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Economic Outlook: Koding For Kidz

A recent NYT article highlight’s a public private partnership (PPP) aimed at exposing children in computer programming at a young age:

Since December, 20,000 teachers from kindergarten through 12th grade have introduced coding lessons, according to Code.org, a group backed by the tech industry that offers free curriculums. In addition, some 30 school districts, including New York City and Chicago, have agreed to add coding classes in the fall, mainly in high schools but in lower grades, too. And policy makers in nine states have begun awarding the same credits for computer science classes that they do for basic math and science courses, rather than treating them as electives.

It is a stark change for computer science, which for decades was treated like a stepchild, equated with trade classes like wood shop. But smartphones and apps are ubiquitous now, and engineering careers are hot. To many parents — particularly ones here in the heart of the technology corridor — coding looks less like an extracurricular activity and more like a basic life skill, one that might someday lead to a great job or even instant riches.

The spread of coding instruction, while still nascent, is “unprecedented — there’s never been a move this fast in education,” said Elliot Soloway, a professor of education and computer science at the University of Michigan. He sees it as very positive, potentially inspiring students to develop a new passion, perhaps the way that teaching frog dissection may inspire future surgeons and biologists.

But the momentum for early coding comes with caveats, too. It is not clear that teaching basic computer science in grade school will beget future jobs or foster broader creativity and logical thinking, as some champions of the movement are projecting. And particularly for younger children, Dr. Soloway said, the activity is more like a video game — better than simulated gunplay, but not likely to impart actual programming skills.

Some educators worry about the industry’s heavy role: Major tech companies and their founders, including Bill Gates and Facebook’s Mark Zuckerberg, have put up about $10 million for Code.org. The organization pays to train high school teachers to offer more advanced curriculums, and, for younger students, it has developed a coding curriculum that marries basic instruction with video games involving Angry Birds and hungry zombies.

The lessons do not involve traditional computer language. Rather, they use simple word commands — like “move forward” or “turn right” — that children can click on and move around to, say, direct an Angry Bird to capture a pig…The use of these word-command blocks to simplify coding logic stems largely from the work of the Massachusetts Institute of Technology Media Lab, which introduced a visual programming language called Scratch in 2007. It claims a following of millions of users, but mostly outside the schools.

Then, in 2013, came Code.org, which borrowed basic Scratch ideas and aimed to spread the concept among schools and policy makers. Computer programming should be taught in every school, said Hadi Partovi, the founder of Code.org and a former executive at Microsoft. He called it as essential as “learning about gravity or molecules, electricity or photosynthesis.”

Among the 20,000 teachers who Code.org says have signed on is Alana Aaron, a fifth-grade math and science teacher in the Washington Heights neighborhood of Manhattan. She heard about the idea late last year at a professional development meeting and, with her principal’s permission, swapped a two-month earth sciences lesson she was going to teach on land masses for the Code.org curriculum.

Computer science is big right now — in our country, the world,” she said. “If my kids aren’t exposed to things like that, they could miss out on potential opportunities and careers.

Introducing kids to computer programming at a younger age is a great idea. The U.S. controls about 40% of the $960 billion global computer software / services market. Furthermore, some of the fastest growing sectors in the U.S require computer programming skills (especially when you consider [non]tradeable goods). As the world becomes more connected via internet penetration–the number of global internet users is set to surpass 3 billion people by years end–computer programming will only become a more important professional skill.

Learning computer programming may well be more effective at a young age. I have had many people try to teach me computer programming, and one common theme between teachers has been comparing  learning coding to learning a foreign language. Many people believe children can more effectively learn foreign languages than adults, perhaps the same is true of coding?

The purpose of early exposure is not, as some dissenters misinterpret, to have children producing complex codes and programs. By making programming more fun and accessible while nailing down the basics, kids will be more confident in their ability to develop advanced programming skills later in life if they so choose.  

Teaching our kids computer programming skills is important for staying competitive in a field that is currently dominated by the U.S. Other countries are teaching computer programming skills; the U.S. cannot afford to sit still or we will be passed by competitors.

