Category: Economy

  • How CTE inspires long and fulfilling careers

    How CTE inspires long and fulfilling careers

    This post originally published on iCEV’s blog, and is republished here with permission.

    A career-centered education built on real experience

    One of the most transformative aspects of Career and Technical Education is how it connects learning to real life. When students understand that what they’re learning is preparing them for long and fulfilling careers, they engage more deeply. They build confidence, competence, and the practical skills employers seek in today’s competitive economy.

    I’ve seen that transformation firsthand, both as a teacher and someone who spent two decades outside the classroom as a financial analyst working with entrepreneurs. I began teaching Agricultural Science in 1987, but stepped away for 20 years to gain real-world experience in banking and finance. When I returned to teaching, I brought those experiences with me, and they changed the way I taught.

    Financial literacy in my Ag classes was not just another chapter in the curriculum–it became a bridge between the classroom and the real world. Students were not just completing assignments; they were developing skills that would serve them for life. And they were thriving. At Rio Rico High School in Arizona, we embed financial education directly into our Ag III and Ag IV courses. Students not only gain technical knowledge but also earn the Arizona Department of Education’s Personal Finance Diploma seal. I set a clear goal: students must complete their certifications by March of their senior year. Last year, 22 students achieved a 100% pass rate.

    Those aren’t just numbers. They’re students walking into the world with credentials, confidence, and direction. That’s the kind of outcome only CTE can deliver at scale.

    This is where curriculum systems designed around authentic, career-focused content make all the difference. With the right structure and tools, educators can consistently deliver high-impact instruction that leads to meaningful, measurable outcomes.

    CTE tools that work

    Like many teachers, I had to adapt quickly when the COVID-19 pandemic hit. I transitioned to remote instruction with document cameras, media screens, and Google Classroom. That’s when I found iCEV. I started with a 30-day free trial, and thanks to the support of their team, I was up and running fast. 

    iCEV became the adjustable wrench in my toolbox: versatile, reliable, and used every single day. It gave me structure without sacrificing flexibility. Students could access content independently, track their progress, and clearly see how their learning connected to real-world careers.

    But the most powerful lesson I have learned in CTE has nothing to do with tech or platforms. It is about trust. My advice to any educator getting started with CTE? Don’t start small. Set the bar high. Trust your students. They will rise. And when they do, you’ll see how capable they truly are.

    From classroom to career: The CTE trajectory

    CTE offers something few other educational pathways can match: a direct, skills-based progression from classroom learning to career readiness. The bridge is built through internships, industry partnerships, and work-based learning: components that do more than check a box. They shape students into adaptable, resilient professionals.

    In my program, students leave with more than knowledge. They leave with confidence, credentials, and a clear vision for their future. That’s what makes CTE different. We’re not preparing students for the next test. We’re preparing them for the next chapter of their lives.

    These opportunities give students a competitive edge. They introduce them to workplace dynamics, reinforce classroom instruction, and open doors to mentorship and advancement. They make learning feel relevant and empowering.

    As explored in the broader discussion on why the world needs CTE, the long-term impact of CTE extends far beyond individual outcomes. It supports economic mobility, fills critical workforce gaps, and ensures that learners are equipped not only for their first job, but for the evolution of work across their lifetimes.

    CTE educators as champions of opportunity

    Behind every successful student story is an educator or counselor who believed in their potential and provided the right support at the right time. As CTE educators, we’re not just instructors; we are workforce architects, building pipelines from education to employment with skill and heart.

    We guide students through certifications, licenses, career clusters, and postsecondary options. We introduce students to nontraditional career opportunities that might otherwise go unnoticed, and we ensure each learner is on a path that fits their strengths and aspirations.

    To sustain this level of mentorship and innovation, educators need access to tools that align with both classroom needs and evolving industry trends. High-quality guides provide frameworks for instruction, career planning, and student engagement, allowing us to focus on what matters most: helping every student achieve their full potential.

    Local roots, national impact

    When we talk about long and fulfilling careers, we’re also talking about the bigger picture:  stronger local economies, thriving communities, and a workforce that’s built to last.

    CTE plays a vital role at every level. It prepares students for in-demand careers that support their families, power small businesses, and fill national workforce gaps. States that invest in high-quality CTE programs consistently see the return: lower dropout rates, higher postsecondary enrollment, and greater job placement success.

    But the impact goes beyond metrics. When one student earns a certification, that success ripples outward—it lifts families, grows businesses, and builds stronger communities.

    CTE isn’t just about preparing students for jobs. It’s about giving them purpose. And when we invest in that purpose, we invest in long-term progress.

    Empowering the next generation with the right tools

    Access matters. The best ideas and strategies won’t create impact unless they are available, affordable, and actionable for the educators who need them. That’s why it’s essential for schools to explore resources that can strengthen their existing programs and help them grow.

    A free trial offers schools a way to explore these solutions without risk—experiencing firsthand how career-centered education can fit into their unique context. For those seeking deeper insights, a live demo can walk teams through the full potential of a platform built to support student success from day one.

