By EARL ANTHONY WAYNE
Former U.S. ambassador to Mexico and public policy fellow at the Woodrow Wilson International Center in Washington, D.C.
(On Jan. 25, Ambassador Wayne offered a conference on bilateral cooperation in the fields of education, innovation and workforce development at the Woodrow Wilson Center’s Mexico Institute’s Innovative Forum. This is a transcript of that presentation.)
During my years as U.S. ambassador to Mexico, I grew increasingly concerned by the large gap between the amount of trade and coproduction going on between Mexico and the United Sates, and the numbers of education exchanges, students learning together, researchers and scientists working together, and the limited innovation going on in a U.S.-Mexico context.
The two countries trade some $1 million dollars a minute and manage 1 million legal border crossings a day. Mexico is the United States’ third-largest economic partner and the second-largest export market for U.S. goods and service. While for Mexico, the United States is by far it largest economic partner and export destination.
However, Mexico was ranked Number 9 among the countries with students studying at the post-secondary level in the United States. And, Mexico is only the 12th ranked country for U.S. students studying abroad. (While some of the lower level of U.S. students studying in Mexico is due to security concerns, even taking that into account, the number should be higher given the intense ties between the two countries.)
I also found that though we had some impressive U.S.-linked R&D centers in Mexico, such as the GE facility in Queretaro and the Intel facility in Guadalajara, many Mexican innovators/entrepreneurs moved or traveled to the United States to find the support and environment needed to take their ideas forward.
This was not a good situation for either country from the perspective of: 1) employee skills needed by businesses operating in both countries; 2) developing potential Mexican talent to further the joint production platform across North America; or 3) deepening mutual understanding between two neighbors facing tough challenges that need cooperation to be managed well.
Thus in 2013, the Mexican Foreign Relations Secretariat (SRE), the U.S. Embassy and State Department, and Mexico’s Public Education Secretariat (SEP) began to collaborate to address these problems. They came up with a joint proposal and won the approval at the very highest level in each government to launch an initiative.
The result was FOBESII: El Foro Bilateral de Educación Superior, Investigación e Innovación, or the Bilateral Forum on Higher Education, Innovation and Research.
Core groups worked to bring together government agencies, including science and research entities, universities, university associations, private foundations, businesses and business associations to identify ways and means to change the situation and to increase bilateral exchanges and joint work.
We established working groups which identified barriers to improvements and possible themes and channels to increase exchanges. These included a range of options including four year scholarships, joint research projects, university-to-university agreements, and shorter term student experiences in the other country. The groups identified English language capacity as one key area needing investment.
Funding was very hard to come by and sustain. But the biggest boost was provided the Mexican Public Education Secretariat, which put in about $35 million in 2014 and then lesser amounts in following years, reaching a total of about $60 million by 2018.
We also reached out to state governments. In Mexico, the State of Mexico (Edoméx), Hidalgo, Jalisco and Puebla were eager partners, for example, while California, Arizona and Texas signed up from the United States.
Several foundations joined in, including Televisa and Santander during my years and more recently the Jenkins Foundation joined the effort. We also enlisted members of the U.S.-Mexico CEO Dialogue.
On the U.S. side, new government funding was largely through the 100,000 Strong in the Americas program, which supported joint projects between U.S. and Mexican universities and which was funded with many U.S. private-sector grants.
While FOBESII tried to encourage growth in all types of exchanges and study-abroad programs, the biggest jump in recent years was in short-term visits to help improve English skills.
As you may know, only about 13 percent of Mexican adults say they speak English, and 9 percent say they speak it well. Mexico ranks 6th in Latin America for English proficiency. That is concerning given its important economic and other ties with the United States.
The focus on English courses had great potential benefits, as I saw first-hand, in experience for Mexican students and for expanding English capacity, which is very much of value in a work career and for future education. The relative costs were low. Two foreign ministries could facilitate short-term visas.
Results from this effort were encouraging, even after Mexican funding was drastically reduced from 2015 on, due in large part to dedicated individuals from both sides of the border.
Some 150,000 Mexican students, many of them from low-income families, came to the United States for a range of programs, but mostly to study English. Some 300 U.S. educational institutions and 700 Mexican institutions participated.
Over 100 new university-to-university agreements were fostered.
The 100,000 Strong in the Americas program funded nearly 50 university academic projects.
The two national science academies created 12 other joint projects.
Major U.S. universities in California, Texas and Arizona created new joint programs with Mexican counterparts, and universities from many other U.S. states demonstrated serious interest in expanding cooperation. Some 15 U.S. universities now have permanent offices in Mexico.
However, the results fell well short of the goals we hoped to see when we launched the efforts in 2013.
The Mexico team had set a goal of 320,000 Mexican students with some sort of U.S. educational experience by 2018; they were struggling to reach half of that number late in 2018.
I sincerely believe that both countries will benefit greatly from finding ways to expand these exchanges and learning opportunities. The numbers of Mexicans studying in the United States dropped across the board in 2017 and that trend likely continued into 2018.
I hope Mexico can find ways to work with its executive branch to restore a higher level of funding for these programs.
Particularly important for Mexico’s future competitiveness and ability to keep pace with the technological changes ahead is the funding of more Mexican graduate students to study in the United States.
Also, there are great opportunities for forging public-private partnerships so students can do internships with Mexican and U.S. companies. The Fulbright program already does this. Again, the Mexican executive branch could funds or ways to incentivize the private sector to participate. One would need seed funding for the U.S. internship visas, for example.
