The 21st-Century Workforce: China, India and Implications for the U.S.

At DiversityInc's two-day learning event, Dr. David Finegold, dean of Rutgers University's School of Management and Labor Relations, highlights the power shift in favor of China and India that is driving the new global high-skill, low-wage workforce.

Dr. David Finegold, dean of Rutgers University's School of Management and Labor Relations, shared the results from a research project analyzing major efforts in India and China to raise the levels of skill for their populations, which together account for more than 35 percent of the global workforce.

At DiversityInc's two-day learning event in Washington, D.C., Finegold said both India and China have undergone tectonic shifts in their economies, as families demand higher levels of education and training for their children.

The end result: the intersection of the Internet, globalization and the jockeying by these two emerging economies for industry leadership means the global pool of talent has effectively doubled since the mid-1990s. That has dramatic implications both for China and India but also for the workforce in the United States, he said.

To attend DiversityInc's March 2–3 event, featuring New York Times Columnist Frank Rich, Ernst & Young Chairman and CEO Jim Turley and others, click here.

One of the most pressing challenges now facing the United States and other industrial countries is creating a sufficient supply of high-quality talent and jobs to sustain or continue to improve the living standards of the average citizen.

Because of this huge increase in the labor supply, "what we're seeing is the average incomes of many Americans, including those with great college degrees, being bid down because they're in a global competition for that work."

In terms of the percentage of the population now graduating from college, the United States is no longer a world leader. To illustrate the explosive growth in higher education, Finegold said in 1990, China produced a mere 610,000 graduates. Today that figure is 5 million.

"China has gone from an economy where very few people were even graduating from high school to now over half of all the high-school graduates going on to higher education," Finegold said.

Quoting economist Stuart W. Elliott of the National Research Council, Finegold predicted that, based on current research in artificial intelligence, by 2030, computers could substitute for human abilities in occupations that currently employ 60 percent of the national workforce.

"So think where we are now with unemployment and think about what it's going to mean when over half of everything that is getting done today could be better done in an automated way," he said. "That may seem far-fetched, but look at agriculture. Today, we have more employees at the Department of Agriculture than we have farmers in this country. A century ago, 70 percent of the U.S. workforce was in agriculture. Today, it's fewer than 3 percent of our workers, and they're not just feeding the United States but much of the rest of the world."

Finegold said that in the last decade alone, the United States has lost a quarter of all the remaining manufacturing jobs. And now, the United States is seeing the movement of its high-end knowledge workers as well, due in part to cost factors and, more importantly, talent factors.

"We've already seen a million IT jobs move to India in the last decade, and even though it's still a small percentage of the overall economy in the United States, I think it's just the cutting edge of what we are likely going to see in the coming decade," Finegold said.

Finegold said there has been an unprecedented expansion in the number of research universities—likening the growth to "the equivalent of building a major public research university like Rutgers with 56,000 students every month."

Finegold recently visited an industrial park on the outskirts of Shanghai that didn't even exist 10 years ago, and today, it has more biotech companies than the entire state of New Jersey, a state once considered "the medicine chest of the world" because of its large concentration of pharmaceutical and biotech companies.

For its part, India, which has one of the world's youngest populations—550 million people younger than 25—is now a tourist Mecca for governments around the world to study how the country pulled off this talent and skills miracle, he said.

"The importance of a strong educational foundation has never been greater," Finegold said. "What I encourage my son and every young person I give career advice to is to find that intersection between their passion and their capabilities and take it to a level where they can really excel. Just being good is not going to be enough anymore if you want to make a great living going forward."

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