    When programs are equipped with the right tools, they can exceed minimum standards. They can transform the educational experience into a launchpad for lifelong achievement.

    CTE is more than a pathway. It is a movement driven by student passion, educator commitment, and a collective belief in the value of hard work and practical knowledge. Every certification earned, every skill mastered, and every student empowered brings us closer to a future built on long and fulfilling careers for everyone.

    For more news on career readiness, visit eSN’s Innovative Teaching hub.

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  • Does ‘less is more’ apply to tech companies?

    Does ‘less is more’ apply to tech companies?

    On 20 October 2025, an Amazon Web Services daylong outage left millions of people around the world unable to communicate electronically and hurt the operations of more than 1,000 companies. 

    Snapchat, Canva, Slack and Reddit were rendered useless while the businesses of gaming platforms Fortnight and Roblox, bankers Lloyds and Halifax and U.S. airlines Delta and United were disrupted. Media companies including the New York Times, the Wall Street Journal and Disney were also impacted.

    Amazon Web Service, or AWS, handles the backbone work of tools and computers allowing about 37% of the internet to work. It is the dominant player for cloud servers but the alternatives are equally large giants — Microsoft’s Azure and Google’s Cloud Platform. 

    The outage prompted European officials to call for plans for digital sovereignty and less reliance on U.S. behemoths. It was also a wakeup call to internet users worldwide of the fragility of the infrastructure and how much they rely on digital technology for everyday work and personal tasks from ordering coffee and communicating with colleagues to checking in airline flights and home security cameras to playing games, doing homework and shopping online.

    And it shined a light on how much the technology we rely on is controlled by oligopolies. Many people are familiar with the idea of a monopoly. That’s where one company or entity controls the market for a specific product or service and no competition is allowed. An oligopoly is a market structure when a small number of large firms dominate an industry, limiting competition. 

    Who controls the technology we use?

    What happened with the glitch at AWS showed the dangers of too much control in too few hands, but are there benefits we get from monopolies and oligopolies? How does competition — or the lack of it — affect what we consume? 

    A monopoly allows the company or entity to control the quality and prices of the product and services but the lack of competition might lead to less incentives to improve the product and prices might continually rise. 

    An example of a monopoly might be your local city or town provider of water, gas or electricity. The United States Postal Service is protected by U.S. law to be a protected monopoly to handle and deliver non-urgent letters.

    With oligopolies there is some competition, but consumers have a smaller choice and the major players rely on each other since one company’s actions could impact the others. An example of an oligopoly could be the airlines in your country where a few airlines largely control domestic and international flights. 

    Oligopolies generally emerge in industries with large start-up costs and strict legislation, allowing the oligopolies to keep prices high with virtually no new competition. 

    Benefits to concentrated ownership

    On the plus side, oligopolies tend to bring stability to their markets. An example of an oligopoly is OPEC, the Organization of Petroleum Exporting Countries, where 12 member countries each hold substantial market share in the supply of oil and control oil prices by raising or lowering output.

    When there is direct competition in business, companies selling similar products or services vie for more sales and share of the market, and profit by marketing their products on price, quality and promotions. This can lead to more innovation for product or services improvement and more company efficiencies to spur customer demand. But on the negative side, price wars may erupt and there could be consumer confusion over different brands. For example, Coca-Cola and Pepsi are direct competitors.

    University of California San Diego Economics Professor Marc Muendler noted that while the AWS outage negatively impacted people and businesses globally, it would be difficult for corporate clients to unwind from it, let alone find an immediate replacement because AWS offers a customized service specific to contracts.

    “Switching costs can be immense,” Muendler added.

    Muendler said for other oligopolies such as gas suppliers, airlines or even yogurt makers, prices might become somewhat elevated if the number of players is too small. An extreme might be duopolies, where two companies dominate sales of a product or service, such as when ski resorts are owned largely by two companies and can keep ski lift ticket prices high, he said.

    When big providers start having problems, that gives smaller players an opportunity.

    “It will always be hard to be the runner-up in a market with scale economies, where first movers get ahead fast,” he said. “[But] there’s a large segment of retail stores that don’t have specific contracts [with AWS]. That might be a market segment for a new competitor serving smaller customers, and then scale up.”

    Muendler said AWS clients should know they have a single supplier and be aware of the risks. 

    “I don’t see this market as easily reformable,” he said. “A big unanswered question is: How do we build resilience into our supply chains? There have been lots of disruptions to the global economy in the past 10–15 years. How do we incentivize companies that need specialized suppliers to also have redundancies,” or backup plans?

    Questions to consider:

    1. Identify a company, utility or other entity in your town or city. Is it a monopoly, oligopoly or does it compete directly with others? 

    2. What are the pluses or minuses for your family as consumers of its product or services?

    3. What are the key differences for an employee who works at a monopoly vs. oligopoly vs. direct competitors? 

     

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  • Why do people worry about inflation?

    Why do people worry about inflation?

