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**************************** G*E*T**W*I*R*E*D*! ***************************


Would you send your kid to a Soviet collective?

By Lewis J. Perelman


Dear Information Industry Executive:

Could your business benefit from a few hundred billion dollars in new 
sales? Good. Let's talk.

We all know that the world economy is going through what some call a 
"second industrial revolution" as knowledge-based businesses replace 
production-based businesses at the core of economic activity. In the 
trenches of this revolution a host of companies are scrambling to 
capture the high ground of the new multimedia, telecomputing mega-
industry that is springing up from the digital integration of many 
diverse enterprises.

But contrary to what you have heard during the recent election, schools 
are one of the principal barriers to the growth of not only this new 
industry, but the whole world economy. Replacing the bureaucratic empire 
of educational institutions with a high-tech commercial industry will 
pull the cork out of the knowledge-age bottleneck - opening up an annual 
market worth $450 billion in the US alone. 

Recent campaign rhetoric aside, the real threat posed to our economy by 
education, schools and colleges is not inadequacy, but excess: too much 
schooling at too high a cost.

The conventional "technology" of the classroom is a thousand-year-old 
invention initially adopted to discipline an esoteric cadre of acetic 
monks. The institution of contemporary, "public" education is a 19th-
century innovation designed as a worker-factory for an industrial 
economy. Both have as much utility in today's modern economy of advanced 
information technology as the Conestoga wagon or the blacksmith shop.

America currently has the most schooled workforce in its history: In the 
last two decades, the number of college graduates absorbed by the US 
workforce soared from less than 11 percent to more than 21 percent. In a 
recession that has dragged on for nearly three years, the most educated 
workers have borne a disproportionate share of unemployment. A white-
collar middle manager is about two-and-a-half times more likely to 
become unemployed now than the average worker. Dan Lacey, editor of 
Workplace Trends, estimates that 70 percent of the unemployed in the 
ongoing wave of corporate staff cuts are managers, professionals, and 
technicians, most of whom hold college degrees. 

Because the cuts are permanent, fewer than 25 percent of these people 
will find similar new jobs today, down from 90 percent a decade ago. 
Economist Gary Schilling expects that at least 10 percent of all college 
grads will be unemployed during the '90s; re-cent Labor Department 
studies indicate that another 25 percent to 50 percent will wind up 
"underemployed" in jobs for which their diplomas are irrelevant.

As for the myth that a greater "investment" in education will yield the 
"high skills" that promise "high wages," the recent collapse of the 
Soviet Union means that US companies such as Sun Microsystems, AT&T, and 
Corning Glass now can employ world-class scientists and technicians in 
Russia and other countries for salaries of $60 a month. And India 
promises to add another 400,000 new engineering graduates a year to the 
world pool of educated talent.

So the value of academia's diplomas is deflating even as their cost 
continues to balloon. The nearly $450 billion America spent on schools 
and colleges in 1992 represents an inflation-adjusted increase of 40 
percent, or $100 billion, in education spending in the last 10 years. 
That's half again more than what's spent on defense or the federal 
deficit, for services of dubious and declining worth. 

Why is the education sector - equal with health care as the largest 
industry in our economy - a center of declining productivity, while 
advancing technology is making every other information business more 
efficient?

The answer is clear: Education is the last great bastion of socialist 
economics. Public education is a redundant term: More than 90 percent of 
the services provided by educational institutions in the US are owned, 
operated, subsidized, and/or regulated by government. Schools and 
colleges are as productive and innovative as Soviet collective farms.

You may be starting to get a glimmer of why the shut-down and 
replacement of education is the greatest business opportunity since 
Rockefeller found oil: At the same time America is barely scrounging up 
the capital to afford the $80 billion to $100 billion it will take to 
replace the national telecommunications infrastructure with fiber-
optics, hundreds of billions of dollars are being shoveled annually into 
the black hole of education's socialist economy. America's biggest and 
most technologically archaic information market is squandering a 
treasure equivalent to the world's eighth-biggest national economy on 
the feckless paper chase for academic diplomas.

But wait a minute, you say: Don't the "knowledge workers" of the new 
economic age need to learn a lot more to be productive and competitive?

Sure. We all need to learn much more, much faster, and much better; not 
just to get ready for work, but to keep up with the electric changes and 
explosion of information that permeate our increasingly checkered 
careers. Moreover, learning is the work that two-thirds to three-
quarters of US workers now get paid to do, and is, in fact, the central 
production process of the imminent knowledge-age economy.