And, there is also some innovative cross-border instruction going on that could be expanded with additional funding. This includes the State University of New York’s Collaborative Online International Learning courses (COIL), where professors from campuses in the United States and Mexico co-teach courses in both locations.
Effects of Industry 4.0 and the Need to Invest in Workforce Development
For policymakers concerned with the future growth of Mexico’s economy, it is important to look at this issue from the perspective of the needs the economy already faces and the likely effects as additional waves of technology reshape key manufacturing sectors, the workplace and job markets in the years ahead.
I had the opportunity in 2017-18 to do a study of workforce development needs across North America: Mexico, the United States and Mexico.
All three countries already face alarming skills gaps, with employers saying they cannot find the skilled workers they need now, and those skills needed are going to evolve rapidly with the incorporation of new technology in the years ahead.
A January 2019 Organization for Economic Cooperation and Development (OECD) study notes that about half of Mexican CEOs say they don’t have the needed skills in their sectors and that Mexico’s higher education institutions are not producing the graduates they need.
A 2017 study by the McKinsey Global Institute adds the forecast that up to 10 percent of all Mexican workers (7 million) might need to acquire new skills or change jobs because of technological/workplace changes. (McKinsey estimated that up to 54 million or 32 percent of workers in the United States face the same potential changes.).
Both Mexico and the United States already greatly underinvest in labor market programs, according to OECD figures. Mexico is dead last among OECD countries and the United States is. eighth from the bottom.
The January OECD study, titled “Educación Superior en México: Resultados y Relevancia para el Mercado Laboral,” identifies major problems in how well Mexico’s higher education system is preparing students for the evolving job market, which confirms conclusions we also reached after our study.
Mexican President Andrés Manuel López Obrador has a very ambitious program aimed at youth employment, which will no doubt provide good opportunities to deserving young people, but Mexico needs to address the quality of its educational offerings, as well as expanding access for its young people to education and jobs – they need the skills to succeed.
This is true of Mexico’s current workforce, as well as young people preparing to enter the workforce. At present, Mexico does not have an effective system to adequately address skills training and re-training.
Mexico’s Congress can help assure that both goals are pursued effectively with good skills.fused curriculum informed by the current and future needs of the workplace.
Let’s take a quick look at some of the findings of the World Economic Forum’s (WEF) 2018 Future of Jobs Report:
Among all the countries surveyed by the WEF, 42 percent of workforce skills will change across all jobs from 2018 to 2022.
Some 54 percent of workers will require reskilling or upskilling.
Some 50 percent of companies expect to reduce full-time workers, but almost 40 percent expect to expand.
Talent will be a major determinant of the location of production – more so than labor cost.
Machines will take on more and more labor currently being done by humans.
In this situation, the WEF proposes a new model for adopting new technology where reskilling and upskilling are built into normal businesses practices, and governments should support this evolution in the business model with policies, programs and investments.
The WEF’s look at North America finds that the primary determinant of where a business locates its production will be talent availability for 10 of 11 sectors surveyed. Thus, you need to have well-skilled workers and good educational programs.
The WEF also estimates that the reskilling needs are costly but manageable.
At the Wilson Center, we propose that Canada, Mexico and the United States collaborate in taking on the retraining and reskilling tasks ahead.
The Wilson Center proposal is that the three federal governments should establish a trilateral task force to provide an umbrella for public-private, federal-sub-federal working groups. These groups would identify best practices and develop proposals for cooperation in strengthening workforce development efforts across the three countries.
The United States-Mexico-Canada Agreement (USMCA) opens a window for such cooperation, as it includes a chapter providing for the three countries to collaborate on competitiveness.
The working groups should focus in four areas: 1) Apprenticeships and other types of work-based learning and technical education; 2) Certifications and related issues; 3) Data collection and transparency; 4) Best practices to prepare for the Fourth Industrial Revolution.
The report offers detailed explanations for work in each of these areas.
With collaboration, each of the economies in North America and our joint production platforms can become stronger for the global competition ahead and for facing the transformations of Industry 4.0.
Mexico has initiated a very impressive program to provide jobs with mentorships and scholarships for needy youth.
However, if these programs do not incorporate good, focused curriculum to teach valuable skills for the job market and include ways to measure the quality of the training results, the new programs could fall far short of helping the young people or Mexico over the longer term.
Similarly, Mexico needs to keep working hard to improve the quality of training in secondary schools, in vocational training and in higher education, to prepare its students for the jobs of today and tomorrow.
Finally, Mexico has few programs at present to help retrain or reskill existing workers, and we know that key sectors in Mexico’s manufacturing economy will be hit hard by technological changes.
Consider the emerging jobs and job roles. Consider the emerging skills needed. And consider the WEF’s recommendations for all governments.
Is Mexico doing this? Can the members of its Congress encourage such steps?
Finally, consider the suggestions for private sector action.
It is going to take collaboration to have success: governments, educational institutions, the private sector, unions, NGOs, etc. And it needs collaboration and mutual learning across North America.
Earl Anthony Wayne is a public policy fellow at the Woodrow Wilson Center and career ambassador (ret.) from the U.S. Diplomatic Service, where he served as U.S. ambassador to both Mexico and Argentina, as well as assistant secretary of State for economic and business affairs.