    That’s why central banks have gone to extraordinary lengths in the past decade to banish the specter of deflation. They’ve succeeded. Indeed, stock markets have been rattled by evidence that inflation is stirring in the United States, which might prompt the Federal Reserve to raise interest rates more rapidly than previously thought.

    (On Wednesday, the U.S. government reported that consumer prices rose by 0.5 percent in January, more than expected. “Core” prices excluding volatile food and energy costs marked the biggest monthly gain in a year.)

    But the chances of inflation getting out of control are small.

    First, companies operate globally, so if manufacturing costs rise too high in the United States, they will shift production to cheaper locations overseas.

    Second, there is still slack in the U.S. jobs market because many people who gave up looking for work after the crisis could be lured back into employment, capping wages.

    Third, there is no reason to believe the Fed — or financial markets for that matter — would allow the money supply to spiral out of control.

    The United States is no Venezuela.

    Prices rise and fall all the time in response to factors such as changing consumer tastes and technological innovation. Medical care costs a lot more than in the past, computers a lot less. But a generalized rise in prices across the economy — which is the definition of inflation — is possible only if a country’s central bank prints too much money.

    That’s what’s happened in Venezuela, where the money supply has increased by 4,000 percent in the past two years. The result is hyperinflation, forecast by the International Monetary Fund to reach 13,000 percent this year. Goldilocks’s oatmeal is nearly doubling in price every month. Poverty is rife because wages lag price rises. The economy is on its knees.

    The United States is no Venezuela. Evidence of a pick-up in wages is good news in fact, considering that workers have been taking home less and less of the economic pie in recent years, while the suppliers of capital have benefited handsomely.

    It’s possible that the recently enacted package of U.S. tax cuts and spending increases will cause the economy to run a bit too hot, pushing up prices a bit. But of the many problems facing the U.S. economy, runaway inflation is not one of them.

    In 1981, then Fed Chairman Paul Volcker had to raise short-term U.S. interest rates to 20 percent to crush inflation. History will not need to repeat itself.

    Questions to consider:

    1. What “ripple effect” could a rise in consumer prices cause?

    2. How can inflation be good?

    3. When prices go up significantly, what might you or your family not buy?

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  • Can the world wean itself off petroleum?

    Can the world wean itself off petroleum?

    It has been just six years since the Paris Climate Agreement set a race against time to rein in global heating. But the Earth is sending ever-harsher signals of alarm.

    When the accord was signed, we were on course for global heating of 4°C from the start of the industrial era to the end of this century. Now the figure is around 2.7°C. So something has been achieved, but relative safety comes at no more than 1.5°C.

    There is still a gap between the policies put in place over the past six years and what is needed to achieve that lower figure, the International Energy Agency (IEA) said in its annual outlook, published in October.

    Yet we know what to do: substitute renewable energy for the power we get from fossil fuels by mid-century; decarbonize industry and adapt land-use to trap carbon in soil and plants; adapt our means of transport and our growing cities to use less energy; and protect marine areas to enhance carbon absorption in oceans.

    “Two parallel and contradictory processes are in play,” wrote environmentalist and author George Monbiot in a Guardian opinion piece on November 3. “At climate summits, governments produce feeble voluntary commitments to limit the production of greenhouse gases. At the same time, almost every state with significant fossil reserves … intends to extract as much as they can.”

    Everything depends, he concluded, on which process prevails.

    Making strides in renewable energy

    Similar tensions are in play at industrial and economic levels. On the plus side, there is now a surprisingly strong backstory in renewable wind and solar energy, particularly solar, and particularly in the United States, the heaviest polluter historically per person, and China, the biggest polluter in absolute quantities of its emissions.

    The energy crisis resulting from Russia’s invasion of Ukraine last February has prompted policies that will boost clean energy, the IEA added in its World Energy Outlook, which projects trends out to 2030.

    While the crisis has created a temporary upside for coal, in the long run, production of renewable energy will outpace the production of energy derived from fossil fuels, the report said.

    Another positive sign is the nascent hydrogen industry.

    Widely occurring and carbon-free, this gas could decarbonize long-distance travel and industries that are heavy emitters. Producing it without carbon emissions implies using intermittent renewable energy when it is over-abundant, a virtuous circle.

    However, none of this is yet at industrial scale — barring a few hydrogen-powered trains. Not all claims for hydrogen can be borne out, and it is not yet a viable financial concern.

    There is a significant plus on the political front with the election of Luiz Ignácio Lula da Silva as Brazil’s next president. He promises to end the record deforestation of the Amazon under his predecessor, Jair Bolsonaro, and is to take office in January.

    But there is no slowdown in fossil fuels.

    Yet investment in fossil fuels still dwarfs cash flowing into renewables, even though they offer economic advantages. The United States, for example, has ploughed over $9 trillion into oil and gas projects in Africa since it signed the Paris Agreement, The Guardian found.

