Education and International Competition: The Win-Win Game. Secretary Duncan's Remarks to the Council on Foreign Relations, New York City

It's great to be back before the Council on Foreign Relations. I am looking forward to a spirited discussion with your members.

I want to talk briefly today about my article in the forthcoming Foreign Affairs on education and international competitiveness, and then turn over the discussion to my good friend and moderator, New York's chancellor Joel Klein. His smarts, his passion, and his tenacity are an example for all of us of what courage and leadership can accomplish on behalf of children. I have learned a great deal from Joel over the years—New York is incredibly lucky to have him leading your effort to create a world-class school system. And I will continue to do whatever I can to support his work.

I want to also thank Foreign Affairs, which has pre-released my essay specifically for today's event.

I welcome the opportunity to talk about the relationship of education and international competition because it is a subject rife with misunderstanding.

In a nutshell, my message is that policymakers and voters have treated international competitiveness for too long as a zero-sum game. The success of other nations at increasing educational attainment and economic competitiveness has been assumed to be America's loss.

The belief that another country's gain in economic competitiveness is America's loss is a remnant of the Cold War mentality and a protectionist ethic. It stems from a worldview in which prosperity depends on a state's ability to preserve a finite amount of goods and human capital.

I want to suggest to you today that enhancing educational achievement and economic viability overseas and at home is really more of a win-win game; it is an opportunity to grow the economic pie, instead of carve it up.

On the whole, education and economic competition can produce enormous benefits for the world and for the United States. The U.S. reaps rich benefits when educational attainment rises—both from an influx of well-educated immigrants and from rising demand for American products from better-educated populations overseas.

Let me begin with a story to illustrate how the world is changing. Last November, during his trip to Asia, President Obama sat down to a working lunch with South Korean President Lee in Seoul. In the space of little more than a generation, South Korea had developed one of the world's best-educated workforces and fastest-growing economies. President Obama was curious about how South Korea had done it. So he asked President Lee, "What is the biggest education challenge you have?"

Without hesitating, President Lee replied, "The biggest challenge I have is that my parents are too demanding."

That anecdote usually makes American chuckle. It also makes them wince a little bit.

I wish my biggest challenge—that America's biggest educational challenge—was too many parents demanding academic rigor. I wish parents were beating down my doors, demanding a better education for their children, now!

President Lee, by the way, wasn't trying to rib President Obama. He explained to President Obama that his biggest problem was that Korean parents, even his poorest families, were insisting on importing thousands of English teachers so their children could learn English in first grade—instead of having to wait until second grade.

That is the reality of what U.S. schoolchildren are competing against in the global economy. And it is a reality that many parents, lawmakers, and voters in America still have not yet fully grasped. In practical terms, globalization means that U.S. students will have to compete throughout their careers with their peers in South Korea, Canada, China, European countries, India, and other rapidly developing states.

This race to boost educational attainment and economic competitiveness is a race that—to be brutally honest—the United States is losing. Just one generation ago, the United States had the highest proportion of college graduates in the world. Today, in eight other nations, including South Korea, young adults are more likely to have college degrees than in the U.S.

In South Korea, 58 percent of young adults have earned at least an associate's degree. In America, just 42 percent of young adults have achieved the same milestone. In many other developed countries, the proportion of young adults with associate's or bachelor's degrees soared in the last 15 years. Here in the United States, we simply flat-lined. We stagnated, we lost our way—and others literally passed us by.

The performance of U.S. students, compared to their peers in other high-achieving nations, is a critical benchmark of career and college readiness in today's knowledge economy. Unfortunately, the academic achievement of American high school students is mediocre at best. On the 2006 PISA tests, 15-year old Americans ranked 23rd out of 30 OECD nations in math and 25th in science. Fifteen year-olds in Canada were on average well over one school year ahead of their U.S. peers in these subjects.

Just as troubling, about one in four high school students—25 percent—in the U.S. drops out or fails to graduate on time. That's almost one million students leaving our schools for the streets each year. That is economically unsustainable and morally unacceptable. High school dropouts today are basically condemned to poverty and social failure.

Last year, McKinsey & Company did a quantitative analysis of the economic impact of having failed to close achievement gaps in the in the United States in the 15 years that followed the release of the landmark 1983 education report, A Nation at Risk.

McKinsey found that if students in states that scored-below average on the National Assessment of Educational Progress had improved over 15 years so they merely performed at the national average, America's GDP would be 3 to 5 percent higher today, or $425 billion to $700 billion richer. The McKinsey report concluded that the nation's achievement gaps have imposed—and I quote—"the economic equivalent of a permanent national recession."

