Improving Human Capital in a Competitive World -— Education Reform in the U.S.

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When the World Bank was founded in 1944, much of Europe, Russia, and Japan lay in ruin.

Today, the world is no longer recovering from a tragic global war. Yet the international community faces a crisis of a different sort, the global economic crunch. And education--then and now--is the beacon lighting the path forward, perhaps more so today than ever before.

Education is now the key to eliminating gender inequality, to reducing poverty, to creating a sustainable planet, to preventing needless deaths and illness, and to fostering peace. And in a knowledge economy, education is the new currency by which nations maintain economic competitiveness and global prosperity. Education today is inseparable from the development of human capital.

This understanding--that education is the new game-changer driving economic growth and human development—goes to the heart of what we are doing in the Obama administration and to the World Bank's mission to alleviate poverty.

For nearly half-a-century, the World Bank has supported educational development. The Bank first invested in educational development in 1962, launching a project to build secondary schools in Tunisia. Since then, the bank has invested $69 billion in more than 1,500 education projects around the globe.

Yet even more important, the Bank's commitment to strengthen school systems has expanded as the educational requirements of the information age have expanded.

The Millennium Development Goals of providing universal primary education to all, and eliminating gender inequities, propelled many nations and multi-governmental organizations to boost educational spending. Over the last decade, the Bank's investment in education surged to more than $5 billion in 2010 alone.

It's an impressive record. Yet both developed and developing nations face serious educational challenges today that call for renewed efforts by the World Bank and nations around the globe to expand access, improve equity, and boost achievement.

Today, I want to provide two overarching messages about America's efforts to increase educational attainment and achievement.

First, the Obama administration has an ambitious and unified theory of action that drives our agenda. The challenge of transforming education in America cannot be met by quick-fix solutions or isolated reforms. It can only be accomplished with a clear, coherent, and coordinated vision of reform.

In many respects, our vision of reform has a great deal in common with the World Bank's forthcoming Education Strategy for 2020. We share your commitment to results—to accelerating the acquisition of skills and knowledge. We share your commitment to cradle-to-career reform for students.

I love your credo "Invest early. Invest smartly. Invest for all." And we share your commitment to systematic reform that provides both high-quality technical assistance and makes smart use of a variety of monetary and non-monetary incentives to drive innovation.

The second takeaway message I'd like to convey is that while America must improve its stagnant educational performance, President Obama and I reject the protectionist Cold War assumption that improving economic competitiveness is a zero-sum game, with one nation's gain being another country's loss.

I want to make the case to you today that enhancing educational attainment and economic viability, both at home and abroad, is really more of a win-win game; it is an opportunity to grow the economic pie, instead of simply to carve it up. President Obama has said that improving education is vital to "win the future" for America. But accelerating learning can help all nations to win the future together.

The United States has so much to learn from nations with high-performing education systems. And America has so much to share from its experience to the mutual benefit of nations confronting similar educational challenges.

Everyone here today knows that education is taking on more and more importance around the globe.
In the knowledge economy, opportunities to land a good job are vanishing fast for young workers who drop out of high school or fail to get college experience.

As the New York Times columnist Thomas Friedman famously pointed out, the world economy has "flattened." Companies now digitize, automate, and outsource work to the most competitive individuals, companies, and countries.

The truth is that is difficult to exaggerate the importance of education to human development today. Education, as Nelson Mandela says, "is the most powerful weapon which you can use to change the world."

And it's not just world leaders and educators who make that case. Economics may be known as the "dismal science." But that has not stopped leading economists from heralding the transformative role of education.

Ben Bernanke, the chairman of the Federal Reserve Board, recently told Time magazine that "the best solution to income inequality is producing a high-quality education for everyone." He said that "in our highly technological, globalized economy, people without education will not be able to improve their economic situation."

When my friend Larry Summers was the chief economist at the World Bank, he spotlighted the importance of educating girls and integrating them into the labor force. "Investment in girls' education," he said, "may well be the highest-return investment available in the developing world."

I am pleased to see that Education for All's Fast Track Initiative is releasing a report tomorrow on the status of girls' education. It finds that enormous strides in access and equity have been made worldwide but that formidable challenges remain ahead.

The EFA's report reminds us that education is the great equalizer. It is the one force that can consistently overcome differences in background, culture, and privilege.

