How do we prepare our children, and our finances, for the fourth industrial revolution?
I was chatting to a couple of financial planners about how clients save for their children’s tertiary education. It was no surprise to discover that most people are completely underfunded in this area and that more parents need to plan on how to pay for their children’s education; but what was surprising was that all agreed that when it came to their affluent clients, many of them were not even considering university education for their children.
This goes beyond the #feesmustfall campaign and the concern about the future of South African universities. The question they were asking was whether university degrees are relevant in the new economy. A lot has been said about the so-called fourth industrial revolution which is described as the fourth major industrial era since the initial industrial revolution which started in the 1700s. According to Wikipedia, the Fourth Industrial Revolution is described as a range of new technologies that are fusing the physical, digital and biological worlds, and impacting all disciplines, economies, and industries.
Experts agree that we cannot even conceive of the jobs of the future and have very little understanding of what those jobs will be. For a moment, consider that just ten years ago if you told someone you were a “blogger” or “user experience design expert” or “social media expert” no one would have a clue what you were talking about.
Is a university degree still relevant?
Questions are being asked about whether a university degree can prepare you for this uncertain future. Globally we are seeing a significant rise in the number of unemployed youths with university qualifications and parents are asking why they should be spending hundreds of thousands of rands on a qualification that may be useless when it comes to trying to find a job.
Questioning the value of a degree is a brave step for parents, as it goes against the thinking in which we were raised: that you go to school, work hard, get good marks so you can get a place at university. Then work even harder to get a qualification that in turn guarantees you a job for life.
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While it is occurring to us that this path is no longer relevant, what are parents doing to equip their children for this new and uncertain world of work?
According to the financial planners, parents are still saving towards their children’s futures but many are putting money away so that they can help their child start a business. Entrepreneurship is considered a vital life skill – one that will enable their children to find a way to create their own jobs rather than rely on a company to hire them.
Parents are doing the maths and deciding that rather than spending R400 000 putting their child through four years of university (the expected cost with accommodation), they could provide this amount as seed capital for a business venture. They see this as an investment in entrepreneurship. Of course, this means you have to have the money available to assist them rather than trying to wing it from your monthly paycheque.
Last year I met a woman whose 17-year-old son was developing a fintech app and he has asked for funding. She asked me what she should do. Is giving him the money spoiling her child? Should she tell him to work for the money or give it to him as a loan? My reply was that as long as he is able to put together a proper business plan with estimated returns, a marketing strategy and cashflow analysis, why not view the funds essentially as education costs? Of course, if she is savvy she should at least try get shares in his business in exchange for the money!
Online education opportunities
Many parents have also realised how much information and education is available online. There are thousands of online courses aimed at tertiary education level which allows you to tap into expertise outside the borders of your country. Even Harvard and MIT offer online courses. As change agency WJSchroer says, “Higher levels of technology will make significant inroads in academics, allowing for customized instruction, data mining of student histories to enable pinpoint diagnostics and remediation or accelerated achievement opportunities.” In short, technology has made education more relevant, flexible and specific.
Personally, this is a world I have discovered through both my sons. My youngest is a tech fundi and obsessed with YouTube DIY videos. At the age of 13 he has completely taken over my IT, integrating my various devices and running my YouTube channel – including filming and editing. He also loves everything to do with mountain biking and every Friday works as an intern for a bike mechanic, learning how to repair bicycles. He is a natural entrepreneur – constantly looking for business ideas, his current one being setting up a production studio. He excels academically, especially at maths and science, but I am not sure university is the route he is going to take.
My elder son is very different and started me on a journey to find ways to complete his education that did not involve high-stress, academic environments. He is special needs, Aspergers, and prefers the world in his head rather than the rough and tumble – and sometimes ugliness – of the world around him. He is a brilliant writer and wants to be a novelist, but school and all the pressure that goes with it was drowning him. So, this year he is completing his matric by doing the American school-leaver’s certificate called the GED. It is available online and is an incredibility well designed programme which is recognised by South African tertiary institutions. This year I will spend the grand total of R2 500 on his education. It is very unlikely that he will go on to formal tertiary education, but he plans on doing online courses on screenwriting and learning how to publish and market his novels. We will most likely divert the money we have put aside for his tertiary education towards supporting his publishing initiatives (although I would like to add that he is also currently looking for a part-time job as we require him to earn his own pocket money).
This is a brave new world, and as parents we have to be very brave about the decisions we make for our children. But ultimately the world is richer and more accessible than it has ever been before and given the right support, our children will find their own way.