Romer was one of the the winners of the Nobel prize in economics this year (2018). He wrote about higher education and innovation. One of his proposals is the introduction of more generous scholarships for students in science and engineering.
His starting point is that to innovate and get richer, we need more and more people doing R&D. Investing more in R&D is not sufficient. You might think that, in the long run, it could be. If firms spend more on R&D, then the wages of scientists and engineers will go up, and this will attract more scientists. However, students lack this information.
One the one hand, giving money to undergraduate students who want to pursue science and engineering is a good way to signal to these students that society wants more scientists and engineers. At the graduate level, though the current funding might be considered adequate, it is very much in the end of (older) professors who can be quite directive. The general intuition, I believe, is that Romer wants to give back to young and bright students some freedom and power in deciding what they want to do. In particular, I think Romer believes that some of these students might be interested in doing work that is less “conventional” (i.e., maybe harder to publish in conventional venues) but more “useful”. In effect, he wants to fight against stagnation in higher education.
Unfortunately, in the last 20 years, innovation policy in the United States has almost entirely ignored the structure of our institutions of higher education. As a result, government programs that were intended to speed up the rate of technological progress may in fact have had little positive effect.
This pattern of outcomes, increased numbers of Ph.D. recipients and steadily worsening academic job prospects, can be explained by increased subsidies for Ph.D. training.
The picture that emerges from this evidence is one dominated by undergraduate institutions that are a critical bottleneck in the training of scientists and engineers, and by graduate schools that produce people trained only for employment in academic institutions (…)
I am not exactly sure why all student unions are not pushing his ideas to governments. It sure sounds attractive: give engineering students more money and get better growth.
I love universities. I have spent almost all my life in them. But, like Romer, I fear that there is a bit too much stagnation. There is insufficient pressure to innovate and too many incentives favouring excess conservatism. Giving back power, not to younger professors, but to actual students, is probably a wise move.
Yet I am somewhat skeptical of Romer’s overall view that increasing the supply of engineers is key. Great many students trained in engineering do nothing even vaguely resembling R&D, and when they do, they do not do it for long. Simply put, graduates go where jobs and money is. It is not the case that we live in a Spiderman world where smart engineering students graduate to go work in an industrial lab developing new robotics.
We need to make the spiderman world possible: make it so that young engineers can start a small company building prototypical exoskeletons for the weaker people to walk again. Do that, and you won’t have a shortage of young new engineers for long.