The EFA's report, and others before it, also highlight that expanding educational access for girls is not just an urgent economic and social need. In many cases, it is literally a matter of life and death.

A mother who can read can better protect her children from chronic illnesses, from AIDS, and from dying young. A child born to a mother who can read is 50 percent more likely to survive past age 5. And in Africa's poorest states, UNESCO projects that the lives of 1.8 million children could have been saved if their mothers had at least a secondary education.

This link between education and premature mortality is not limited to developing countries and primary school systems. In the United States, new research finds that college-educated Americans now can expect to live seven years longer than their peers with less schooling--and the longevity gap has grown since the 1970s, even after controlling for risk factors like smoking, hypertension, and cholesterol.

Education, in short, saves lives. But it is also the foundation of peace and prosperity. You can't imagine a better world without a global commitment to providing better education for women and youth.

Today, 70 million children do not attend primary school. Nearly 40 million of them live in countries affected by armed conflict. A better-educated world is a safer world because low educational attainment is one of the few statistically significant predictors of violence.

From Indonesia to Pakistan to Kenya, education has immeasurable power to promote growth and stability. It is a tragedy that more than a year after the earthquake in Haiti, we still don't know how many children are back in school. It is absolutely imperative that the United States seize the opportunity to help Haiti build a stronger school system from the ruins of its old, broken one—just as America coalesced to build a fast-improving, vibrant school system in New Orleans after the tragedy of Hurricane Katrina.

From devastation, beautiful flowers can grow—crisis can seed opportunities for transformational change. In 2001, Afghanistan had barely 900,000 boys in school. Today, they now have almost seven million children in schools, almost 40 percent of whom are girls. Dramatic change in Afghanistan or Ethiopia can happen in a short period of time. But it requires the commitment to succeed.

Now, the economic and social interdependence of the knowledge economy creates new global challenges. The United States cannot, acting by itself, dramatically reduce poverty and disease or develop sustainable sources of energy.

These new partnerships must also inspire students to take a bigger and deeper view of their civic obligations—not only to their countries of origin but to the betterment of the global community.
A just and socially responsible society must also be anchored in civic engagement for the public good. Education transforms one-time subjects into future citizens—as the inspired uprising for democracy in Egypt showed.

The President and I both recognize that improving educational outcomes for students is hard work with no simple answers. And transformational reform especially takes time in the United States. We have more than two million children enrolled in preschool programs, 100,000 public schools, 49 million K-12 students, more than three million teachers, and 15,000 school districts—all of it largely administered and funded by local governments.

I am convinced that the U.S. education system now has an unprecedented opportunity to get dramatically better. Nothing--nothing--is more important in the long-run to American prosperity than boosting the skills and attainment of the nation's students.

In the United States, we feel an economic and moral imperative to challenge the status quo. Closing the achievement gap and closing the opportunity gap is the civil rights issue of our generation. One quarter-- 25 percent--of U.S. high school students drop out or fail to graduate on time. Almost one million students leave our schools for the streets each year. That is economically unsustainable and morally unacceptable.

The North Star guiding the alignment of our cradle-to-career education agenda is President Obama's goal that, by the end of the decade, America will once again have the highest proportion of college graduates in the world.

That goal can only be achieved by creating a strong cradle-to-career continuum that starts with early childhood learning and extends all the way to college and careers.

In the U.S., early learning has come into its own. It is now recognized as the first and most critical stage in human development. We have a special opportunity today to build a bigger and better coordinated system of early care and education that prepares children for success in school and life--in place of a system with uneven quality and access.

President Obama's 2020 college attainment goal is absolutely ambitious. To meet it, roughly 60 percent of young adults will need to have an earned an associate's or bachelors' degree by the end of the decade, up from 42 percent today.

We made a great start in expanding college access with the passage of health care reform, which also freed up $40 billion for Pell Grant scholarships for low-income students. That is the biggest increase in student aid in the U.S. since the 1944 GI bill. And the new law also granted $2 billion to community colleges to help them produce millions more graduates.

On p-12 education, our theory of action starts with the four assurances incorporated in the 2009 economic stimulus bill, the American Recovery and Reinvestment Act.

The four assurances got their name from the requirement that every single governor in the 50 states had to provide an "assurance" they would pursue reforms in these four areas--in exchange for their share of funds from a Recovery Act program designed to largely stem job loss among teachers and principals.

