Remember Snapchat's $3 billion acquisition offer? How about Elon Musk's Hyperloop, a vacuumed train that travels at speeds over 700mph? Most would agree that these products caught our attention because of their novelty, ingenuity, absurdity or unproven valuations.
So many of us read the headlines, notice an increasing number of them mentioning technology, and gawk at sticker prices and preposterous ideas. We recognize our lives are getting cooler, more fun, easier, prettier, faster and better due to these inventions, but wish we could trim the irrationality and restrain the bubble. Before we do, are there any benefits to this excess? Perhaps it helps convince more people to study technology, something we desperately need to encourage. It's a fact that relatively few of us actually understand the technology behind these advancements, and it's surprising that more of us have not flocked to learn how to create these things ourselves. There is no shortage of people with non-technical backgrounds who want to create things, but unfortunately, many of these entrepreneurial adventures make it no further than an over-thought business plan and blank pages titled 'Next Steps.'
People need to learn about technology because we can't escape. Growing up, I remember friends and even teachers asking, "Are you more of a math/science student, or an English/history one?" It was easy to get away with being one or the other because school requirements were flexible and professional jobs segmented by skill. The latter is not true anymore, and the former needs to change. This false dichotomy of people 'types' has been eroded as technology creeps into every industry. Whether you are an aspiring poet struggling to be found or a small town hardware store choked by online retailers, advancements in technology like the Internet have introduced opportunities and threats to which you must adapt, requiring a basic understanding of how to use new tools at the very least.
It is great from a social perspective for people to learn more about technology. It's critical to economic development, for innovation. Productivity gains, as economists choose to describe them, are dependent on the development and application of new technologies, which are possible only if people are properly educated in the right fields. STEM -- science, technology, engineering, and math -- describes the key knowledge areas that allow societies to unlock greater advancements, which ultimately lead to better lifestyles and happier, healthier and wealthier people.
There is no shortage of data illustrating a basic economic observation in the STEM labor market: demand > supply. If you have a tech background, you are more likely to be employed and you are more likely to earn more than your counterparts lacking STEM training. STEM jobs will grow 17 percent over the next 10 years, compared to ~10 percent growth of non-STEM jobs, implying that a greater share of jobs will demand a high-level technical knowledge. And I bet that many of the "non-STEM jobs" will also require at least a basic understanding of technology. In fact, it is estimated that only 20 percent of the current job market has the requisite skills for 60 percent of 21st century jobs. That, incontestably, is a shortage and explains why the unemployment rate is 4 percent lower for STEM workers than non-STEM workers.
It also explains why we see higher incomes for people with tech backgrounds. We don't need to read about talent acquisitions and $100,000 signing bonuses to figure this out. Maybe the heart of Silicon Valley is an extreme we can't apply broadly, but I've seen how technical knowledge can change people's lives. I help mentor at schools that train people in introductory coding, and I know students who have entered with a $30,000 salary and graduate with a $70,000 one. You don't need to calculate the ROI on that to get a sense for the value of tech education. How much more can you make in a STEM job than a comparable non-STEM job? Hard to know which number is most accurate, but I've seen everything from 15 percent to 50 percent higher.
Even though policy makers are pushing more STEM-education initiatives, we have not figured out a way to attract and train people successfully. Because of lack of accessibility, affordability, quality, support and a number of other reasons, we can't produce enough STEM people to keep up with demand. Said another way, the market is inefficient and it benefits those who do invest the time to learn the proper skills. Millions of public and private dollars have been invested in trying to improve tech education. President Bush's America COMPETES Act (America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act of 2007) and President's Obama 'Educate to Innovate' campaign are just a couple of the numerous ways in which our policy makers are trying to boost STEM education. What they have realized, thanks to a 2007 report titled Rising Above the Gathering Storm: Energizing and Employing American for a Brighter Economic Future by the National Academies, is that weakness in STEM can translate quickly into a slowing economy, threatened national security, and diminished global power. Naturally, the administration wants none of these, and now spends $4.3 billion on STEM education. The Brookings Institute points out, however, that of the government's total spend, only 20 percent goes toward supporting sub-bachelor level training even though these workers will play a critical role in our new tech-heavy economy. This is just one of several shortcomings of the existing efforts. As is usually the case, private players get involved whenever the opportunity is large enough. The number of short (e.g. three-months) 'learn how to code' programs I have heard about recently is just one sign that the problem persists and no one player, method, or tool has won yet. The pie is big enough for many winners.
The dollars poured into tech education are motivated by a desire to create a stronger economy. Beyond the problems of accessibility, affordability and all the others not listed, interest plays a significant part. I find it really difficult to learn, let alone retain, anything I am not interested in. I try to give everything a chance, but passion is a great predictor of retention. That is why demonstrating the amazing things technology enables -- more profound cancer research, 3D printing, wearable technology, etc .-- is critical. As venture capitalists and investors everywhere can attest, the number of ridiculous startup ideas that are proposed is astounding -- Twitter for dogs, anyone? - -and the number of "are we in a bubble?" articles is overwhelming. While it is easy to call distant visions of asteroid mining ludicrous and billion dollar valuations unfounded, if this activity is generating long-term STEM interest in students and is focusing our attention on enhancing tech education, we've uncovered something very positive. I doubt anyone would argue that tech bubbles are a net positive, but it also can't hurt to identify what is good about the hype.