    Africa, a continent starved of cash for energy but with vast potential for solar power, is now under pressure — including from international oil companies operating in its national parks — to exploit its fossil fuel resources just to bring electric power to its people.

    The fossil fuel industry’s damage doesn’t end there. There has been drastic under-counting of carbon emissions, a new tracking tool backed by former U.S. Vice President Al Gore has found. Oil and gas companies have underestimated their emissions threefold, Gore said when launching the tool at the United Nations Climate Summit (COP 27) in Egypt this month.

    “For the oil and gas sector it is consistent with their public relations strategy and their lobbying strategy. All of their efforts are designed to buy themselves more time before they stop destroying the future of humanity,” The Guardian quoted Gore as saying.

    Investing in Africa

    Across the world, policies are in place to invest over $2 trillion in clean energy by 2030, half as much again as today, led by the United States and China, but also including the European Union, India, Indonesia and South Korea, according to the IEA.

    In the United States, solar was already becoming the star of the new energy scene, according to an annual report from Berkeley National Labs. The country added 1.25 terrawatts of solar capacity in 2021. That’s more than the installed solar capacity in the entire world, which reached 1 terrawatt in early 2022.

    That was before the Biden Administration enacted the Inflation Reduction Act, which brings extra impetus for the sector. The United States plans to add 2-1/2 times its existing solar and wind capacity every year between now and 2030 and grow its fleet of electric vehicles seven-fold, the IEA said.

    At the same time, Africa is desperate for energy investment.

    To provide access to electricity for its population, the continent would need $25 billion per year, the IEA said in its annual Africa Energy Outlook, published in June. “This is around 1% of global energy investment today, and similar to the cost of building just one large liquefied natural gas (LNG) terminal,” it said.

    The continent has 60% of the world’s best solar resources but only 1% of installed solar photovoltaic capacity. This is already the cheapest source of power in many parts of Africa and would outcompete all other energy sources across the continent by 2030, the IEA said.

    The energy watchdog projects that solar, wind, hydropower and geothermal energy would provide over 80% of new power generation capacity in Africa by 2030. No new coal-fired power plants would be built once those now under construction are completed. Half the cost of adding new solar installations out to 2025 could be covered by investments that would otherwise have gone into discontinued coal plants.

    Yet this assessment leaves out the plans for increased oil and natural gas developments on the continent.

    Pressure from energy companies

    A report just published by Rainforest UK and Earth Insight 2022 found that the area of land allocated across Africa for such developments is set to quadruple under existing plans. That report focuses on the Congo Basin, but in East Africa, French oil major TotalEnergies is pushing ahead with a large-scale oil project and trans-continental pipeline in Uganda.

    A first cargo of liquefied natural gas has just left Mozambique after multiple delays caused by an insurgency in the region of the gas field, in a venture involving several oil companies.

    These oil and gas projects would lock the continent into fossil fuels for decades to come and blow a hole in the bid to keep global heating to no more than 1.5°C.

    These energy projects have wide support among African leaders, who contrast the immediacy of such investments and their benefits for their countries with the reluctance of Western nations to put up the finance agreed over a decade ago for energy transitions and preservation of biodiversity.

    African environmentalists question the wisdom of this carbon bomb. But it is hard to dismiss the idea that broken promises by the countries that have caused the climate crisis has driven Africa into the arms of the fossil fuel industry.

    TotalEnergies’ CEO Patrick Pouyanné argues that the world cannot quit fossil fuels before it has alternative sources of energy.

    “The mistake being made now is to think that the solution for the climate is to abandon fossil fuels,” he said in an interview with French TV station LCI on November 17. “The solution is first to build the new decarbonized energies that we need.”

    “If you do both at the same time, what happens?,” Pouyanné said. “Exactly what you reproach us for — prices rise because of the rarity of supply, because the demand for oil is not falling.”

    The monopoly power of fossil fuel firms

    These energy companies have long fought the switch from fossil fuels to renewables.

    Half a century ago, Total concealed a report it had commissioned that clearly explained how burning fossil fuels would cause global heating and the consequences we are seeing today.

    Other oil and gas companies, notably Exxon, acted similarly and responded to their findings by funding climate-denying think tanks and political lobbyists.

    More recently, as the evidence mounted, they turned their attention to lobbying for exemptions, even though the scientific consensus demands that to achieve the 1.5°C limit on warming, there can be no new oil, gas or coal exploration or extraction.

    A record number of fossil fuel lobbyists attended this month’s climate summit in Egypt (see the graphic here).

    Fossil fuels no longer make economic sense.

    The sector is a good example of reality flouting economic theory, which teaches that if a new technology reaches a point where it outcompetes an existing one, the new technology will replace the older one.

    This should be happening with solar versus coal, oil and gas — and indeed is predicted to happen by 2050. Meanwhile, harmful emissions continue to rise.

    Energy markets and the fossil fuel firms themselves do not obey basic economics for the simple reason that they are monopolies with the power to skew conditions in their favor.