The first assurance was that states would work toward developing academic standards that truly show if a student is ready for college and a career when they graduate from high school. Under the existing system, many states had dummied down academic standards to make students look proficient.

While that helps politicians look good, it was bad for children, bad for education, and bad for states' long-term economic prosperity. Many states were actually, in fact, lying to students and parents, telling them that students were ready for careers and college when they were nowhere near ready.

The second assurance governors provided was in the area of data systems. More robust data systems and a new generation of assessments can assist teachers and principals to improve their practices and tailor their instruction in ways that were largely unimaginable in the past.

The third assurance asked states to commit to improving the preparation, professional development, and evaluation of teachers and school leaders—especially in high-need schools and subject areas like STEM and special education.

Great teachers are the unsung heroes in our society. They have the single biggest in-school impact on academic achievement. And when it comes to teaching, commitment, love for the work, and talent matter tremendously.

Tragically, low-income and minority students do not have equitable access to effective teachers across the country. Too often, the children who need the most help get the least. Too often, we perpetuate poverty and social failure—and that has got to stop.

The fourth and final assurance propelled states, for the first time ever, to commit to dramatic change in persistently low-achieving schools. The United States cannot substantially boost graduation rates and promise a world-class education to every child without ending the cycle of failure in the lowest-performing five percent of our schools.

Year after year, and in some cases for decades, these schools cheated children out of the opportunity for an excellent education. As adults, as educators, as parents, and as leaders, America passively observed this educational failure with a complacency that is deeply disturbing.

Fewer than 2,000 high schools in the United States—a manageable number—produce half of all its dropouts. These "dropout factories" produce almost 75 percent—three-fourths—of our dropouts from the minority community, our African-American and Latino young boys and girls.

State and school district officials have largely tinkered in these schools, instead of treating them as educational emergencies. But children only get one chance at an education.

We are not content with the status quo. And we are not content to continue tinkering. Districts now have to engage in interventions to foster dramatic change in these schools.

Now, as the federal role in education has grown, so has the bureaucracy. All too often, the U.S. Department of Education has operated more like a compliance machine, instead of being the engine of innovation our country and children need. The department typically focused on ensuring that formula funds reached their intended recipients in the proper fashion. It focused on inputs--not educational outcomes or equity.

Our administration has sought to fundamentally shift the federal role, so that the Department is doing much more to support reform and innovation in states, districts, and local communities. While the vast majority of department funding is still formula-based, the Recovery Act created additional competitive funding to incentivize change at the state and local level, like the high-visibility $4.35 billion Race to the Top program and the $650 million Investing in Innovation Fund, or i3.

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

To cite just one example, our department's Race to the Top Program challenged states to craft concrete, comprehensive plans for reforming their education systems. The response was nothing less than 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. And even states that did not win awards now have a state roadmap for reform hammered out.

The Investing in Innovation program also had a phenomenal response. The $650 million i3 fund offered support to school districts, nonprofit organizations, and universities to scale-up best practices.

The department awarded 49 grants in the competition. But nearly 1,700 applicants applied—by far the largest number of applicants in a single competition in our Department's history. Our aim is not just to fund grantees each year, but to build a new culture of evidence-based decision-making for expanding successful reforms.

I said earlier that the United States now has a unique opportunity to transform our education system in ways that will resonate for decades to come. During the last two years, the federal government provided unprecedented funds to support education and reform.

But the special window that America has had to drive reform is not because of the dollars. It is because of the courage, demonstrated by state and local leaders, who have taken the lead in collaborating on problems that the experts said were too divisive to resolve. At the end of the day, I believe it is their courage, and not our resources, that will transform educational opportunity in our country.

In March of 2009, President Obama called on the nation's governors and state school chiefs to "develop standards and assessments that don't simply measure whether students can fill in a bubble on a test, but whether they possess 21st century skills like problem-solving and critical thinking and entrepreneurship and creativity." Virtually everyone thought the president was dreaming.

But today, 41 states and the District of Columbia have already adopted the new state-crafted Common Core standards in math and English. They're not studying it, not thinking about it, not issuing a white paper—they have actually done it. The era of dummying down standards is over.

More than four out of five public school students in the U.S. now reside in states that have voluntarily adopted higher, common college-and career-ready standards that are internationally benchmarked. That is an absolute game-changer in a system which until now set 50 different goalposts for success.

The second game-changer is that states have banded together in large consortia to develop a new generation of assessments aligned with the states' Common Core standards. In September, I announced the results of the department's $350 million Race to the Top assessment completion to design this next generation of assessments.

