Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

Digital Disruption and NIIT-isation

 

The blog has focused in the immediate past on the disruptions in education. The posts on National Education Policy discussed the contours and the likely impact of the new policy on educational disruption. These posts are available here and here. There was also a discussion at certain length on shifting nature of product bundles in education in this post. It is without doubt that education is somewhat ripe for disruption. Yet as everybody awaits education’s own Amazon moment, it is something interesting to find a piece on how Google plans to mark its foray in college education.

 

Google’s aim is to disrupt the college education not just in the US but across the world. Contrary to the education system in India, college system in US has strong barriers of access especially financially thus making many people drop out of the system. They end up without a graduation degree or earn one pretty late in life. The individualistic nature of life in the US also adds to the pressures on the students if they are not able to cope financially either through moonlighting or through working in their gap years. This makes a college degree relatively scarce so as to speak. Yet, for all the relative scarcity it is supposed to manifest, firms and recruiters always complain about disconnect between the education in the classrooms and the skills essential at the workplace. The recruiters often talk about the inability of the prospective employees to hone skills that are essential for day to day work thus earning bread and butter. Theory might give some foundation but in the absence of practice and experience, theory becomes disjointed. The new employees often find themselves unable to apply anything that they have learnt in college thus becoming disillusioned about the college degree.

 

Therefore, without doubt college degree needs an overhaul. Moreover, the college degree in countries like India is a continuum of bundle of subjects to be taken sequentially and cleared before being awarded a degree. There is no exit plan. It is either they get a degree or they do get a degree. In such a scenario, those students who have to opt out of the process for multiple reasons will find themselves having wasted their precious years in their lives doing or earning nothing. Those who finally go through the grill will end up becoming perhaps robots without applied thinking. They lack the requisite skills to do the tasks on hand and instead preferring to focus on the bird’s eye view which might be counterproductive.

 

A way out seems to be in the minds of Google as it prepares to launch its courses which are short term and focused on immediate industry requirements. These courses seek to target those in the audience that cannot afford longer period of education nor have the financial resources. These could opt for these short term courses usually around six months or so. Since these are likely to result in placements, the students would be assured of a certain economic rate of return. Google seems to promise placements, maybe its foray into the recruitment space something it can, given its sheer access to data. Google’s selling point seems to revolve around economic security without a college degree. While these courses and certificates obtained by clearing these courses are not going to come cheap, they definitely are way more affordable than the college degrees with a similar kind of placement profile post completion. There is a good possibility that Google might seek to bundle these later into a degree package that can be earned through flexibility.

 

Yet these kind of instances are not unusual except for the sheer probable reach of Google. In the late 1980s and the early 1990s, India was beginning to open up the IT sector. Yet the number of engineering graduates that were being churned was relatively low. The colleges themselves were few. The departments of computers science were just emerging in many colleges. It was at this stage, a number of training institutes mushroomed across the country offering training in basic and advanced IT subjects. Since parents felt knowledge of computers was something imperative for children they did not mind spending money to send their kids to these institutes. While these bridged the gap between understanding of computer technology and practice, these were just the beginning of the IT field. Schools as such had no computer training facilities, so these could fill that gap. For many professionals, these could offer short insights into a month or two courses on basics of IT. It was in this environment that India saw the rise of NIIT, Aptech among others.

 

These institutes offered courses part time in nature extending to a year and beyond with some certificates or diplomas though unrecognized but nevertheless sufficient to meet the needs of the industry. NIIT or Aptech were basically the answer to the supply-demand gap to the problem of trained and skilled manpower in the Indian IT industry till such time the formal education system churned the graduates out. By the late 1990s, many of those who pursued courses in these institutes like NIIT or Aptech found themselves in good positions in the industry. While the career mobility perhaps did hit a glass ceiling at some point, the courses did offer considerable utility to both industry and employees. They were supplementing the college education rather than substituting in totality. Yet in the opportunity that emerged India lost the golden chance to reform the education system from the static, elephantine movement to a dynamic equine moves. It is a different that many post graduate courses in management have basically evolved as some sort of NIIT or Aptech. Thus in practice Indian education has moved towards NIIT-isation with a strong lock in and without imparting skills and knowledge that is essential for transformation into a practitioner. They still venture into abstracts and lack the agility. There is also short sighted approaches that has affected the industry.

 

The college education is now shifting from monolith 3 year or 4 year lock in to an annual exit plans with provision for re-entry. What could however be taken forward would be to link with the subjects or skill sets that students manages to learn. The certificates rather than be of yearly basis or so must focus on individual subjects or skillsets that gives them some formalisation to what they have learnt. Accumulating certain amount of credit points from each of these individual subjects would give them an yearly certificate or diploma which through three or four years as the case might be lead to degree or later a post graduate degree. The system is ripe for disruption, is heavily regulated, what might end up is some player emerging with a plan to meet the shortfall in industry demand and walking away with it, the degree being rendered obsolete. The education system must be proactive, take two steps ahead of industry rather than being reactive which occurs at the speed of the snail.

Comments

Popular posts from this blog

Decision Making as Output and Bounded Rationality

The Economics Origins of BCG Matrix

People and the Third Wave of Chinese Virus