foreign graduates. “If [American firms] can’t import the talent, they will export the jobs,” says Matt Slaughter, the dean of the Dartmouth College’s Tuck School of Business. “Unlike lawyers or doctors, the MBA qualification is transferable across borders.” "Western business schools are losing ground to those based in emerging economies" Such concerns highlight the fact that MBA graduates are still in demand among employers. At schools included in The Economist’s latest ranking of full-time MBA programmes, 89% of students found a job within three months of graduating. Their median basic salary is close to $100,000, an increase of 88% compared with their pre-study salaries. But some things have changed: banks, for instance, have become much less keen on MBAs since the financial crisis (perhaps because business-school alumni were often singled out as the culprits). Western business schools are also losing ground to those based in emerging economies. The share of students who send their GMAT scores to an Asian and Australasian business school—a good proxy for applications—has nearly doubled to 8.1% since 2007. Eight-and-a-half Asian business schools now make it into our ranking of full-time programmes (INSEAD has campuses in France and Singapore). These numbers are small, but they are likely to rise. China, in particular, plans to improve its business schools to meet demand for local managers. "China, in particular, plans to improve its business schools to meet demand for local managers" Established schools are also disrupting themselves. Over the past five years the number of master-in-management (MiM) degrees, which unlike MBA programmes admit students straight from university without prior work experience, has shot up. In America even schools such as Michigan, Duke and Notre Dame are embracing what was once considered a strictly European qualification. Despite covering much of the same ground as an MBA, MiM programmes also tend to be much cheaper. Every student who graduates from them is likely to be one fewer lucrative MBA candidate in the future. Not all business schools are affected in the same way. Students will always, it seems, want an MBA from Harvard, Chicago or London Business School. It is those with lesser reputations that face the toughest times. More than two-thirds of full-time programmes costing under $40,000 a year reported either flat or declining application numbers in 2015, according to GMAC. In contrast, most of those charging more than $40,000 said that their applicant pool had grown. No matter how few people an MBA programme can attract, few schools will consider dropping the programme altogether The Economist That suggests an oversupply of MBA programmes. Those taking an economics class in one of them might reasonably expect a shakeout. Alas, in the world of business schools such laws do not seem to apply. No matter how few people an MBA programme can attract, few schools will countenance dropping the programme altogether: a business school is defined by its MBA. As Stephen Hodges, the president of Hult International Business School, puts it: “Is a business school really a business school if it doesn’t offer an MBA?”

Working till 80 Just entering the world of work? Prepare to plan for a long, long working life Live long and prosper The 100-year life IT USED to be rare to live to 100. But the progress of science has meant that over the past two centuries every year has added three months to average life expectancy, at least in rich countries. If “The 100-Year Life” by Lynda Gratton and Andrew Scott is correct, half the children born in the rich world today are likely to live to 100. "Governments around the world are already struggling to support growing numbers of of retired people" Predicting future life expectancies is not easy. Some say there are fundamental limits to the continued extension of the average lifespan, and that further gains may become disproportionately hard to achieve. It is certainly true that reducing child mortality or cardiac diseases in middle age—the low-hanging fruit of increased longevity—have all been reached. How to look after all these elderly folk is a different problem. Governments around the world are already struggling to support growing numbers of retired people who depend on a shrinking working population. Eighteen OECD countries have raised pension ages. At the same time, workers are being asked to dig deeper into their own pockets. None of this is enough. Jane, born in 1998, will need to finance 35 years of retirement from 44 years of work The Economist The book suggests that even greater difficulties lie ahead. Looking at three hypothetical people, born in different eras, the authors map out the scale of the problem and what it might mean for a working life. Jack, born in 1945, worked for 42 years and was retired for eight. He had to save only a small percentage of his salary in a pension every month, which was topped up by the government and by his company. Jimmy was born in 1971 and has a life expectancy of 85. If he works for 44 years and retires for 20, he will be likely to need to save a whopping 17% of his income during his working life. From here the numbers grow more unsettling. Jane, born in 1998, will need to finance 35 years of retirement on the same 44 years of work. This will mean she must save 25% of her income—an improbable sum given other commitments such as mortgages, university fees and child care. The upshot of all of this continued extension of longevity is that working to 70 or even past 80 may not only become less unusual, but may be necessary in the future. While one can certainly quibble with the assumptions built into each of these scenarios, the scale of the problem is perfectly clear. It is going to be nearly impossible for workers to save enough money during the current span of a working life to fund retirements of increasing length. And if people have to work longer, it is unclear whether their education or the places where they work are geared to support such a future. "Too few people are considering the issue that if the world is unprepared, longevity will be both a gift and a curse" How best to adjust education so it prepares the youth of today for longer working lives and many different jobs? Online courses and retraining are becoming increasingly popular—and increasingly important—for this reason. But universities may need to rethink the model of handing a big dollop of education once, in youth, and forcing graduates to repay that cost over decades. If people must retrain throughout their lives, as well as save more for retirement, a costly, one-shot education at the start might become an unmanageable burden. The authors use a little too much management-speak. Even so, the book is useful. Too few people are considering the issue that if the world is unprepared, longevity will be both a gift and a curse.