Two state consortiums, which together cover 44 states and the District of Columbia, won awards. These new assessments will have much in common with the first-rate assessments now used in many high-performing countries outside the U.S. When these new assessments are in use in the 2014-15 school year, millions of U.S. schoolchildren, parents, and teachers will know, for the first time, if students truly are on-track for colleges and careers.

For the first time, many teachers will have the assessments they have longed for—tests of critical thinking skills and complex learning tasks that are not just multiple-choice, fill-in-the-bubble tests of basic skills.

So, in the end, transforming education is not just about raising expectations. It has to be about creating greater capacity at all levels of the system to implement reform. It has to be about results, both here and abroad.

As the United States works to strengthen its educational system, it is important to remember that advancing educational attainment and achievement everywhere brings benefits not just to the U.S. but around the globe.

Our department has been pleased to partner with the U.S. Agency for International Development to help ensure that our best domestic practices are shared world-wide. The United States provides over a billion dollars annually to partner countries working on educational reform.

USAID has just released an important new education strategy to improve reading skills for 100 million children in primary grades and expand equitable access to education in conflict-ridden countries for 15 million learners by 2015.

Our goal in the coming year will be to work closely with global partners, including the World Bank, to promote qualitative improvements and system-strengthening.

Working together, we believe that nations, parents, and educators can greatly reduce the number of children out of school and ensure that the children who are in class are actually learning. It is not just the quantity but the quality of learning that matters. More than half of Kenyan teenagers and about a third of Malian teens who have completed six years of schooling still cannot read a simple sentence.

Now, some might see a paradox of sorts in America's efforts to bolster international competitiveness.
President Obama often says that the nation that "out-educates us today is going to out-compete us tomorrow."

It is true that the United States will be better off, in comparative terms, if we lead the world in educational attainment, rather than lagging behind. A generation ago, America did lead the world in college attainment. Today, the U.S. is tied for ninth among young adults.

Yet while President Obama would be the first to say that we welcome the challenge of friendly economic competition, he would also say that the United States has to become more competitive and more collaborative to succeed in the globally competitive, knowledge-based economy.

The borderless nature of innovation and ideas today is apparent throughout the U.S. economy. Immigrants to the U.S. started a quarter of all engineering and technology companies from 1995 to 2005, including half of the start-ups in Silicon Valley, our high-tech capital. Sergey Brin, Google's co-founder, was born in Moscow but educated in the United States. Google is now used throughout the globe to gather information and advance knowledge.

Immigration of skilled professionals and promising students is not to be feared but welcomed. In the information age, brain drain has become brain gain.

I want to close by talking briefly about what the United States can learn from other nations and how cross-country collaboration can be of mutual benefit to the U.S. and other nations.

America has a great deal to learn from the educational practices of other countries. One of the most encouraging lessons of the PISA assessment is that high-achieving nations can significantly narrow achievement gaps and advance achievement nationwide—two important goals that the United States has so far failed to accomplish.

Nations like Singapore, South Korea, and Finland are showing the way to building a topnotch teaching workforce, and ensuring that outstanding teachers instruct the most challenging children.

At the same time, the U.S. has much to teach other nations. Our system of higher education is in many respects still without parallel. We have advanced data systems that we are constantly improving. And we have more high-performing schools that are showing how to close achievement gaps than ever before in our nation's history.

I welcome this international dialogue, which is only beginning. In December, in Washington, I joined the OECD Secretary General for the global announcement of the 2009 PISA results. At the same time, OECD released a study that the U.S. commissioned of high-performing and rapidly-improving education systems--and the lessons that they hold for improving education here at home.

Later this month we will be sponsoring an International Summit on the Teaching Profession in New York. The summit will include education Ministers and leaders of national teachers' organizations from high-performing and rapidly-improving countries, with a goal of sharing practices for developing a high-quality teaching profession.

Ultimately, the economic future of the United States rests not only on its ability to strengthen our education system but also on citizens in other nations raising their living standards.

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. Expanding educational attainment everywhere is the best way to grow the pie for all.

In the United States, we know we do not have all the answers to our educational challenges. Yet not having all the answers cannot become an excuse for inaction.

The urgent need to provide an excellent education for every child is a right that cannot be denied. We cannot wait because our children cannot wait. The time for change is now.