Australia is moving toward the student paying more and more of the cost of education. This means the student accepts more of the liability for the choice of discipline and its relevance toward increased salary and opportunity in the labour market. Unfortunately education is still stuck in the post World War II cycle with three and four year degrees that are too long for the current labour and investment cycles. In essence the length of the tertiary education process is forcing students out of the economy, leaving them indebted, and having investment cycles exhausted before the student is released into the labour market.

Risk, Liability and Private Education

With education becoming increasingly privatized in Australian with the increasing cost of HECS and more private tertiary education campuses - a new factor enters into education decisions. This is the liability for the cost of education an individual bears which must be compared to the potential increase in salary and opportunity in the labour market.

The United States has a great private system with greater costs being incurred by students. This is despite State subsidy for many schools. The finaid.org website contains a college cost projector to determine the costs related to an education. The projector expects an inflation rate of 8% on costs, and $12,000 a year for public institutions and $27,000 a year for private institutions.

These costs for a private institution for a four year degree leave the student with a liability of $140,000. This is a huge liability in such a volatile labour and investment market, after all it is investment which ultimately drives the demand for new labour.

The internet boom lasted eight years from 1994 until 2000. For a computer science student to invest $140,000 in themselves for a return of having two years in a high demand labour sector means that the education is too long to truly take advantage of the business and investment cycle. The student is left heavily indebted, and with a small timeframe of opportunity to leverage their scarce skills for a return in the form of a high salary.

Post World War II Industrialism

After World War II, the Australian government made a pact with big business, they would protect the markets in return for companies taking on wider responsibilities to workers. This worked well for the capital intensive industries, such as steel, that had long capital intensive investment cycles. BHP did not become the "Big Australian" for nothing. Coupled with this compact was the many nationalized banks at the State level which guaranteed access to capital for the heavy industries which required large capitalisation.

In this environment, a graduate coming out of the University of Sydney or the University of New South Wales after studying three years for a Mechanical Engineering degree would have every expectation - and right - to expect to be employed by BHP for the rest of their working life. Additional training, even post-graduate work, would be done through the company and the remuneration would match seniority and level of training.

Globalisation has changed this. Capital flows are much faster now, as is technological innovations. One of the great benefits of the internet boom was the commoditization of the underlying processes. Essential tools such as compilers, tcp standards, http standards, operating systems and PC hardware all commoditized. With the adoption of standards and opensource software the cost dropped to near zero. One the back of this was a surge of investment and a corresponding surge in innovation and startups.

Up and Down With the Investment Cycle

The internet boom devalued the formal three year education. Since software and IT skills were in such scarcity, a hiring meritocracy formed, and those that proved themselves capable took advantage of inflating salaries and benefits. While this gave new opportunities to those willing to self-train, it showed the limitation and aging of the current tertiary education processes. Despite the internet boom's epicentre being in the US and the US having a strong private education system, the American tertiary institutions have not adapted to the new needs required by private industry.

An argument may be that people go to University to become well rounded people? I do not believe that for a second. When studying engineering, I only did a couple of subjects outside of engineering, the so-called general electives. The curriculum for engineering remained 95% technical - hardly the basis for a well-rounded person. The fact of becoming more educated and more knowledgeable alone is a virtue, and this is essential to the advancement of wider society, but the current tertiary courses are not for creating well-rounded individuals.

The fact remains that most people use tertiary education as a means to advance their earning capacity and seek advantage in a competitive labour market. For this purpose education would be better served by matching the business and investment cycle. This is not to say that it would be of benefit for all disciplines. Many could remain at the current three and four year courses, but the technical degrees would make students more educated by smaller courses of more focused specialisation.

The Hastening

Business in the technical disciplines is divided by project. Other than in large projects, it is rare that a project extends beyond eighteen months. Many can be as small as three months. In this project an individual will specialise heavily in a subject, learning that subject as quickly as possible in order to complete the project. Once finished, the next project will most likely be an entirely different discipline that requires a new form of specialization.

For instance a high-tech position might require that an individual write the software for an ITS Communications Driver, the next will require the production of maps to determine flooding impacts, the next will require the QA/QC for a SCADA system, and the next the writing of an Accounts-Payable/Accounts-Receivable website system. All these projects and their required specialisations can occur within the same year.

For this kind of work, a smaller, faster degree would be sufficient. One that specializes heavily in a discipline, costing the student less and getting them into the labour market faster. This would make the student an economic actor after one year rather than removing them from the economy for three or four years. This would also make the liability the student absorbs lower, one year of education is more affordable than three or four years.

Another benefit is that it would match the investment cycles of modern business much closer. In a six year boom, a student could study for a year and still take part in the remaining five years of the boom. Currently in the United States the biotech industry have been getting a disproportionate amount of investment - one company with "nano" in their name watched their share price jump even though they do nothing related to nanotechnology. A one year degree would get an individual into that investment cycle quicker, and with less liability than the need for a three year degree.

Retraining

Many workers become over-specialized in one area. Their experience in the industry and company can essentially cement them in their despite their loss of interest in the industry and skills. Most people of this age are well established in private life, with a mortgage and kids to feed from their current salary. Taking on a liability of six figures to become re-educated and pursue a new career is quite a risk.

With a one year tertiary degree an individual finding themselves in that situation can retrain themselves quickly and then leverage their knowledge, experience into a new industry. Changing careers would be much simpler, more affordable and incur less risk than is currently the case. With a one year degree and the lower cost from it, the possibility is that an individual will retrain themselves four to six times during their career enabling them to match an increasing volatile labour and investment market.

Conclusion

Our education system was developed in the post-war nanny-state mentality and to meet the needs of the slow capital intensive industries that dominated the world economy immediately after World War II. With Globalization, the labour and investment markets have become more volatile with an increased pace and rate of change. The tertiary education systems need to match this need , otherwise it will make individuals incur too great a debt and make them uncompetitive as the high paying labour markets recede with investment before a tertiary institution can match the markets need.

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