In a global economy where many low skill jobs have fled to lower wage countries, the U.S. needs to maintain it’s competitive edge in this growing industry. Leveraging private sector money and expertise should make this important educational reform even more affordable and effective.

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Economic Outlook: Public-Private Partnerships, for Better or for Worse

The following blog combines two previous topics discussed here at NN–Public-Private Partnerships (PPPs) and State subsidies to private corporations. While both technically represent a “pubic-private partnerships” (both public and private money going towards the same goal), that is where the similarities end.

Public-private partnerships, as they are intended, leverage public (tax-payer) money to raise private sector money for a cause. These partnerships often raise money for innovative purposes, in order to help cultivate new industries which indirectly lead to future jobs and tax-revenue. Universities, as centers of R & D and learning / training, also have a role to play in PPPs teaching people the skills needed to take part in this innovation. An example of a PPP that functions this way are President Obama’s recently announced manufacturing institutes.

With less than two weeks till his State of the Union address on Jan. 28, Mr. Obama hastened to make good on a pledge from last year’s speech, announcing the creation of a high-tech manufacturing institute aimed at creating well-paying jobs.

Speaking to 2,000 students at North Carolina State University, which is leading a group of universities and companies that established the institute, Mr. Obama said it was the kind of innovation that would reinvigorate the nation’s manufacturing economy.

This is the first of three such institutes the White House plans to announce in the coming weeks. It will be financed by a five-year, $70 million grant from the Department of Energy, which will be matched by funding from the consortium members, including the equipment maker John Deere and Delphi, an auto-parts maker.

The institute will use advanced semiconductor technology to develop a new generation of energy-efficient devices for automobiles, consumer electronics and industrial motors. Earlier Wednesday, Mr. Obama toured a Finnish company, Vacon, that makes drives used to control the speed of electric motors, to increase their energy efficiency.

Confessing that there was “a lot of physics” in the company’s presentation, the president seemed most interested in which of the components were made in the United States.

The announcement Wednesday of the new manufacturing institute showcased the White House’s determination to press ahead with jobs programs, with or without Congress. Mr. Obama said he was determined to make 2014 “a year of action.”

But it also laid bare the limits of Mr. Obama’s authority, since Congress has stymied his more ambitious proposals that require legislation. In last year’s State of the Union address, the president announced a $1 billion plan, modeled on one in Germany, to create a network of 15 institutes that would develop new industries.

But setting up 15 institutes would require congressional authorization. So last year, Mr. Obama narrowed his focus to establishing three institutes using existing funds and executive authority. At the same time, he increased his long-term goal to 45 institutes over 10 years, while acknowledging this would require congressional action.

To be clear, PPPs are not a call for charity–they represent mutually beneficial and sustainable economic arrangements. Businesses need future employees and customers, governments need non-dependent tax payers, a Universities future success is linked to it’s graduate employment rate, and people need jobs. If these projects prove successful, it will be difficult for congress to block the programs expansion.

Subsidizing individual corporate initiatives, on the other hand, does not lead to many of the positive externalities associated with PPPs. Unlike traditional PPPs, it does not give the government any ownership of a project–a company is free to leave for greener pastures if it receives a better offer after the terms of an agreement end, leaving a municipality with nothing but a large bill. Furthermore, this practice represent one aspect of a “race-to-the bottom” that pits the private sector against workers and society as a whole:

Boeing is a company that pits state governments against one another to compete for larger subsidies and forces communities into a race to the bottom to see who can fight unions and lower wages the fastest. It is a prime example of 21st century business in the United States. As a result of these tactics, American workers, both unionized and independent, have little choice but to accept the lowered living standards their employers offer as conditions for their doing business.

This practice has become common. In the last year alone, 13 states granted corporate subsidy packages of over $100 million to companies like Toyota, Yokohama Rubber, Boeing and MetLife. Many of these subsidies are not for job creation but for job relocation — to lure business over to one state at the expense of its friends and neighbors.

The story of Boeing is an example of how ruthlessly U.S. businesses use the needs of some workers to justify lowering the standards of others, to the ultimate detriment of both.

