Failed your exams? Start a business in the playground

If AMERICAN education is so bad, why do foreigners flock to the US to study? The same question applies here. We worry about the quality of our education, but people come from all over the world to be educated in Britain.

There is one obvious and valid explanation - that the students who come to both countries do so because they are coming to the best universities. The problems in America and Britain are not with our elite universities which are excellent, but with the general mass of the school system. But I have seen several items in the last few weeks that suggest that there is a second and rather different reason for admiring both the US and the British education systems, the schools as well as the universities. This is that while we may be less effective at teaching "hard" skills, such as maths and science, than our Continental and East Asian rivals, we have become very good at fostering "soft" and "loose" skills, including creativity, intuition and entrepreneurship. Furthermore, the returns on these skills will be even higher in the next couple of generations than they are now. Most people could be taught to become reasonably competent scientists; it is vastly harder to teach them to be successful entrepreneurs.

On conventional measures the US and UK school systems seem to be about the middle of the pack. There was a squall of stories ten days ago in the US after a report on comparative standards in education put the States towards the bottom of developed countries in maths and science, with the UK doing only a bit better. This is probably right, for there are pretty good comparative statistics going back to the 1960s. I have just seen the results of one such study, discussed at a conference on "Excellence in Education" hosted by the Federal Reserve Bank of New York late last year and published in the March edition of its Economic Policy Review.

This study looks at test scores for several years between 1963 and 1991. The main conclusion I would draw is that there has been a general convergence of scores over this period. Back in the 1960s there were enormous differences between Australia, Sweden and the US at the bottom, and Israel, Japan and Belgium at the top. But by 1991 all the countries are clustered in the middle with not much distance between China and Korea at the top and Ireland and Portugal at the bottom.

The UK does not do at all badly in these charts. We suddenly shot to the top in 1985 and have been above the US right through this period. But I think the bigger message is not one about standards but one about comparative advantage. Given the narrowing of the spread of attainment, it has become pretty difficult to retain a significant national advantage in the teaching of "hard" subjects. I'm not saying the teaching of the three "Rs" is unimportant. Far from it. Rather the message is that any competently-run educational system is going to do this adequately well. Comparative advantage will be in "soft" subjects.

If that is right, educationalists are going to be asked a whole new set of questions, such as "How do you teach entrepreneurship?" To most people that very question will seem pretty odd. Imagine the University of Entrepreneurship of North London. Ridiculous?

Well, no, as two examples show. In Finland there is a government programme teaching people just this. There are lectures, seed funding for new ventures, even subsidies to new would-be entrepreneurs. Is this programme working? Er, not terribly well, I gather. A friend who lectures to these people reckons that it often simply encourages people to start businesses which only produce an adequate living because of subsidies from the taxpayer. But at least the Finns are trying.

The second example is Japan. There they have identified the lack of entrepreneurial zeal as one of the reasons why Japan has failed to recover from recession. They have adapted the word entrepreneur into an-torepurenah - don't laugh, we don't have a word in English either - and are now running lectures, courses, foreign visits, study groups and so on in an effort to generate the appropriate spirit.

Well there is certainly no shortage of entrepreneurship in the US or even the UK. How do we do it?

I suppose part of the impetus comes from relatively low taxes on earned income, and an absence of regulations inhibiting business start-ups. But it can't just be that. I suspect that we teach it, sometimes explicitly, as in the business enterprises that schools run for sixth-formers, but sometimes without really knowing we are doing so. We certainly teach creativity: we have national prizes for creative writing in schools; we have tremendous emphasis on music and drama; we teach creativity in fashion and other design. But I sense that we are also trying to link this creativity with earning money by creating a culture in which people, especially young people, are encouraged to regard setting up a business in their spare time as a fun thing to do.

We have managed to create an educational system that accepts, and even fosters, an element of disorder and encourages questioning. It asks people to look at themselves and the world around them - and think of ways of earning their living other than slogging up corporate or government career ladders.

Isn't this what education should be about? Some people would be appalled at the idea of teaching people to become entrepreneurs. But encouraging people to think for themselves, testing received views, relishing argument and discussion - this is core stuff. It is not a long step beyond that to get people to look at society's needs and desires and use their intelligence to think of ways of satisfying these. Besides, if the Finns and the Japanese think this is a good idea there must be something in it.