Preparing American Students to Succeed in a Global Era of Change

Thanks for that generous introduction.

It’s a pleasure to be in the company of teachers, leaders in education, and all of you who support education in many ways.

I’d first like to get something off my chest that’s been bothering me for years. I want to apologize for my behavior in the classroom 40 years ago!

Of course, I shouldn’t have to apologize too much, because in those days, teachers always won!

I thought seriously about becoming a history teacher myself when I entered college back in the mid-l970s.

And, I hope to one day do some guest teaching in my life after UPS.

I also have several good friends who are professors. And I’ve learned they can be quite resourceful!

As mentioned in the introduction, my wife, Sherry, and I host an annual International Business Symposium at my alma mater, Delta State University, in Cleveland, Mississippi.

We gather together international business leaders, experts from non-governmental organizations, and other seasoned international professionals to share their global economy experiences with the DSU students.

I even twist a few arms of my college professor friends to join me in the trek to Cleveland, Mississippi - probably not their first choice for destination travel!

Outsourcing works both ways, I remind them!

I know my own world view coming out of college was pretty much limited to the Mississippi Delta. I had never traveled north beyond Memphis.

So, I think it’s especially important to expose students in American rural communities to our changing world of business.

And I know I don’t have to tell any of you that regardless of where education takes place in America - whether rural or urban community - it’s more vital than ever to America’s future.

Why does a business person feel so strongly about the education priority?

In large part, I’m influenced by what I’ve seen in leading UPS’s international operations in 200 countries and territories.

If you think about it, UPS has a distinct window into the world economy.

We’ve always been the link between the makers of goods and those receiving them.

We now deliver more than 15 million packages every business day. That’s the equivalent of two percent of the world’s GDP.

Today, the linkage between the sourcing of goods and the customers receiving them is stretched like a rubber band around the planet.

Large companies are innovating - 24/7 - across hemispheres…and entrepreneurs are increasingly relying on the Web and ever-simpler technology applications to grow through export.

Given all this open-trading momentum, I have to smile when I hear populist commentators or political candidates talk about taking back jobs that have been outsourced to other countries.

There’s an implication that if we choose to, we can go back to a late 20th century America…that we can stop this 21st century merry-go-round and just get off.

The reality we see at UPS is America is already knee-deep in the interdependent world economy that Tom Friedman wrote about in “The World Is Flat.”

What we also see is that some of the fastest-growing trade lanes UPS serves don’t even involve the U.S.

They are the Asia-to-Europe and intra-Asia lanes.

Trade within the India-Japan-Australia triangle - of which China sits in the center - now exceeds trade across the Pacific Ocean.

Under Japanese sponsorship, Asia plans to launch its own regional monetary fund. And, China has slashed tariffs and increased loans to its smaller Southeast Asia neighbors.

It’s true the rest of the world still catches a cold when the U.S. sneezes. Forecasts call for the global economy to slow this year from last, due to the U.S.’s projected slowing economy.

Yet at the same time, much of the world - especially Asia - continues on a path to liberalize trade practices.

They’re on a mission to create the top-end jobs that are increasingly the product of a global, digital era.

On the Western side of the world, the U.S. seems to be mired in a debate on whether we should set a course to race to the bottom.

The question becomes, is the global economy something America should fear?

Yes, it’s produced some disruption, just like all transformations in our history have done.

Yes, some jobs have gone offshore. But far more manufacturing jobs have been lost in the U.S. and worldwide due to productivity gains than to outsourcing.

Something you don’t hear much about is that the U.S. has seen a net increase of more than eight million new jobs since August of 2003.

Trade is a big factor. It’s a proven job creator:

• whether they’re jobs that are gained by American companies that are growing through export. Exporters as a whole add jobs much faster than non-exporters.

• whether they’re among the more than five million jobs gained through non-U.S. companies that have located operations in the U.S. In my home state of Mississippi, for example, 4,000 new jobs are coming to Tupelo at a new Toyota manufacturing plant there.

• or whether they’re jobs gained by those engaged in the trade process. At UPS, for every increase of 40 import or export packages that touch the U.S., a new job is created.

That’s the present. What lies ahead?

During the next decade, we can expect to see a billion new consumers from the BRIC nations of Brazil, Russia, India and China achieving middle-class standing.

These consumers are already seeking high-quality Western goods, according to a recent UPS survey of upwardly mobile Chinese consumers.