One of the more unusual and sobering press conferences I participated in last year was the release of a report by a group of top retired generals and admirals that included General Wesley Clark and Major General James Kelley. They were deeply troubled, as I am, by the national security burden created by America's underperforming education system. Here was the stunning figure cited in the generals' report: 75 percent of young Americans, between the ages of 17 to 24, are unable to enlist in the military today because they have failed to graduate from high school, have a criminal record, or are physically unfit.

So, to borrow a phrase from the space race era—yes, Houston, we have a problem—and a big one. Yet there is a paradox at the heart of America's efforts to bolster international competitiveness. To succeed in the global economy, the United States will have to become both more economically competitive and more collaborative.

It is no secret that in the last decade, international competition in higher education and the job market has grown dramatically. As Tom Friedman famously pointed out, the world has "flattened." Companies now digitize, automate, and outsource work to the most competitive individuals, companies, and countries. In the knowledge economy, the opportunity to land a good job is all but gone if you drop out of high school or fail to get any college experience. That is why President Obama has repeatedly warned that "the nation that out-educates us today is going to out-compete us tomorrow."

Yet more international competition has also spawned more international collaboration. In the knowledge economy, education is a public good unconstrained by national boundaries.

From 1995 to 2005, immigrants started a quarter of all engineering and technology companies in the United States—including half of those in Silicon Valley. Sergey Brin, Google's co-founder, was born in Moscow but educated in the United States. In 2000, immigrants constituted just 12 percent of the American workforce. But they accounted for nearly 50 percent of the country's PhD-holding scientists and engineers.

Even when products are manufactured overseas, U.S. entrepreneurs are well positioned to benefit through innovation. One study found that while Apple outsourced abroad the manufacture of the video iPod, 55 percent of the product's $299 retail value was captured by American companies and workers.

Most of the iPod's value, it turns out, lay in its development and design. It was the Apple engineers who figured out how to combine the device's 451 prefabricated parts into a prized commercial product.

It is no surprise that economic interdependence brings new global challenges and new educational demands. The United States cannot dramatically reduce poverty and disease, develop sustainable sources of energy, fight terrorism, or curb climate change unless we collaborate with other countries.

Those partnerships require American students to develop better critical thinking abilities, cross-cultural understanding, and language skills. They also will require U.S. students to strengthen their skills in science, technology, engineering, and math—the STEM fields that anchor innovation in the global economy.

Now, American workers will plainly be better off, in comparative terms, if they lead the world in education attainment, rather than lagging behind. That is why President Obama has a set a bipartisan goal that America will once again have the highest proportion of college graduates in the world by 2020.

Yet it is important to remember that advancing educational attainment and achievement everywhere brings benefits not just to the United States but around the globe. In the knowledge economy, education is the new game-changer driving economic growth. Education, Nelson Mandela says, is "the most powerful weapon which you can use to change the world."

From Indonesia to Pakistan to Kenya, education has immeasurable power to promote growth and stability. It is absolutely imperative that America seize the opportunity to help Haiti build a stronger school system from the ruins of its old, broken one—just as the nation coalesced to build a fast-improving, vibrant school system in New Orleans after the tragedy of Katrina. From devastation, beautiful flowers can grow—crisis does create opportunities for transformational change.

Educating girls and integrating them into the labor force is especially critical to breaking the cycle of poverty. It is hard to imagine a better world without a global commitment to providing better education for women and youth—including the 72 million children who do not attend primary school today.

And don't forget that a better-educated world would absolutely be a safer world, too. Low educational attainment is one of the few statistically significant predictors of violence.

Ultimately, education is the great equalizer. It is the one force that can consistently overcome differences in background, culture, and privilege. As Ben Wildavsky writes in The Great Brain Race, in the global economy "more and more people will have the chance... to advance based on what they know rather than who they are."

Now, it is true that not all will share equally in the benefits of the knowledge economy. College-educated workers will benefit the most. That makes the President's 2020 goal, the goal of once again having the highest proportion of college graduates in the world, all the more central to building U.S. competitiveness. That goal is the North Star for all of the administration's education reform agenda.

Reaching that goal is admittedly ambitious. It will require a transformation of the education system in America. It cannot be achieved through tinkering or modest improvements in both high school graduation rates and college attainment rates.

To meet the 2020 goal, our Department projects that an additional eight million people will need to graduate from institutions of higher education in the U.S. over the next decade. Those numbers would represent a 50 percent jump in college attainment rates, with 60 percent of young adults earning degrees in 2020—compared to just over 40 percent today.

So, what are we doing to ensure our nation develops the best educated, most competitive workforce?

In the coming decade, the United States has a unique opportunity to reverse its declining economic competitiveness. The Recovery Act, the stimulus package enacted by Congress in February 2009, included nearly $100 billion for education, the largest investment by the federal government in history.