    The oil producers’ monopoly, in the form of OPEC, has controlled production to keep prices higher for decades. In the 1990s, the big Western oil companies went through a frenzy of mega-mergers that created today’s top five — Shell, ExxonMobil, BP, Chevron, and ConocoPhillips — whose sheer size gives them disproportionate bargaining and lobbying power.

    Now activists are trying to gain support for a Fossil Fuel Non-Proliferation Treaty as a way of reining in the root cause of the climate emergency. The initiative was put before the United Nations in September and the COP 27 climate summit in November.

    “Will you be on the right side of history? Will you end this moral and economic madness?” Ugandan climate activist Vanessa Nakate asked global leaders at the summit.

    On that, the jury is still out.

    Landmark deal opens way for loss and damage fund

    It has taken 27 climate summits, but the COP 27 in Egypt finally managed to pull out an agreement to set up a specific fund to aid poor countries hit by damage caused by climate disasters. The deal was approved on November 20 after a marathon negotiating session.

    The proposal had been fought tooth and nail by the rich industrialized countries whose emissions have fostered global heating, stirring resentment among poorer countries who have suffered the most extreme consequences and have the least ability to mitigate the damage. 

    Details will be hammered out over the coming year, and there is as yet no money in the fund. It was nevertheless a major step forward.

    However, the final agreement failed to call for phasing out all fossil fuels and for warming emissions to peak by 2025, both heavily opposed by oil-producing countries, raising fears that the goal of limiting warming to 1.5°C by mid-century will not be achievable.

    Questions to consider:

    1. Where is a major boom in solar energy taking place?
    2. What is Africa’s energy dilemma?
    3. Why do you think fossil fuel majors have so much influence?

     

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  • Testing Times & Interesting Discussions

    Testing Times & Interesting Discussions

    Last week, The Royal Bank of Canada (RBC) put out a discussion paper called Testing Times: Fending Off A Crisis in Post-Secondary Education, which in part is the outcome of a set of cross-country discussions held this summer by RBC, HESA, and the Business Higher Education Roundtable. (BHER). The paper, I think, sums up the current situation pretty well: the system is not at a starvation point but is heading in that direction pretty quickly and that needs to be rectified. On the other hand, there are some ways that institutions could be moving more quickly to respond to changing social and economic circumstances. What’s great about this paper is that it balances those two ideas pretty effectively.

    I urge everyone to read it themselves because I think it sums up a lot of issues nicely – many of which we at HESA will be taking up at our Re: University conference in January (stay tuned! the nearly full conference line-up will be out in a couple of weeks, and it’s pretty exciting). But I want to draw everyone’s attention to section 4 of the report, in particular which I think is the sleeper issue of the year, and that is the regulation of post-secondary institutions. One of the things we heard a lot on the road was how universities were being hamstrung – not just by governments but by professional regulatory bodies – in terms of developing innovative programming. This is a subject I’ll return to in the next week or two, but I am really glad that this issue might be starting to get some real traction.

    The timing of this release wasn’t accidental: it came just a few days before BHER had one of its annual high-level shindigs, and RBC’s CEO Dave MacKay is also BHER’s Board Chair, so the two go hand-in-hand to some extent. I was at the summit on Monday – a Chatham House rules session at RBC headquarters – which attracted a good number of university and college presidents, as well as CEOs – entitled Strategic Summit on Talent, Technology and a New Economic Order. The discussions took up the challenge in the RBC paper to look at where the country is going and where the post-secondary education sector can contribute to making a new and stronger Canada.

    And boy, was it interesting.

    I mean, partly it was some of the outright protectionist stuff being advocated by the corporate sector in the room. I haven’t heard stuff like that since I was a child. Basically, the sentiment in the room is that the World Trade Organization (WTO) is dead, the Americans aren’t playing by those rules anymore, so why should we? Security of supply > low-cost supply. Personally, I think that likely means that this “new economic order” is going to mean much more expensive wholesale prices, but hey, if that’s what we have to adapt to, that’s what we have to adapt to.

    But, more pertinent to this blog were the ways the session dealt with the issue of what in higher education needs to change to meet the moment. And, for me, what was interesting was that once you get a group of business folks in a room and ask what higher education can do to help get the country on track, they actually don’t have much to say. They will talk a LOT about what government can do to help get the country on track. The stories they can tell about how much more ponderous and anti-innovation Canadian public procurement policies are compared to almost any other jurisdiction on earth would be entertaining if the implications were not so horrific. They will talk a LOT about how Canadian C-suites are risk-averse, almost as risk-averse as government, and how disappointing that is.

    But when it comes to higher education? They don’t actually have all that much to say. And that’s both good and bad.