But schooling has become an obstacle to the kind of learning the modern 
workforce needs. Much of what the public widely believes about the 
function and value of schooling is not only wrong, but often the 
opposite of reality. Humans are genetically designed to be active 
learners; passively absorbing knowledge from an "expert" teacher just 
doesn't work. Research proves that the most effective human learning 
actually takes place in the context of real-life experience, not in 
classrooms. More than 99 percent of what the average American now learns 
in a lifetime is not learned in any classroom.

As the growing unemployment of our most schooled workers demonstrates, 
academic success is at best irrelevant and may even be harmful to 
working productively in the real world. The exploding information base 
and intelligent tools of the modern economy make thinking skills far 
more important than the memorization of facts or rote exercises. And, in 
contradiction to the one-dimensional notion of academic "aptitude" 
that's valued in the bogus currency of measures such as IQ or SAT 
scores, people have at least seven independent kinds of intelligence, or 
talent, and a dozen or more distinct yet effective "styles" of learning. 

But schooling is still necessary for "socialization," right?

Nope. Research shows that many if not most of the actual socializing 
effects of schools are harmful: The losing majority of students get 
wounded self-esteem, while the "excellent" few percent of students get a 
false sense of superiority and security.

Think about it. In what other domain of work or social life is a premium 
placed on your ability to sit in rows of desks in a room, be talked at 
for 40 or 50 minutes, and then, when a bell rings, to walk down a hall 
to another room to repeat the same experience again and again during the 
day?

The good news is that a new wave of technology I call "hyperlearning," 
or HL for short, offers a technological replacement for today's 
educational morass.

HL is not a single device or process, but a universe of new technologies 
that both possesses and enhances intelligence. The "hyper" in 
hyperlearning refers not merely to the extraordinary speed and scope of 
new information technology, but to an unprecedented degree of 
connectedness of knowledge, experience, media, and brains - both human 
and non-human. The "learning" in HL refers most literally to the 
transformation of knowledge and behavior through experience. 

Hyperlearning is weaving the fabric of a new economy out of four key 
technological threads: 

* First is the "smart" environment, where every artifact you touch or 
are touched by - cars, houses, toilets, clothes, tools, toys, whatever - 
is endowed with its own intelligence. The special significance of this 
intelligence is that it increasingly includes the ability not only to 
aid humans to learn, but to actively participate in the process of 
learning itself.

* Second is what my colleague George Gilder calls the "telecosm" - the 
growing broadband communications infrastructure that makes all knowledge 
accessible to anyone, anywhere, anytime. For both human and non-human 
learning, the telecosm makes the "best and brightest" available 
everywhere.

* The third thread is a kit of "hypermedia" software tools needed to 
navigate through a knowledge-dense universe. In relation to multimedia, 
hypermedia is an expanded, multi-dimensional version of a book index. 
Hypermedia provides the technical bridge that leads the user away from 
informing and toward understanding. 

* The fourth and last thread in the matrix of HL technology is brain 
technology, a broad category representing the application of biology and 
other sciences to thinking and sensing systems. In a sense, brain tech 
is the "wild card" in the HL deck. It contributes much of the basic 
science and technical tools that underlie the other three areas of 
hyperlearning technology. But it also offers a growing potential for 
biotechnology that can alter the learning process from the inside out.

The first major social impact of the HL revolution is to make schooling 
obsolete. That's no sci-fi scenario; it's happening today. For example: 
Two of the valuable features touted in an advertising brochure for 
Microsoft's new database program Access are "Wizards" and "Cue Cards." 
The brochure explains that the wizards take the place of "a professional 
programmer" by asking you questions about the form or report you want to 
create. Then "you simply click one button...and the wizard does the work 
for you." 

The Cue Cards provide the service of an "online coach with infinite 
patience" to teach you how to use the program, without taking time off 
>from the job: "You never have to stop work to page through a manual... 
You learn as you work with your own data," instead of "messing with...a 
canned tutorial."

These HL features are not breakthroughs, but examples of the "expert 
systems" and "embedded training" found in thousands of products in the 
marketplace today. You don't have to go to a professor in a classroom to 
get expert "know-how" or training. The expertise and learning are 
immediately available "on demand" or "just in time." 

The extinction of academic education also removes one of the key 
barriers to the economic opportunities in the knowledge age: 
credentialism. The main focus of traditional education is not learning, 
it is screening out; maximizing failure in the name of "standards" in 
order to label the minority of surviving students "excellent."

In the new economy, where mindcraft replaces handicraft as the main form 
of work, HL makes obsolete the teaching, testing, and failure on which 
academic credentialism rests. Automated instructional systems build 
real-time, continuous assessment and feedback into the learning 
processes that are ever more embedded in the many tools of the smart 
environment. 

