As more people are able compete in the global labor market, we are experiencing an unprecedented new Enlightenment in human progress. We are moving closer to the democratization of education, which I believe will also lead to the democratization of opportunity, where more people are able to reach their full potential. This shift will have a phenomenal impact on the application of human capital in the workforce.
At the World Economic Forum's gathering in Davos this year the air was filled with questions on the future of capitalism. The Forum's Founder, Professor Klaus Schwab, argued that the leading economic ideology of today is shifting from capitalism to talentism -- a new era where human capital has become more important to countries, cities and companies success than financial capital. Professor Schwab argued: "Capital is being superseded by creativity and the ability to innovate -- and therefore by human talents -- as the most important factors of production. If talent is becoming the decisive competitive factor, we can be confident in stating that capitalism is being replaced by 'talentism.' Just as capital replaced manual trades during the process of industrialization, capital is now giving way to human talent."
Meanwhile, one backdrop for the debate is the influence of technology and the democratization of everything. As the world moves through the Digital Enlightenment we are seeing business models change from their Industrial Age foundations to be reborn into the Digital Age.
I believe human capital is the most wasted of the world's resources. Despite this human capital is the only form of capital that can produce all other forms of capital. Yet think about how the capitalist markets have not come close to creating market efficiency with human capital compared to our efforts with financial capital. If you believe that talent is universal, only opportunity is not, one can't ignore the gross waste of people's talents around the world. How many unrecognized geniuses must be out there? All those people with potential still in villages in India, China and others. The world is certainly full of rough diamonds -- people with immense potential but never receive the polishing from which their potential can be realized.
In fact, one of the largest remaining bastions of the Industrial Age is the $3 trillion global education system. The current formal education system is failing to keep up with the exponential pace of change society is going through. Every year we see a growing gap between the supply of talent and the demand of talent that has often been referred to as the Skills Gap.
A new debate is beginning to take place around the democratization of education and the role technology will play. The education sector is beginning to experience the same challenges that currently confront the music industry and the newspaper industries. Like those industries, education can be peer produced, delivered as bits, and curated by communities. The current education systems cost structures are likely to be disintermediated by cheaper, more efficient delivery models through the social web. Most exciting is compared with music and the media education has a far further reaching impact in our society.
The EdTech market is beginning to see the early manifestation of the changes that are inevitable. MOOC's (Massive Online Open Courses) are beginning to hit the mainstream as Harvard, MIT, Stanford and others are giving their course content free to the world. Yet what is clear is that the solution to the Skills Gap does not lie in only access to academic content. What is largely missing is the democratization of professional content that is focused on building the employability of the individual. How we develop the supply of human capital to meet the demand of human capital.
We need to rethink that old adage that we all learnt in school: "Cash is king." Today, talent is King. Cash follows talent. Many of the world's most successful corporations have understood this and applied it to their advantage. If you look at the talent wars between companies like Google and Facebook you can see that for them human capital is more important than financial capital. Many companies will begin to realize that they can develop talent online in the same way as universities are educating students online through MOOC's. Companies can now train people off the payroll in order to build an audience that they can hire from with improved results at lower costs.
Knowledge and learning academies delivered by companies such as Microsoft, Cisco and McKinsey are introducing a different model of education, where professionals learn from employees. This model 'gamifys' learning, identifies potential, talent and skills, democratizes education for mass consumption and in turn could 'meritocracize' opportunity. Imagine how powerful it would be to enroll in the free University of Google, University of L'Oreal, University of Coca-Cola.
The democratization of education will also have a very significant effect on the global labor market. In a world where 50 percent of the population is under the age of 27, only 32 percent have regular Internet access and an additional 1.2 billion people will enter the middle classes by 2030, there are fundamental shifts taking place. The greatest impact of the bridging of the digital divide will be the ability for individuals to access a global knowledge pool and skill themselves up to meet market demand. Those with demands on talent can shape their own supply of Talent through online education initiatives. The traditional model of education has been high touch and high cost. As more companies begin to participate in the opening of access to learning content, a new low cost and low touch model is appearing. We are beginning to be able to imagine a world where the democratization of education really will lead to the democratization of opportunity.
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