This year, the Health Care and Education Reconciliation Act freed up $40 billion for Pell Grant scholarships for low-income college students during the next decade, simply by ending subsidies to banks that brokered student loans. We did that without going back to taxpayers for a dime. That is the biggest increase in student aid since the days of the 1944 GI Bill. The health care law also provided $2 billion to community colleges to help them produce millions more graduates. Community colleges have been an unrecognized gem of the education continuum for far too long.

As essential as these expanded federal investments are, reform is never just about more money. The United States also has an unprecedented window for reform because courageous state and local leaders have taken the lead in collaborating on problems that experts claimed were too divisive to resolve. Their commitment and innovation have been breathtaking.

I've said that America is in the midst of a "quiet revolution" in school reform. And this is very much a revolution driven by leaders in statehouses, state superintendents, local lawmakers, district leaders, union heads, school boards, parents, principals, and teachers.

The first such transformational reform is the voluntary adoption by at least 35 states and the District of Columbia of the state-crafted Common Core academic standards, which measure K-12 students' readiness for college and careers. For the first time in history, states will apply rigorous, internationally benchmarked standards for math and English to more than three-fourths of all U.S. public school students. For the first time, a child in Mississippi will evaluated with the same measuring stick as a child in Massachusetts.

This will end some states' insidious practice of dummying down standards to make students appear proficient who are actually far from being career or college-ready. We have to stop lying to children and parents about our educational progress—and start telling the truth. The Common Core Standards are an absolute game-changer in a system, which, until now, set 50 different goalposts for success.

A second transformational reform is the department's $4 billion Race to the Top program. Race to the Top challenged states to craft concrete, comprehensive plans for reforming their education systems. The response to Race to the Top program has been absolutely extraordinary. Forty-six states submitted applications—and the competition drove a national conversation about education reform.

Thirty-two states changed specific laws that posed barriers to innovation, including right here in New York, where caps on the number of charter schools were raised. Every state which had laws on the books prohibiting the linking of student achievement to teacher evaluation, removed them. And even states that did not win awards now have a state roadmap for reform hammered out, and they are moving forward.

The government cannot revitalize education and the nation's economic competitiveness alone. Business, higher education, philanthropists, local leaders, and parents must all do their part to prepare U.S. students to compete in the knowledge economy.

The truth is that American educators have a lot to learn from foreign competitors about how to rapidly accelerate educational attainment, reduce achievement gaps, and elevate the teaching profession.

In the next four to six years, our Department projects that up to one million new teaching positions will be filled by the next generation of teachers as the Baby Boomers retire. And as a study by McKinsey & Company points out: "The quality of an education system cannot exceed the quality of its teachers."

Yet the McKinsey study also documents that the U.S. lags far behind top-performing nations, such as Finland, Singapore, and South Korea, in recruiting young people with strong academic backgrounds to be teachers.

In those high-performing school systems, 100 percent of the teacher corps is recruited from the top third of the academic cohort. In the United States, by contrast, just under a quarter of new teachers come from the top third of students—and only one in seven new teachers in high-poverty schools come from the top third.

In nations that are out-educating us today, the caliber of new teachers is a critical national priority. The United States needs to similarly elevate the teaching profession—which is why we have launched a national teacher recruitment campaign. Our ability to attract and retain great teacher talent can transform public education in this country for the next 25-30 years. It is an amazing opportunity.

You can learn about the campaign at teach.gov. The goal of the campaign over the next five years is to take a giant step toward developing the finest teaching force in the world, especially in high-need schools and subject areas.

If America accomplishes all of this ambitious agenda, strengthening U.S. competitiveness will still require a sea-change in attitudes. To sum up, international economic competition should not be seen exclusively as a threat. Instead, it should be a healthy inducement to learn from and collaborate with other nations.

Thinking of the future as a contest among nations vying for larger pieces of a finite economic pie is a recipe for protectionism and global strife. The economic future of the United States rests not only on its ability to strengthen its education system but also on citizens in other nations raising their living standards.

Ultimately, expanding educational attainment everywhere is the best way to grow the pie for all. The virtuous cycle, not the vicious cycle, is the pathway to prosperity.

So, for these three reasons, America urgently has to transform its education system: This is an economic imperative, because we have to educate our way to a better economy; This is a national security issue, if our armed forces are to remain the best in the world; And finally, transforming education is the civil rights issue of our generation.

A child gets only one chance to get a good education. If you can sit at the front of the bus but you cannot read, you are not truly free. Many years ago, Dr. Martin Luther King explained in his powerful letter from Birmingham Jail why the civil rights movement could not wait.

America cannot wait to transform education. We have been too complacent and too passive. We have perpetuated poverty and social failure for far too long. The need is urgent. And the time for change is now.