The mindcraft economy will replace degrees and diplomas with precise 
instruments that certify attainment of competency. Corporate teams 
linked by "groupware" networks will give little or no premium to what 
you did in school fifteen years ago, but they will be quite interested 
in what knowledge, skills, and talents you can bring to solving specific 
problems right now. The new, high-tech processes of certification will 
identify the nature and degree of specific abilities a worker may have, 
and then offer the most efficient learning resources needed to address 
any shortcomings. 

The broader and perhaps more dramatic social impact of the hyperlearning 
revolution will be the large-scale displacement of traditional 
"employment" by a new form of human capitalism in which ownership of 
intellectual capital progressively replaces labor. This development 
dooms political promises of "jobs, jobs, jobs" to inevitable 
disappointment; but it also opens a hopeful new path to economic 
security.

In past economic revolutions, those workers displaced by technological 
innovation first shifted from jobs in agriculture to manufacturing, and 
then from manufacturing to services. The lack of productivity growth in 
the services sector has been the main culprit in the stagnation of US 
living standards for the past two decades, but ironically, this most  
recent recession clearly marks the realization of effective automation 
and very real productivity gains in the service industry. These 
improvements should be welcome progress, but the legions of white-collar 
service work-ers now being shed right and left by American corporations 
appear to have nowhere to go: We seem to have run out of new employment 
sectors. 

The answer to this dilemma lies in the growth of the "knowledge sector" 
as a unique, fourth sector of the modern economy. The practical currency 
of the knowledge sector is intellectual property, or more simply, 
software. Unlike energy and materials, information is practically 
boundless. So in theory, the software-based knowledge sector need never 
run into "limits to growth."

Unlike most products, software can be taken without being lost. By the 
same token, information may be licensed or leased to a large number of 
people at the same time without its value being divided or diminished. 
This makes intellectual property, or software, extremely profitable to 
own and therefore very attractive to steal. So information's special 
nature also makes property law far more critical to information-based 
businesses, even as it makes enforcement of that law more complicated.

Knowledge-age technology makes the value of physical goods, as well as 
services, depend increasingly on their knowledge content. The creation 
of knowledge through learning and the embodiment of knowledge in 
software now hold the keys to wealth. So far, most economists and 
politicians remain relatively clueless about this new economic reality. 
Many still claim that manufacturing is the essential core of a 
"competitive" economy. The truth is that software is the most important 
business in the modern world.

The stock market understands what the politicians have yet to grasp: 
that Microsoft is worth as much as, or even more than, General Motors. 
GM's assets are measured in the megatons; most of Microsoft's assets 
could be stored on one or two compact CD-ROM discs, weighing only grams, 
and could be carried in a coat pocket. More to the point, GM has 
hundreds of thousands of employees, while Microsoft has only a few 
thousand. 

Ownership of capital, particularly in the form of intellectual property, 
>from now onward will be progressively more important to personal and 
family income than the performance of "labor."

The core of full-time employees in our economy is shrinking to the 
vanishing point: The majority of the future "workforce" is destined to 
be made up of contractors and consultants, including temporaries and 
part-timers, whose role is more one of "supplier" than "employee." As 
intellectual property becomes more central to the valuation of 
businesses, and as most "production" work is eventually taken over by 
machines, workers in most fields will want compensation in the form of 
"points" and "residuals": that is, a share in the ownership of capital.

Obviously, replacing academia with a new commercial HL industry requires 
overcoming the political resistance of the seemingly prodigious 
education establishment. I say "prodigious" because anyone who has 
witnessed the bankrupting of the State of California by the school lobby 
knows how ruthless, potent, and destructive that resistance can be. I 
say "seemingly" because this is a battle that, with the right strategy, 
is eminently winnable.

One incentive for victory is the lucrative prize: a new market worth 
more than $450 billion in the US and three to four times that amount 
worldwide. The potential HL market in the US alone is 50-percent larger 
than today's total world computer market. Unlike the long, sorry history 
of failed government "education reform" efforts, this strategy has the 
dynamo of the free market driving it.

While the HL revolution is inevitable and the HL industry is already 
developing today, its advance will be hampered and distorted by the 
massive waste of resources tied up in the academic empire. In 
particular, the well-off will continue to afford access to HL tools at 
work and at home no matter what public policies we pursue. A business-
as-usual policy will only continue to isolate the poor, minorities, and 
disadvantaged from the HL revolution, further aggravating the economic 
polarization of our society. 

For instance, more than half of US high school students in families with 
incomes of $70,000 a year are now using computers to learn at home; but 
fewer than one out of 15 students have home computers in households with 
annual incomes below $15,000.