Boeing’s strategy is a profitable one. It saves the company money, reduces wages and benefits for workers and ultimately absolves the company of any financial responsibility to take care of its retirees. As a result, production workers, regardless of their state, are left with a smaller slice of a bigger pie. This is, of course, the point: “Now that we have internal competition (among production sites), we’re going to get much better deals,” Boeing CEO Jim McNerney explained in May.  The deals aren’t only on the price of labor, but on the size of subsidies, which states and municipalities must fit into their budgets by either raising taxes or cutting services.

Unless American workers miraculously rediscover collective bargaining or begin to lay claims on the government to promise what organized labor once provided, then their lives will continue to be shaped by companies like Boeing. Their wages will be taken out of their pockets, their tax money out of their schools and roads…

These initiatives, unlike PPPs which are aimed at innovation and job creation, only benefit a single corporation. Furthermore, these projects often amount to job relocation, as opposed to job creation. There are many good reasons for subsidies to exist; for example, subsidies can help promote “infant industries” and to reward positive externalities. However, giving tax-payer money to already profitable companies in order to lure jobs from one municipality to another is not one of them. Private sector job creation is not charity, it is a cost of doing business that companies would face regardless of a subsidy.

The problem is this country has empowered corporations at the expense of workers and societies as a whole. Don’t believe me? There is ample evidence of the different “recoveries” experienced by the “haves” and the “have nots” in America (spoiler: the wealthiest have done great post-recession, while masses have seen declining wages and standards of living). There are no easy fixes to this reality; only by championing workers rights, increasing minimum wages, and ending the municipal “race-to-the-bottom” (perhaps by creating a federal oversight board with the exclusive power to negotiate private-sector subsidies, based on needs-based C-B analyses) can we hope to take America back for the average working man / woman. PPPs can play a positive role in this transition, if they are used to spur new investment and industry. On the other hand, taking money out of public programs and giving it to private corporations will only exacerbate the divergence between the “haves” and the “have-nots”.

It is true that we face a depressed labor market; in such an environment, people are afraid to speak up in fear of losing whatever job they do have. On a larger scale, politicians are unwilling to take any stand that may be met with retaliation by corporate interests. This fear is being used against the American public by corporations to further push down their costs even as they realize record profits. If we can overcome this fear, and challenge the bellicose rhetoric of private sector interests, we can begin to realize a redistribution of wealth which would benefit not only individuals but our economy as a whole.

It is up to Americans to decide what role we want the private sector to play in our economy, and elect leaders who will fight for those goals. Will we support corporations that share in the costs of sustainable human development, or will we continue to reward corporations that value short-term profits above all else?


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Transparency Report: Notification, You Have 5 Billion New FB Friends; The Human Right To Internet Access

At the beginning of my internship at the UNDP, I was lucky enough to get the chance to volunteer at and then attend the ECOSOC Partnerships forum. I was assigned to write a few blogs for the event, among a number of other blogs I have written about events at  the UN which for some reason I have never shared on NN. Perhaps someday I will release the rest of the “lost UNDP blogs”, but that day is not today. Here are notes from the event Policy Dialogue: “The Changing Face of Technology and Innovation” (full blog):

The second policy dialogue at the ECOSOC youth forum focused on how technological innovations in recent years have helped bridge the “digital-divide” between developed and developing countries. While the gap has not been fully closed, partnerships between the private sector, governments, non-governmental organizations and civil society groups have helped identify challenges and opportunities in the developing world. By creating differentiated products at lower costs, private companies can gain access to new markets while simultaneously empowering the people in those markets.

Internet access is considered one of the great technological advances of our time. Internet access empowers people; the possibilities are constantly evolving and literally endless. It is an essential component of “E-Governance”, which includes the dissemination of information and a more inclusive and democratic government agenda-setting process. With a greater push for accountability and inclusiveness mechanisms in the Post-2015 Development Agenda, internet access, bolstered by innovations in mobile technology, has become an increasingly important tool for achieving sustainable human development.

But not enough has been done to make internet access affordable for a large portion of the world’s population. According to Mr. Tuli, 3 billion people have mobile phones but no internet access. This is not because of a lack of electricity or communication networks (as evidenced by the fact that they do have cell phones), but because they are priced out of the market. Mr. Tuli went on to call basic internet access a “human right”, to resounding applause from the hundreds of participants in the ECOSOC chamber.