    Now before I delve into this, let me say that it’s always a bit tricky to generalize what a sector believes based on a small group of CEOs who get drafted into a room like this one. I mean, to some degree these CEOs are there because they are interested in post-secondary education, so they aren’t necessarily very representative of the sector. But here’s what I learned:

    • CEOs are a bit ruffled by current underfunding of higher education. Not necessarily to the point where they would put any of their own political capital on the line, but they are sympathetic to institutions.
    • When they think about how higher education affects their business, CEOs seem to think primarily about human capital (i.e. graduates). They talk a lot less about research, which is mostly what universities want to talk about, so there is a bit of a mismatch there.
    • When they think about human capital, what they are usually thinking about is “can my business have access to skills at a price I want to pay?” Because the invitees are usually heads of successful fast-growing companies, the answer is usually no. Also, most say what they want are “skills” – something they, not unreasonably, equate with experience, which sets up another set of potential misunderstandings with universities because degrees ≠ experience (but it does mean everyone can agree on more work-integrated learning).
    • As a result – and this is important here – it’s best if CEOs think about post-secondary education in terms of firm growth, not in terms of economy-wide innovation.

    Now, maybe that’s all right and proper – after all, isn’t it government’s business to look after the economy-wide stuff? Well, maybe, but here’s where it gets interesting. You can drive innovation either by encouraging the manufacture and circulation of ideas (i.e. research) or by diffusing skills through the economy (i.e. education/training). But our federal government seems to think that innovation only happens via the introduction of new products/technology (i.e., the product of research), and that to the extent there is an issue with post-secondary education, it is that university-based research doesn’t translate into new products fast enough – i.e. the issue is research commercialization. The idea that technological adoption might be the product of governments and firms not having enough people to use new technologies properly (e.g. artificial intelligence)? Not on anyone’s radar screen.

    And that really is a problem. One I am not sure is easily fixed because I am not sure everyone realizes the degree to which they are talking past each other. But that said, the event was a promising one. It was good to be in a space where so many people cared about Canada, about innovation, and about post-secondary education. And the event itself – very well pulled-off by RBC and BHER – made people want to keep discussing higher education and the economy. Both business and higher education need to have events like this one, regularly, and not just nationally but locally as well. The two sides don’t know each other especially well, and yet their being more in sync is one of the things that could make the country work a lot better than it does. Let’s keep talking.

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  • Why all the fuss about interest rates?

    Why all the fuss about interest rates?

    For the first time in more than a decade, interest rates across the world are rising from what some say were their lowest levels in 5,000 years.

    You heard that right. The idea of lending money — and charging a fee for doing so — is as old as civilisation. Central banks, the institutions now responsible for guiding a country’s rates, are much more recent. Sweden’s Riksbank, in 1668, was the first, closely followed by the Bank of England in 1694.

    Don’t worry. This spin through history is meant only to show that interest rates have a long, if not always respected, past.

    In our drama-filled present, the world is watching — with interest — where they will go from here.

    So why do interest rates matter? And why now, in particular?

    Why do interest rates matter?

    To vastly oversimplify the argument: lending rates matter because prices matter. And interest rates are the most tried-and-tested tool for keeping prices under control.

    Even those who prefer getting their financial advice from TikTok and YouTube, rather than consulting traditional financial institutions, would be hard-pressed to miss the fact that prices for essentials such as food, fuel and cooking oil are rising faster across the industrialized world than they have in decades.

    This can be particularly hard for those starting their working lives. Nearly half the Generation Zs and Millennials in a 46-country Deloitte poll said they live paycheque to paycheque. Of the thousands surveyed, nearly one-third (29% of Gen Zs and 36% of Millennials) said inflation was their most pressing worry right now.

    The global rise in prices is the result of a perfect storm of factors: among others, a food shortage caused by Russia’s blockade of Ukraine’s ports, soaring energy costs and the effects of droughts, heatwaves and other climate-linked extreme weather on agriculture; a resurgence in consumer buying deferred during COVID-19 lockdowns; and a surge in demand for workers.

    And while wages are also rising after years of near dormancy, they are not increasing fast enough to keep pace with prices. So even the most carefully managed household budget is facing new strains.

    That’s where interest rates come in.

    Slowing inflation without stalling economies

    Central banks hope that by making it more expensive to borrow, they can slow the pace of inflation. That they have been able to keep rates at or near zero for so long is because the world was in an extraordinary period of extended price stability.

    There is little that even the cleverest economic steward can do to fix the external factors affecting inflation — Ukraine, droughts, labour shortages — but they can try to put the brakes on internal drivers such as consumer demand.

    So that’s why rates are increasing in most major economies faster than they have since the latter part of the last century.

    The U.S. Federal Reserve, arguably the world’s most powerful central bank, has raised rates three times this year and is expected to increase them again this week. Peers such as the European Central Bank and the Bank of England are following suit, although some are taking a cautious approach because they want to slow their economies without stalling them completely.

    The question is: How far will rates rise and how will that affect a global economy that has been buffeted in the past few years by a pandemic, geopolitical turmoil and a supply chain crisis?

    Consider hypothetical futures.

    Economists say a few possible paths lie before us.

    The best-case scenario is what they call a “soft landing”: interest-rate rises could put a quick end to the price spiral without causing a halt or, worse, a reversal in economic growth. When prices stop rising, rates do too.

