Are American Kids Really That Dumb?

I just watched an awesome documentary called 2 Million Minutes. The film juxtaposes the lives of 6 high-school seniors: a boy and a girl from a suburban high-school, a boy and a girl from a school in India and a boy and a girls from a school in China.  All of the students are high end students at their own school, but in the film we see that they lead very different lives.

The name "2 Million Minutes" comes from the fact that their are approximately 2 million minutes in four years of high-school.  The film shows that students from America on average spend about half as much of their 2 million minutes studying than do the Chinese and the Indian students.  The film also points out that students from America are much less driven than students from India and China: one of the Indian students said that he only ever goes to school and home.  As you can imagine, the test scores show the effects of these increased study hours.  The OECD (Organization for Economic Co-operation and Development), puts out a standardized test score around the world every year called the PISA test.  The numbers show that students from Asia are outscoring American students by huge margins.

So the question is, 'are American kids falling behind in the world?' In many ways, I have to concede, yes they are. As one person mentions in the film, students in America are the only students in the world who don't think they are in competition with the rest of the world.  As the world becomes closer together, as it becomes easier to allow some guy in India do a job from his computer that an American used to do, we American students will have less job opportunities than we have had in the past.  And if those foreign employees are willing to put in more hours for less pay, and if they are smarter than Americans, companies are going to stop choosing America.

Why are we such weak students in comparison with the rest of the world.  There are two main reasons.  One is that the Indian students and Chinese students see doing well in school as their golden ticket.  Both of those countries have huge populations but both have a much smaller number of respected universities.  India actually has more universities than America, but in India, everyone wants to go to the India University of Technology (IIT).  That one school sees 500,000 applicants per year for it's 10,000 spots.  No school in America has a .02 percent acceptance rate, that's ridiculous (Harvard has an acceptance rate of 6 percent).

The second reason why students in China and India do better than American students is because American students have a different definition of success.  In America, most people value the concept of balance.  We would look down on the kid that only goes to school and to home.  We would say 'sure, you're smart, but the real test would be if you could get good grades and balance extracurriculars."

A lot of people in America will start focusing more on school in college when they realize that the stakes are high and if they don't get good grades, they might not get a good job.  This is not true across the board though because their are plenty of students who go to college and just party the whole time, a lifestyle that our movies and TV shows often promote.

This cultural trend of "balancing school work and play" will probably remain in America for awhile.  But I know when I grow up, I will be telling my kids that the only way they are allowed to spend time "balancing" is if they get good grades.  I will probably have to compete, at some point in my life, for a foreigners job.  I will not want my kids to be as ill-prepared for the world job market as many of my American classmates are now.

Indonesia, the Rookie

McKinsey Global Institute (the research center for McKinsey&Company) recently came out with an awesome economic report  on Indonesia.  Among other things, the report said that Indonesia, currently the world's 16th largest economy, could become the world's 7th largest economy by 2030.

Indonesia is really a very young democracy.  In 1945, the country gained independence from the Dutch, but the country had an autocratic system and only two presidents up till 1999 [1]. In October of 1999, Indonesia held its first democratic election, and since then, the country has seen high growth rates, mostly staying between between 5 and 6 percent.

So why is this young democracy doing so well while plenty other "democracies" are failing worldwide?  The best way to examine this is through a framework provided by Paul Collier in his book The Bottom Billion.  The book lists four "traps" that some countries get stuck in that hinder the growth of that country.  The traps are the "Conflict Trap," "Landlocked with Bad Neighbors," "Bad Governance in a Small Country," and the "Natural Resource Trap."  Not a single one of the traps applies to Indonesia.

The Conflict Trap refers to countries that are stuck in constant civil war or has so many coups that no leader has steady control over the country for very long at all.  The last civil conflict that Indonesia had was in 1998-1999 when, fed up with the General Soeherto and hurt by the Asian financial crisis of 1997, the Indonesian population revolted.  Soeherto "resigned" and the country has not seen any war or coups since.

Indonesia is far from Landlocked, and is surrounded by some really great neighbors.  The countries that Indonesia communicates the most with in it's region are Australia, China and Japan.  Indonesia is surrounded by strong, developed nations, and great potential trade partners.  However, as we will see in the Natural Resource Trap, trade with these neighbors is not the reason why Indonesia has consistently high growth rates.

Bad Governance in a Small Country is not a huge deal for Indonesia.  Part of the reason for this is because Indonesia is huge; it is the largest Muslim country in the world and with a population of more than 247 million, it is the fourth most populous country in the world.  And Indonesia does suffer from some corruption but Bad Governance is a bigger problem for a country if it is getting its wealth from large natural resources or foreign Aid.  Indonesia's current corruption problems are not hindering the growth of the country because these leaders do not have the oppurtunity to do too much harm

To look at the Natual Resource Trap, we need to go back to those growth statistics. The 5-6 percent growth rates that Indonesia has maintained since 2000, don't actually tell the true story of Indonesia.  In fact, the country had higher growth under its autocratic leadership from 1945-1999.  However, at that time the country was suffering from a terrible problem, and that was the Natural Resource Trap, in one form.

The Natural Resource Trap is essentially the same thing as Dutch Disease; economies that have large natural resource deposits are unable to grow because all other productive exports that the country has to offer become crowded out by its export of oil, or minerals or whatever else.  For Indonesia it was Oil.  Up till the late 1900s, the Indonesian economy was reliant on oil exports.  This has changed though.

The Indonesian economy is now growing at strong rates because of consumerism.  According to the McKinsey report, 65 percent of Indonesia's GDP growth comes as a result of domestic consumption, a relatively high number.  This means that Indonesia is not just becoming a strong player in the world economy, but they are also becoming a strong Internal economy that is capable of maintaining high growth rates even without exporting.

Indonesia is still a young Democracy, but so far they are looking good.  According to the McKinsey report, the consumer population of Indonesia is still young, and as they age, the Indonesian economy will grow at even higher rates.  Indonesia is still a very young Democracy, but it is so far showing a lot of economic potential.