While mobile technology was originally thought of as an educational tool, it has since evolved beyond that (although mobile education is still a proposed root for overcoming education deficits in Least Developed Countries (LDCs)). E-Governance can help disseminate information and promote inclusive governance, creating an enabling environment for sustainable human development. Healthcare providers can connect to information and expert advice in ways that can save lives. E-Finance can help provide capital in a much cheaper and convenient way to previously isolated groups, unlocking the entrepreneurial spirit in the developing world (and making such endeavors potentially much more profitable). Even people who are off traditional power grids (the least developed places in the world without basic infrastructure), mobile renewable energy generators and wireless internet capabilities can help bring ICTs virtually anywhere in the world.

Mobile technology penetration can be very rapid. Competition between private sector actors can drive prices down to affordable levels, and in some cases subsidies can help. Mr. Ogutu told the story of mobile phone penetration in Kenya; 5 years ago there were 20,000 users, today there are over 30 million users. This was made possible by M-Kopa, a company that utilized E-finance to provide pay-as-you-go mobile solar powered electricity to poor people who are not on a conventional power grid. Financing—secured through PPPs—allowed the founders of M-Kopa turn their vision into reality.

The narrative on bringing internet access to the least developed areas of the world continues a few months later. Not surprisingly, behind the initiative is a large-scale public-private partnership, with publicity magnet Facebook at its core (original article):

Mark Zuckerberg, chief executive of Facebook, announced the launch of Internet.org Wednesday, a project aimed at bringing Internet access to the 5 billion people around the world who can’t afford it. The project is the latest initiative led by global-communications giants to combat market saturation in the developed world by introducing the Internet to remote and underprivileged communities.

“The goal of Internet.org is to make Internet access available to the two-thirds of the world who are not yet connected and to bring the same opportunities to everyone that the connected third of the world has today,” Zuckerberg said.

“There are huge barriers in developing countries to connecting and joining the knowledge economy,” he added. “Internet.org brings together a global partnership that will work to overcome these challenges.”

The project will develop lower-cost, higher-quality smartphones and deploy Internet access in underserved communities, while reducing the amount of data required to surf the Web. Other founding partners include Samsung, Qualcomm, Ericsson, MediaTek, Nokia and Opera.

Facebook and other tech giants, of course, have a significant financial stake in expanding in the developing world. With tech companies reaching market saturation in the United States, countries in Latin America and Africa, for example, offer a big opportunity to attract a steady stream of new users, whose data can be mined by advertisers.

Connecting more people globally has important implications for how people organize their lives, said Patrick Meier, co-founder of the Harvard Humanitarian Initiative’s program on Crisis Mapping and Early Warning. Social media has become a lifeline to people affected by earthquakes, floods and conflicts in the developing world, he added.

In places where the state is limited, Meier added, the Internet becomes a way to make up for services the government fails to provide. “When the state is not there, when you talk about limited statehood, you get a void,” he said.

In addition to acting as a substitute for the state in the context of “bad governance” / conflict / crisis environments, mobile technology should be a tool utilized by the state to promote inclusive and indiscriminate human rights based governance for sustainable human development. ICT connects people, enabling social accountability (people claiming their rights) by overcoming collective action problems. There are also myriad standard of living benefits associated with bringing ICT in the developing world–micro-financing, healthcare, education, media, etc. (OK maybe I am a little biased, I want those 5 billion readers too 😛 ).

Furthermore, by utilizing open-source technology and the collective will and creativity of 5 billion people facing similar problems, innovations in one part of the developing world can be adapted to the local needs of other developing regions. This would further expedite the global development process–open-source technology should be a core feature of the global internet connectivity push.

The possibilities are literally endless, as the utility and functions of the internet continue to evolve at ever faster rates. It should also be noted that new technological capabilities in LDCs will necessitate new policies, laws and oversight mechanisms to ensure gains are shared fairly. However, since these technologies are only new to certain regions, digital accountability mechanisms already exist for these regions to build on.   