    There are potential pluses for the young in this brightest of hypothetical futures. It could allow wages to catch up with costs, boosting buying power. And if there is a halt or reversal in property prices, they could at last have a chance to buy without having to face cripplingly high mortgage rates.

    The second-best scenario is a brief recession that ends quickly and brings with it tamer prices and stable or lower lending rates. See above for benefits.

    “I am not confident in the soft-landing scenario,” said Greg McBride, Chief Financial Analyst at Bankrate.com. “A recession is very likely the price to be paid for getting inflation under control. And painful as recessions are — even mild recessions are not fun for anybody — that is medicine we are better off taking now in an effort to get back to price stability.”

    If interest rates rise too slowly or not enough, this opens the door to the worst of all possible worlds — a phenomenon known as stagflation.

    Stagflation is an ugly thing. Prices soar, economic growth slows and it becomes harder and harder to make ends meet. The fact is that economic growth will slow as rates rise, even in the best of our possible outcomes. But as long as prices follow, we will escape the economic purgatory that big economies faced in the 1970s.

    Now is the time for smart financial management.

    Whatever future lies ahead, McBride said, the best way to ride it out is to practice sound financial management. That applies whether you are a student, just joining the job market or starting your own business.

    “The fundamentals are critically important,” he said. “That is: invest in yourself and your future earning power; watch your expenses; live beneath your means; save and invest the difference; and don’t rely on debt to support your lifestyle if your income cannot.”

    This last is particularly important in a time of rising rates.

    “There are points in life where you need debt,” he said. “You may need to borrow to get through school. You’re probably going to have to borrow to buy a house.”

    But you must never lose sight of “the end game” of paying that debt off, particularly if, as with most credit cards, it carries high or variable interest rates. And don’t borrow for non-essentials.

    McBride said: “Leaning against debt, like a crutch to support a lifestyle your income cannot, doesn’t lead anywhere good.”

    QUESTIONS TO CONSIDER

    1. What is stagflation and why is it the worst-case scenario?

    2. How can policymakers tame inflation?

    3. How have the prices for food, fuel and other goods changed where you live?

     

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  • Decoder Replay: Gold is valuable. But you can’t drink it.

    Decoder Replay: Gold is valuable. But you can’t drink it.

    We’re marking World Water Week, a gathering in Sweden intended to solve water-related challenges such as droughts, floods and food security. Let’s invest in it.

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  • How worried are we about the future? Let’s quantify it.

    How worried are we about the future? Let’s quantify it.

    Fear. Uncertainty. Those are human emotions that many people are feeling these days. It turns out you can quantify fear and uncertainty by looking at the stock market.

    Stocks are shares of a business that people can buy on a public market, betting that the business will grow and profit and the shares will be more valuable over time. But share prices also rise and fall based on how people feel about the economic future. 

    So individual stocks, as well as whole sectors of an industry or the overall market in general, can rise or fall on economic or company reports, politics, geopolitical events, unexpected news and whether investors are optimistic or pessimistic about the future. 

    When these kinds of changes or reports cause stocks to suddenly and frequently rise and fall, we say the market is “volatile.” 

    Throughout 2025, the U.S. stock market, which is the biggest in the world, has been pretty volatile. One way to measure it is through the Standard and Poor’s 500 Index, which is a snapshot of 500 major company stocks. 

    Politics and plunging markets

    From mid-February to early April, the S&P 500 index plummeted 19% as U.S. President Donald Trump launched a trade war that raised fears of inflation, a recession, job losses and a swelling national debt.  

    The U.S. market has largely recovered those losses in response to Trump pausing his tariff wars and lowering tariffs from scary levels. As of 30 June 2025, the stock market was dancing in record high territory. 

    Robert Whaley, a finance professor at Vanderbilt University and director of its Financial Markets Research Center, developed a way to measure a stock market’s volatility by keeping track of stock options — contracts that gives investors the right, but not an obligation, to buy or sell a stock at a predetermined price at a set future date. 

    It is popularly known as the “fear index” and goes by the symbol VIX. 

    The fear index is a measure of how much volatility is expected in the next month. Historically, its long-term average has been 17. During April, it was 40-50. In comparison, the index was at 85 in the COVID-19 market crash of March 2020 and at 89.5 during the global financial crisis of 2008-2009. 

    Buying and selling on fear

    What happens during market volatility? High volatility usually implies higher risk because price movements are less predictable. While some short-term stock traders can make money during market volatility, longer-term buy-and-hold investors might get jittery. 

    Mutual fund cash holdings were at a 15-year high in March. That means that professional money managers held onto cash and stayed on the sidelines. What do global investors crave? Stability and predictability. 

    “The VIX as of now (intraday June 30) is at 17 so things are calmer which is surprising given what is happening in Ukraine and Iran,” Whaley said. “It seems the markets have become quite comfortable about it.” 

    He underscored that the fear index is intended to help institutional investors — such as those who manage pension funds or retirement accounts that many people invest in — predict market volatility over the next 30 days. For people who might not be actively involved in the stock market, all of this still matters. 

