Davos 2014: Is higher education a waste of money?

Graduates in 1936 Higher education may not bring the rewards it did in years gone by

There's something endearing about the Open Forum.

It provides a crumb of comfort for those who feel that the annual get-together of the rich and powerful at Davos is a bit elitist and exclusive.

The organisers of the World Economic Forum arrange for a handful of sessions near the conference centre that anyone can attend.

The audiences tend to be younger and have a higher number of women attendees than those in the main conference, not to mention more casually dressed and Swiss members.

So, where better than a Davos school hall to discuss whether going to university is a waste of money?

Davos school Where some of Davos's own local brains are trained

The debate was opened by Sean Rush, chief executive of JA Worldwide, which provides entrepreneurship and vocational training.

He said that he'd funded his four children in the US through a total of six degrees, at a total cost of $1.2m (£724,000). He also mentioned that he'd funded himself to get his third masters degree in his fifties and that he thought it had been worth the money (although he joked that he'd had to get rid of the dog to do it).

Pay and security

Also on the panel was Zach Sims, the twenty-something co-founder of the online coding tutor Codecademy, who dropped out of Columbia University to found his business.

Zach Sims Zach Sims says universities should get rid of "the detritus" in college education such as sports teams.

He said the key problem was that people were not being given relevant skills and were ending up leaving university in huge debt before going off and getting a poorly paid job that they could have done without a degree.

There was no doubt about the value of higher education in the mind of Angel Gurria, secretary-general of the Organisation for Economic Co-operation and Development (OECD).

"Absolutely it's worth it - go for it," he said.

He pointed out that people with college degrees have greater job security and get paid considerably more than those who do not.

But he was also convinced by the argument that introducing some online components into courses would be a good idea.

1,500 new universities

Daphne Koller, who is a professor of computer science at Stanford University and also co-founded the online education company Coursera, said combining online and face-to-face learning was the key to improving the quality of courses while also reducing the cost.

Angel Gurria Angel Gurria believes getting a degree is worth the money

She pointed out that it could also be the answer to the education needs of developing countries. She said that India wants to increase its proportion of college graduates from 13% to 30%, but to do that in the traditional way would require the building of 1,500 new educational establishments, something that seems unlikely.

For the past two years, Coursera has been providing Moocs, which stands for Massive Open Online Courses.

The educational materials are free and students only have to pay if they want to take a qualification at the end of the course.

For Mr Sims, the biggest shift coming is getting rid of what he calls "the detritus" involved in college education such as sports teams.

He says there is a big shift away from just taking normal educational methods and putting them online, and instead allowing people to get bite-sized bits of knowledge when they need it.

Open Forum Open Forum attendees are a more mixed bunch than at most other Davos events
'Changed my life'

But other panellists stressed the social benefits of the parts of college life that do not lead directly to work-related skills.

Gianpiero Petriglieri from Insead said that if he had had the opportunity in the first few weeks of his university course "to click and close that window" on some of his professors then he would have done so, because they really got on his nerves.

"But then they changed my life," he says.

On the other hand, he said that "any institution not preparing itself for some sort of blended model is dooming itself to extinction".

Angel Gurria concluded that despite debt and misdirected skills problems, it was still worth getting a college degree. In 2008, people with a degree in OECD countries earned on average 75% more than those without one, he said. Today that figure is about 90%.

"Not everyone can be a dropout like Bill Gates or Zach or [Mark] Zuckerberg," so do take that extra loan and get a degree, he advised.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories


BBC Business Live

    Bank culture Via Email David Stanley from Richmond

    writes: "Where does all the money [from fines] go? Presumably some goes in compensation to the victims, but the rest? To pay off the deficit?"

    Via Twitter Lauren Davidson, business reporter at The Telegraph

    tweets: "From Times Mag profile last month: CEO Harriet Green fixed Thomas Cook, earned less than her male predecessor."

    07:40: Thomas Cook

    A little more on Harriet Green's departure from Thomas Cook. "I always said that I would move on to another company with fresh challenges once my work was complete," she says. "That time is now." The statement adds that when Ms Green joined, the company's share price was 14p. Today, it is 137.9p.

    Via Twitter Simon Jack Business correspondent, BBC News

    tweets: "Harriet Green steps down as CEO of Thomas Cook after only 2 years. She once told me she never stays anywhere for long but this is very brief."

    07:30: Thomas Cook
    Thomas Cook

    Overall, Thomas Cook, which has been struggling to compete with the rise of internet travel agents, made a statutory pre-tax loss of £114m for the year to the end of September. It's an improvement on the year before, when it made a £163m loss.

    07:24: Compass profits
    Students receive their lunch at Salusbury Primary School in northwest London

    Global catering and support services firm Compass group - if you have never eaten their food, there is a very strong chance your children will have eaten it at school - has reported a 5.4% rise in pre-tax profits to £1.16bn for the year to the end of September. "Food is and will remain our core competence and is backed with some strong support service businesses," the company says.