I cannot stress enough how important bringing mobile ICTs to least developed countries is for sustainable human development, nor can I know how the technology will evolve in the future. Providing access to mobile information and communications technology empowers people, creating an enabling environment for a multitude of interrelated development objectives. These positive forces will naturally synergize, empowering people to challenge power-imbalances and hold powerful groups accountable for their human rights obligations.

ICTs are a natural fit for a large scale public-private-partnership (PPP). Companies can provide most of the start-up capital and technical know-how. Governments can create an education campaign about the benefits of ICTs and how to use them, while also guaranteeing companies market access and security of any capital / infrastructure installations (extremist groups will not like this idea as closing government service gaps will restrict their ability to buy goodwill and recruit new members). As ICTs help sustain the development process, new markets will emerge for communications companies to sell their products and services. This means more profits for companies, more tax revenue for governments, and a higher standard of living for people in LDCs. Not to suggest vested interests will not try to play spoiler (my regular readers by now know this is not the case), but overall a this is a win-win-win partnership.

Due to the indisputable importance of ICTs for sustainable human development, internet access should become an internationally recognized human right. Human rights obligations are primarily the responsibility of the state; in this case however, it seems that states have a willing and capable partner in the private sector. I will continue to keep the NN community up-to-date on this potentially-world-changing initiative.


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Economic Outlook: European Youth Unemployment, Public-Private Partnerships and the “Magic” of Fiscal Stimulus

Indepensible Taxing and Spending

Original Articles:

Reuters

“European leaders agreed on new steps to fight youth unemployment and promote lending to credit-starved small business on Thursday after deals on banking resolution and the long-term EU budget gave their summit a much needed lift.

The 27 leaders resolved to spend 6 billion euros over the next two years to support job creation, training and apprenticeships for young people, and to raid unspent EU budget funds to keep the effort going thereafter.

Critics say the money is a drop in the ocean with more than 19 million people unemployed in the EU, and more than half of all young people under 25 without a job in Spain and Greece.”

“Separately, negotiators for the European Parliament, the European Commission and EU member governments clinched a deal on a 960 billion euro ($1.25 trillion) seven-year budget for the bloc for the period 2014-20, ending months of squabbling.”

“The leaders unanimously endorsed the agreement, EU Council President Herman Van Rompuy said, overcoming a last minute snag over Britain’s rebate, which will remain intact. The European Parliament must approve the deal next month so the new budget can take effect next January.

The banking resolution agreement designed to shield European taxpayers from having to foot the bill for rescuing troubled banks will be implemented on a national basis from 2018.

It lays the ground for a single system to resolve failed banks in the euro zone and the 27-nation EU, the second stage of what policymakers call a European banking union, meant to strengthen supervision and stability of the financial sector.”

“Most of Europe has been either in recession or on the brink for the past three years, while unemployment has steadily risen. EU unemployment now stands at 11 percent, the highest since records began, with youth unemployment a particular problem, especially in Spain, Greece, Italy, Portugal and Cyprus.

The new EU fund will back a “youth employment initiative” that would offer people under 25 a promise of a job, training or apprenticeship within four months of leaving education or becoming unemployed.

Politicians and sociologists are worried that extended unemployment for young Europeans will lead to a “lost generation” that never gets fully incorporated into economic life, with deep psychological and financial implications.”

NYT

“The European Union may soon have a new budget — including the first cut to spending in its history — after a surprise breakthrough deal on Thursday.”

“The budget still needs final approval by the European Parliament, but that is looking more likely thanks to this agreement. The European Parliament president, Martin Schulz, called the deal “acceptable” and said he was optimistic that he would have a majority of Parliament members backing it at a vote next week.”

“Separate from national spending, the budget is designed in part to balance out the economic development of its members by giving funding to poorer countries. The European Union has funded thousands of infrastructure and capital projects over the years, from the installation of broadband networks to the upgrade of road networks.

The budget also includes items meant to generate economic growth, like research and development and a new, more accurate satellite navigation system. It also funds regulation and administration in such areas as mergers and competition, the review of national budgets to ensure they do not include excessive deficits, and banking supervision.