As explained before, the key to breaking down the existing academic 
empire is to eliminate credentialism. In practice, that means getting 
the majority of employers to stop taking academic diplomas into 
consideration when making hiring, promotion, or other employment 
decisions. Simply put, people's economic opportunities should depend on 
only what people know and what people can do. Standard business practice 
should reflect this reality: There is no job in this economy that truly 
requires an academic diploma or degree for its successful performance. 

Eliminating the currency of diplomas would lead to a huge demand for 
effective tools to accurately assess applicants' and employees' know-
how. Sophisticated assessment tools already exist, and they are being 
used by leading employers such as the US Army, Corning Glass, and 
Toyota. 

For example, a multimedia workstation used by Allstate Insurance Co. to 
teach the 12 essential skills needed by an effective claims agent also 
can be used to evaluate applicants for agent jobs. After an applicant 
spends two hours working on what is basically a specialized video game, 
both the applicant and Allstate find out precisely how the applicant's 
abilities match the 12 key skill requirements. Because interactive 
multimedia training is far more cost-effective than classes, the 
applicant may need only a few hours of training on the workstation to 
make up any shortcomings - a far cry from being sent back to get another 
diploma.

Today, this kind of training and assessment technology is used primarily 
by the largest corporate and military employers. Making competency-based 
employment a universal business practice would provoke the rapid growth 
of commercial HL. The ferment of competition would quickly drive costs 
down while expanding the range and quality of applications. 

Funding for the research and development and venture capital needed to 
nurture this new industry would come from a fraction of the hundreds of 
billions of dollars that would be saved when tax and tuition payers were 
freed from paying fruitless tribute to the diploma mills.

So abolishing credentialism itself would go a long way to stimulate the 
growth of the new HL industry, even as the source of the education 
lobby's political clout is cut off at the root. But that nascent 
industry will not be able to grow fast enough to satisfy the public need 
for education's replacement unless the $450 billion a year that the 
education sector now absorbs is liberated to follow the consumer.

This leads to another essential step in the HL revolution: 
commercialization.Families and students must have freedom of choice when 
it comes to spending their money in the marketplace. But "choice" is not 
enough. Government-controlled institutions need to be replaced by 
private enterprises; although "privatization" is not sufficient, either. 
In addition, the profit motive is essential to driving technical 
innovation forward.

In recent years, school choice has become a hot issue. But choice alone 
is an inadequate strategy to achieve the benefits of a market economy in 
the learning sector, or to unleash the growth of the strategically 
crucial HL industry. Because classroom teaching is obsolete in the HL 
era, choice offered in the form of "vouchers" to pay tuition for schools 
are as irrelevant to hyperlearning as choices of horses are to modern 
transportation. 

Instead, we need to form a coalition that demands the commercial 
privatization of the entire education sector, based on a strategy of 
microchoice using a financing mechanism of microvouchers.

If your choice in television programming worked the way school choice is 
proposed, changing channels from HBO to CNN would require unplugging the 
TV set, taking it back to the store, exchanging it for a different 
model, and moving to a new neighborhood. In reality, of course, video 
choice among dozens or even hundreds of options requires no more effort 
than pushing a button. Similarly, modern HL technology can offer the 
individual even more choices of "teachers" and "schools" than a cable TV 
has channels. HL's broadband, intelligent, multimedia systems permit 
anyone to learn anything, anywhere, anytime - and with grade A results - 
by matching learning resources precisely with personal needs and 
learning styles.

Using modern electronic card-account technology, microvouchers can allow 
individual families or students to choose specific learning products and 
services not just once a year or once a semester, but by the week, day, 
or hour. Unlike vouchers for school or college tuition, microvouchers 
will create a true, wide-open, location-free, competitive market for 
learning which has the elasticity to efficiently and quickly match 
supply and demand.

The hyperlearning revolution is inevitable: It is being driven by the 
unstoppable, onrushing advance of knowledge-age technology. The 
businesses that seize the HL initiative today are the ones most likely 
to attain leadership in the new economy.

Revolutionary changes in American history have almost always come from 
the grass roots up, not from Washington down. Abolishing credentialism 
by implementing HL in the workplace, commercializing learning through a 
new growth industry, and demanding real choice in learning environments 
are all processes that can take place in the free market - independent 
of the government. 

So there you have it. Hyperlearning offers information industry leaders 
one of the most rewarding opportunities any business can hope for: 
solving some of the world's most critical social problems, building the 
key industry of a new age, opening the floodgates to a worldwide 
economic boom, and, in the process, creating billions of 

dollars in new sales and profits for your stockholders. 

Are you ready to get started? Great. Let's do lunch.  ===


Copyright (c)1993 Wired Magazine