And they seek American services.

Much is made of the American trade deficit in goods. But we’re also running a healthy surplus in the export of services.

In fact, the U.S. is the world’s leading exporter of services.

During the global era’s next wave, we can also expect to see people and businesses increasingly buying and selling from anywhere and everywhere on the Web.

Web users are expected to increase from a billion and a quarter users today to two billion three years from now in 2011.

And, we’re going to see multi-national companies expanding not just from roots in the U.S., but from nations all over the world.

Your students may have opportunities to work offshore for American-born companies like UPS.

Or, they might find excellent career prospects at Toyota, Sony, or WIPRO.

Bottom line, the next wave of the global economy offers a lot of promise for a millennial-generation of Americans who are willing to do something we’ve always been the best in the world at doing - adapting, learning, and competing.

We’ve all heard, read, or know personal stories about American workers who’ve lost jobs due to outsourcing. If you’re one of the people affected, it’s a tough pill to swallow. No question.

But has the last chapter been written in such stories?

Here’s an example of what I mean.

A few years ago, a young man by the name of Jason Warrell was laid off as a machine operator from a company called Delphi in Ohio.

He then moved to Louisville, Kentucky, and applied to UPS’s Metro College program.

Through Metro College, UPS pays a salary and tuition, bonuses for good grades, and provides health-care benefits for part-time employees at its U.S. Worldport Air Hub.

Metro College students take college courses in affiliation with several state-funded Louisville-area schools.

Jason is now nearing college graduation with a business degree in management. His long-term prospects and those for his young family are better than ever.

We have a similar tuition assistance program to Metro College that covers much of the nation called Earn and Learn.

The point is, there are financial-assistance doors open out there for Americans with the initiative to move forward… to retrain…and to compete.

We’re still a nation of opportunity.

And there’s no reason the U.S. can’t enjoy even greater prosperity right alongside the rise of Asian nations like China and India.

But it’s also true that we need to align our resources with the opportunities of the future.

Retraining and education need to move up on the U.S.’s priority list if we’re going to prepare our students and workers for the world economic era we’ve entered.

To that end, I believe there are three educationareas where the public, academic, non-profit, and business sectors can work in concert to make a big difference.

I want to spend the remainder of my remarks touching on each of those.

The first involves retraining.

In that regard, I think it’s useful to look at a model that’s working well in Sweden, as well as an example much closer to my home.

Sweden is a small country that’s highly dependent on exports and the global economy.

Trade as a portion of the economy has doubled in Sweden since 1970.

As a result, overall productivity is high. Incomes are growing rapidly. And the nation’s trade balance is running a surplus.

At the same time, Sweden is highly exposed to the economic uncertainties and personal dislocations that are part of a world of rapid change and creative destruction.

The Swedes have built a model to align with the global era that encourages global competition and constant business course corrections.

Equally important, Sweden also provides its citizens with a strong social safety net that includes health care during employment transition, and a well-funded worker retraining effort.

In Sweden, unemployment benefits don’t go on indefinitely.

If a Swede has not found a new job within 28 months of the start of unemployment benefits, he or she MUST BE retrained in a new occupation.

Sweden spends about US$7,700 per person on retraining compared to US$1,800 in the U.S.

Embedded in the Swedish culture is the belief that given opportunity citizens will take responsible attitudes about re-training for work.

And indeed, a higher portion of the working-age population is employed in Sweden than in many other industrialized countries.

Closer to home, the state of Georgia has developed a program called Quick Start that serves as a liaison between businesses seeking skilled workers and the state’s network of 34 technical colleges.

Quick Start, for example, has helped displaced Georgia manufacturing workers train at Columbus Technical College and Coosa Valley Technical College to qualify for jobs in expanding health care fields at medical centers near those schools.

Retraining features like those found in the Swedish model and Georgia Quick Start are worthy of our attention in helping American workers to succeed in the global era.

Turning to younger people and education, my second priority is to shine an early-learning spotlight on world cultures and the importance of social studies.

I serve on the board of an Atlanta-based non-governmental organization called the Southern Center for International Studies.

UPS directly supports a Southern Center program that’s created a teaching module called the “World in Transition Series.”

The series provides a lesson plan for elementary and secondary teachers to address a broad cultural context including a country or region’s history, economy, geography, prominent religions, and languages.

The module is designed to stimulate student curiosity about world cultures at an early age.