If the European Union fails to get a seven-year deal passed by Parliament before the end of the year, the bloc would have to revert to annual budgets, which would make long-term planning difficult.”

It seems as if the leaders of the European Union–much of which has been mired by historically high unemployment and stagnant growth / recession since 2008–are finally realizing that greater fiscal coordination is needed in order to sustain the Monetary Union.

While it is true that the 7 year, 960 billion euro budget proposal represents an austerity program, in reality coming to an agreement creates the certainty and stability needed for businesses to make long term decisions (and thereby stimulating the economy more as opposed to hoarding cash for instance). It also allows for targeted long term spending, as opposed to a year-by-year budget which would complicate meaningful long-term investments in human and physical capital.

By concentrating on lower income European countries, the European Union will be picking the “low hanging fruit”, realizing a greater return on investment as these countries grow at faster rates. As these countries fully modernize, social spending will go down and new markets will open up, stimulating aggregate demand in the European Union as a whole.

In countries where such “low hanging fruit” does not exist, more specialized growth-targeting projects will help Europe’s higher income countries stay competitive in cutting edge fields going forward.

The plan also sets aside funding for administrative expenses, which will be important in ensuring compliance and accountability from the financial industries / MNCs (which is itself an important aspect in correcting Europe’s fiscal outlook). Managing too-big-too-fail financial institutions and tax evasions / illicit financial flows will be the two most important regulatory steps the EU can take to hold the ultra-wealthy accountable for their role in the current economic crisis and help prevent future crises.

Targeting youth unemployment has particularly significant implications for sustainable growth in Europe. While it is true $ 6 billion is not a lot of money, I believe that this small “drop in the bucket” can have a large impact. The reason for this optimism is the ability to augment public spending through “public-private partnerships” (PPP).

Public-private partnerships are particularly suited for targeting youth unemployment. The private sector is uniquely positioned to give insight into exactly what skills young people will need for the jobs of today and tomorrow. The government is uniquely positioned to implement these programs into school curricula and unemployment conditions–targeting non-workers with skills needed to obtain jobs. The question is how much money can $6 billion in public investment leverage in private investment?

While there is no exact formula, at the ECOSOC Partnerships forum this past April, Mr. Chirstian Friis Bach, the Minister for Economic Development Coordination in Denmark, told the audience (including myself) how he was able to leverage over 500 million euros in private money from 40 million euros in public investment for various sustainable development initiatives. While the scale is not the same (40 million v. 6 billion initial public investment), this still suggests that leveraging a few hundred to a thousand percent in private funding is not an unrealistic expectation–especially considering the importance of Europe’s youth as a future employment pool / consumption engine, and evidence of large cash reserves held by MNCs.

As the yearly ECOSOC forum in Geneva kicks off July 1st, a golden opportunity presents itself to frame this youth-employment initiative as a large scale public-private partnership. If that $6 billion turns into $60 billion, suddenly that “drop in the ocean” represents a much more meaningful investment.

There is also the importance of proving to employers that the youth is ready and able to work. Employers may believe young people are unemployed because they are lazy or incompetent, leading to the passing over of an otherwise qualified younger person for an older more experienced worker–youth uneployment becomes a self-fulfilling prophecy. If the youth employment program can show that young people indeed posses the skills, passion, energy and innovative ideas needed to be productive workers, then young people will be able to shed the negative stigmas associated with unemployment.

As youth salaries and consumption increase aggregate demand, businesses will have to expand to meet that demand, creating even more jobs which would be more likely to be filled by younger candidates (an example of how the fiscal multiplier is currently >1, as public investment will not crowd out private investment but rather they are be mutually reinforcing).

The Great Recession has turned into a full blown economic Depression throughout much of Europe. To address this, fewer public funds must be channeled in a more concentrated way and supplemented by private funds. Governments bailed-out large private sector actors in the wake of the Great Recession because they understood the interdependence of people, government and the private sector. Now it is time for the private sector to return the favor by augmenting sustainable development initiatives.

To be clear, PPPs are not a call for charity–they represent mutually beneficial and sustainable economic arrangements. Businesses need future employees and customers, governments need non-dependent tax payers, and young people need jobs.