    07:18: SAS enlists Flybe

    British low-cost airline Flybe has announced it has signed an agreement with Scandinavian carrier SAS, to operate some of its short haul services. It's a white-label deal, meaning SAS insignia will be displayed on the planes, and the flights will seem to the outsider like a regular SAS service.

    07:08: Thomas Cook

    Holiday travel company Thomas Cook has announced that its boss, Harriet Green, is to step down. She will be replaced by Peter Fankhauser, currently the chief operating officer. Ms Green only joined the firm two years ago.

    07:04: Royal Mail goes to Parliament

    That's all happening at 9:30, by the way.

    Royal Mail goes to Parliament 07:02: Via Blog Kamal Ahmed BBC Business editor

    Royal Mail chief executive, Moya Greene, will for the first time appear in public to make the case about why the universal, UK-wide postal service is in imminent danger. And if the written evidence Royal Mail has sent to the committee is anything to go by, her words will certainly be punchy. The written evidence calls for urgent intervention by regulator Ofcom and warns if not: "A tipping point could be reached. The universal service could become unviable before effective changes can be implemented."

    06:52: Bank culture Radio 5 live

    One more from Lord McFall on Wake Up to Money. He says senior managers at banks "have often pleaded ignorance or stupidity rather than culpability" and that has to change. He cites an example of four top executives at Swiss bank UBS who came before the Committee on Banking Standards. Asked if they knew the name of their "star performer" who had just lost the bank $2bn, they replied that they didn't, he says. "The first they had heard of it was on the Bloomberg wires," Lord McFall adds.

    06:46: BG boss' pay BBC Radio 4

    Mr Walker adds that BG Group's pay offer illustrates "poor corporate governance", and "puts fund managers in a position where they are forced to approve" the £25m remuneration package for new boss Helge Lund.

    06:44: Bank culture Radio 5 live
    Air force

    The £27bn that banks have paid in fines for the mis-selling of Payment Protection Insurance (PPI) outstrips this year's defence budget, says Lord McFall. Since the start of the financial crisis, banks have paid out more than £38bn in fines, for a litany of sins. What makes matters worse is that he and other MPs were warning the banks over the dangers of PPI for 20 years, before the mis-selling scandal broke, he adds.

    06:32: BG boss' pay BBC Radio 4
    Mr Lund

    "A red rag to anti-capitalists," is what Simon Walker, from the Institute of Directors (IoD), calls the proposed £25m pay packet for the incoming head of gas explorer BG Group, Helge Lund. He tells Today "you could not calculate a measure that is more likely to inflame" politicians, and the general public, who will balk at the sum, which is "more than 10 times [Mr Lund's] pay in Norway", where Mr Lund ran the state's oil firm.

    06:24: Bank culture Radio 5 live

    Lord McFall tells Wake Up to Money initiatives to change the culture in banks are "fledging and fragile". He adds: "Rhetoric at the top has been implemented, but not carried down the line [into bank departments]". The aggressive sales culture of the banks will be eliminated eventually. But the banks can't do it alone, he adds. He is also calling on the banks to provide annual progress reports to Parliament's Banking Standards Committee.

    06:14: Welfare reforms

    The UK's National Audit Office has warned that the cost of introducing major welfare reforms could run into billions of pounds if the IT system needed to deliver the changes isn't completed on time. The Universal Credit programme has been beset by IT problems, and the chairman of the public accounts committee, Margaret Hodge, has accused the government of throwing good money after bad. Ministers insist they are getting value for money.

    06:10: Bank culture Radio 5 live

    UK think tank New City Agenda says it will take "a generation" to fix the culture of the banking industry, in a report published today. The organisation's chairman, Lord McFall, who is also former chairman of the Treasury Select Committee, tells Wake Up to Money the report is the first to have gone inside the banks - it visited 11 of them - so provides a real insight into what is going on, and it's not pretty.

    06:05: Clegg on immigration

    The UK's deputy prime minister, Nick Clegg, has said he supports further restrictions on benefit payments to migrants from elsewhere in the European Union. Writing in the Financial Times, the Liberal Democrat leader also warns David Cameron against trying to limit the number of EU migrants coming to the UK.

    06:00: Matthew West Business Reporter

    Plus Moya Greene, chief executive of the Royal Mail, will be giving evidence to the Business Committee - as will a number of her rivals - on competition in the postal sector and the government-mandated obligation to deliver to all UK addresses. As always, get in touch on email at bizlivepage@bbc.co.uk or on Twitter @bbcbusiness.

    06:00: Joe Miller Business Reporter

    Morning. The president of the European Commission, Jean-Claude Juncker, will set out details this morning of a €300bn plan intended to revive Europe's flagging economy. Most of the money is expected to be provided by the private sector. More on that in the next few hours.



From BBC Capital


  • Ladybird - a robot designed to help with farm workClick Watch

    From weed detecting to a robotic dairy - the tech that could help farmers be more efficient

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.