Generation uphill Are millennials being given enough of a chance to reach their full potential? Generation uphill Millennials are the brainiest, best-educated generation ever. Yet their elders often stop them from reaching their full potential, argues Robert Guest SHEN XIANG LIVES in a shipping crate on a construction site in Shanghai which he shares with at least seven other young workers. He sleeps in a bunk and uses a bucket to wash in. “It’s uncomfortable,” he says. Still, he pays no rent and the walk to work is only a few paces. Mr Shen, who was born in 1989, hails from a village of “mountains, rivers and trees”. He is a migrant worker and the son of two migrants, so he has always been a second-class citizen in his own country. Mr Shen doubts that he will ever be able to buy a flat in Shanghai..."It's unfair," he says The Economist In China, many public services in cities are reserved for those with a hukou (residence permit). Despite recent reforms, it is still hard for a rural migrant to obtain a big-city hukou. Mr Shen was shut out of government schools in Shanghai even though his parents worked there. Instead he had to make do with a worse one back in his village Now he paints hotels. The pay is good—300 yuan ($47) for an 11-hour day—and jobs are more plentiful in Shanghai than back in the countryside. His ambition is “to get married as fast as I can”. But he cannot afford to. There are more young men than young women in China because so many girl babies were aborted in previous decades. So the women today can afford to be picky. Mr Shen had a girlfriend once, but her family demanded that he buy her a house. “I didn’t have enough money, so we broke up,” he recalls. Mr Shen doubts that he will ever be able to buy a flat in Shanghai. In any case, without the right hukou his children would not get subsidised education or health care there. “It’s unfair,” he says. There are 1.8 billion young people in the world, roughly a quarter of the total population. (This report defines “young” as between about 15 and 30.) All generalisations about such a vast group should be taken with a bucket of salt. What is true of young Chinese may not apply to young Americans or Burundians. But the young do have some things in common: they grew up in the age of smartphones and in the shadow of a global financial disaster. They fret that it is hard to get a good education, a steady job, a home and—eventually—a mate with whom to start a family. There are 1.8 billion young people in the world, roughly a quarter of the population The Economist Companies are obsessed with understanding how “millennials” think, the better to recruit them or sell them stuff. Consultants churn out endless reports explaining that they like to share, require constant praise and so forth. Pundits fret that millennials in rich countries never seem to grow out of adolescence, with their constant posting of selfies on social media and their desire for “safe spaces” at university, shielded from discomforting ideas. This report takes a global view, since 85% of young people live in developing countries, and focuses on practical matters, such as education and jobs. And it will argue that the young are an oppressed minority, held back by their elders. They are unlike other oppressed minorities, of course. Their “oppressors” do not set out to harm them. On the contrary, they often love and nurture them. Many would gladly swap places with them, too. In some respects the young have never had it so good. They are richer and likely to live longer than any previous generation. On their smartphones they can find all the information in the world. If they are female or gay, in most countries they enjoy freedoms that their predecessors could barely have imagined. They are also brainier than any previous generation. Average scores on intelligence tests have been rising for decades in many countries, thanks to better nutrition and mass education. "Over 25% of youngsters in middle-income nations and 15% in rich ones are NEETs" Yet much of their talent is being squandered. In most regions they are at least twice as likely as their elders to be unemployed. Over 25% of youngsters in middle-income nations and 15% in rich ones are NEETs: not in education, employment or training. The job market they are entering is more competitive than ever, and in many countries the rules are rigged to favour those who already have a job. Education has become so expensive that many students rack up heavy debts. Housing has grown costlier, too, especially in the globally connected megacities where the best jobs are. Young people yearn to move to such cities: beside higher pay, they offer excitement and a wide selection of other young people to date or marry. Yet constraints on the supply of housing make that hard. For both sexes the path to adulthood—from school to work, marriage and children—has become longer and more complicated. Mostly, this is a good thing. Many young people now study until their mid-20s and put off having children until their late 30s. They form families later partly because they want to and partly because it is taking them longer to become established in their careers and feel financially secure. Alas, despite improvements in fertility treatment the biological clock has not been reset to accommodate modern working lives. Throughout human history, the old have subsidised the young. In rich countries, however, that flow has recently started to reverse. Ronald Lee of the University of California, Berkeley, and Andrew Mason at the University of Hawaii measured how much people earn at different ages in 23 countries, and how much they consume. Within families, intergenerational transfers still flow almost entirely from older to younger. However, in rich countries public spending favours pensions and health care for the old over education for the young. Much of this is paid for by borrowing, and the bill will one day land on the young. In five of 23 countries in Messrs Lee and Mason’s sample (Germany, Austria, Japan, Slovenia and Hungary), the net flow of resources (public plus private) is now heading from young to old, who tend to be richer. As societies age, many more will join them. Politicians in democracies listen to the people who vote—which young people seldom do. Only 23% of Americans aged 18-34 cast a ballot in the 2014 mid-term elections, compared with 59% of the over-65s. In Britain’s 2015 general election only 43% of the 18-24s but 78% of the over-65s voted. In both countries the party favoured by older voters won a thumping victory. “My generation has a huge interest in political causes but a lack of faith in political parties,” says Aditi Shorewal, the editor of a student paper at King’s College, London. In autocracies the young are even more disillusioned. In one survey, only 10% of Chinese respondents thought that young people’s career prospects depended more on hard work or ability than on family connections. All countries need to work harder to give the young a fair shot. If they do not, a whole generation’s talents could be wasted. That would not only be immoral; it would also be dangerous. Angry young people sometimes start revolutions, as the despots overthrown in the Arab Spring can attest. Do you think millennials the world over are being given a fair shot? No, the challenges stacked against millennials are far too great

Yes, no previous generation has had it so good