Why does that make a difference?

Dean Rusk, the late former Secretary of State to John F. Kennedy and Lyndon Johnson and a native of Georgia, used to tell a personal story about that.

Secretary Rusk said he was exposed to learning about the far off land of Mexico as an eight-year-old in the third grade of his rural school in Cherokee County, Georgia.

He said the classroom experience that sent him to Mexico in his imagination became the catalyst for a life-long fascination with Latin America and foreign lands.

It propelled him on a personal journey that culminated in leading the Department of State throughout the l960s.

Yet, I suspect even someone as visionary as Secretary Rusk might not have imagined how important cultural awareness would become a half century later to our national security.

Three years ago, the Air Force contracted with the Southern Center to adapt its ”World in Transition Series” to become the core curriculum for all Air Force cultural affairs training for all levels of officer training.

That includes senior and junior ROTC programs at universities, colleges, and high schools, and the Air Force’s officer training program.

The reason is the escalating importance of cultural awareness to the success of military leaders in regions like the Middle East and, ultimately, to achieving our national security goals.

Knowledge of world cultures is no less important to our success in world commerce. And that brings me to my third priority.

That involves how we prepare America’s post-secondary students and young people for business careers in the global era.

I know that’s a key focus many of you have.

I’ll toss out a few suggestions based on my experiences and observations.

One thing I’ve seen firsthand is that the global era is also a technology era.

Technology is such a powerful tool in helping large businesses to act small and small businesses to act large.

It also can help businesses of all sizes to transcend language barriers in conducting cross-border business.

Technology is no longer just something IT managers need to understand. Everyone across functions needs to have some familiarity with it.

Just this week, UPS held its annual Management Conference that gathers together our senior managers from around the world.

This year, we devoted a big chunk of that valuable time to a technology learning session in which we engaged our leaders from accounting… to legal… to operations… in hands-on training with some of our newest technology applications.

Of course, the ability to speak and understand foreign languages is also invaluable.

Today, the global language of business is English. And the Chinese understand that.

Did you know there are more Chinese people speaking English than there are Americans speaking English?

Tomorrow, the language of business may be English and Mandarin.

I gave a talk in Chicago recently, and I learned that the Chicago Public Schools are teaching 3,000 public school kids Mandarin. What a great program!

At Georgia Tech University in 2001, around 2,000 engineering students were taking foreign language training. Today, that number has more than doubled. That’s another good sign.

The Chinese value trust above all in establishing relationships. And there’s no question if a Western person can speak Mandarin, he or she is going to have a tremendous head start in building trust.

Earlier, I talked about the value of cultural awareness in earlylearning and to national security. It’s also invaluable to international business success.

I read recently where the MTV Networks International chief spends hours studying the local customs, history and traditions of the places he plans to visit.

Academic programs at home and abroad that encourage a proactive focus on culture-specific values can help students begin to think more critically about the possible challenges they may face in business.

Eager U.S. students can beef up their cultural resumes by:

• Volunteering for summer projects and internships that include working cross-border with team members from other parts of the world.

• Students might consider taking time off to participate in community projects abroad, like Habitat for Humanity.

• And, students can benefit from programs developed by a national association called The World Affairs Councils of America, which operates a network of 87 affiliate local organizations around the country.

The World Affairs Councils sponsor an international network for young professionals and students with an interest in international cultures and in engaging the world around them.

Through the Councils’ young professionals’ network, students can participate in language groups and a range of cultural awareness discussions.

These are avenues that were optional to business school students a generation ago. But today they’ve become an expectation.

If it sounds like business is asking more of graduates today, in some ways we are.

The bottom line is that we as students, educators, and workers are living through times of great change in which global competition is the new reality.

It’s not something to fear. But we do need to adapt.

Education will play a huge role in determining whether we’re going to become a nation of “two-Americas” as some believe, or an America that’s twice as strong.

As Stephanie Bell-Rose, president of the Goldman Sachs Foundation put it, “Preparing today’s students for success in the global economy is the single most important task facing U.S. education.”

That’s certainly what we see day in and day out at UPS.

We all have a stake in this great task in each of the communities we serve whether it’s Northern Mississippi or Northern New Jersey.

If we make education a national action priority and work together, our students will be well prepared to win the race to the top. And the rewards will be great.

Thanks for your attention. I’d be happy to hear your questions or comments.