    “It reflects how institutions are feeling about the marketplace,” Whaley said. “An analogy would be if you own a house on the beach and learn a hurricane is coming. How much might insurance cost if you could actually buy it that late?” 

    Reading the market

    Whaley said that young people should develop an intuitive feel of stock market volatility, since it is an expression of nervousness. 

    “In essence, it’s a fear gauge,” he said. “If people are getting nervous buying put options [that gives investors a right to buy] that drives up put prices. If VIX was at 30-40% institutions are scared to death. Right now at 17%, there’s no concern in the short run.”

    Whaley said the index is normally around 15-20%, but a reading below 15% would reflect that investors are complacent. 

    As for the limitations of the fear index, Whaley said some people read too much into it and some institutions might overpay for VIX options and futures to try to insure their investments against losses. 

    While the fear index was born on a real-time basis in 1993, Whaley calculated that it would have reached an intraday high of 172 and closed at 156 on October 19, 1987, the date of the global stock market crash known as Black Monday. Whaley said other market earthquakes that caused big percentage drops included the 2008 financial crisis and Trump’s tariffs. 

    Whaley said viewed in a historical context, the fear index is like any other index — like the Dow Jones Industrial Average — that has a market value. “Indices are useful in terms of their history,” he said. “A barometer of fear. If VIX is higher, figure out what is going on.” 

    Questions to consider:

    1. What type of news might cause fear in a stock market?

    2. If there is a lot of uncertainty in a stock market, what do many professional investors do? 

    3. Can you think of another way to measure how fearful people are about the future?

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  • Designed in California but made … all over the world

    Designed in California but made … all over the world

    Most of us spend a good part of our lives glued to our iPhone or other similar devices. It seems as if we cannot survive without being connected to cyberspace.

    It turns out that Apple, a U.S.-based company which makes the iPhone and depends on its sale, cannot survive without being connected to China, which is a key partner in the production of most every iPhone that people use. And that puts the iPhone at the center of the great power struggle underway between the United States and China.

    One of the earliest insights into iPhone production came along in 2010 thanks to research by economists Yuqing Xing and Neal Detert. They lifted the veil off the mystery behind the iPhone label “Designed by Apple in California, Assembled in China”.

    The iPhone model 3G was indeed designed in Cupertino, California, by Apple. But the vast majority of components were sourced from Japan, South Korea, Germany and elsewhere in the United States.  All iPhone components were then shipped for assembly to Foxconn, a Taiwanese contract manufacturer based in Shenzhen, China.

    Less than 4% of the iPhone manufacturing value came from the assembly in China.

    Manufacturing capability

    The iPhone was only first launched in 2007, and iPhones were not sold in China until late 2009. At the time, there was no production of Chinese smartphones. Since those days, the iPhone and other smartphones have become ubiquitous in modern life. Apple now sells 230 million iPhones annually, each one of which has one thousand components and about 90% of them are produced in China.

    Financial Times journalist Patrick McGee, in his recent book “Apple in China“, explained how Apple began assembling iPhones in China for its cheap labour costs but that came with a different cost: China’s labour was not of high quality.

    In contrast to the general impression, China does not have great vocational training systems. So Apple became China’s vocational school.

    Although Apple did not own any factories, it assumed close control over the factories of Foxconn and other companies to ensure its traditional perfectionist quality control. This included sending over planeloads of high-level engineers from the United States to train Chinese workers and investing in machinery for production lines.

    Further, while components from foreign companies are still used in Apple products, these companies are now increasingly based in China. Over time Chinese companies have played a growing role in the production of the iPhone and other devices. Workers from all these companies have also been trained by Apple engineers.

    Over the past decade, Apple invested some $55 billion a year for staff training and machinery. Since 2008, 28 million Chinese have received training from Apple — a figure larger than the workforce of California.

    Human capital

    But there is more to China’s human capital than training offered by Apple. A key element has been China’s investment in human capital more generally, notably education and health.

    Chinese students participating in the OECD’s Programme for International Student Assessment — from Beijing, Shanghai, Jiangsu and Zhejiang, collectively home to nearly 200 million people — have outperformed the majority of students from other education systems, including the United States.

    China has also made extraordinary progress in lifting its life expectancy, which is now the same as that of the United States at 78 years, even though the gross domestic product per capita in the United States  — a key measure of the economic health of a country — at $83,000, is more than six times that of China. For the first time, China has overtaken the United States in healthy life expectancy at birth,  according to World Health Organization data.

    Apple CEO Tim Cook has said that there is a popular conception that companies come to China because of low labour cost. Cook argues that the truth is China stopped being a low labor cost country many years ago.

    He insists that Apple is motivated by the quantity and type of skill that China offers. For example, while it requires really advanced tooling engineers, Cook is not sure the United States could fill a room with such engineers, while in China you could fill multiple football fields. Such vocational expertise is now very, very deep in China.

    India and the United States

    U.S. President Donald Trump insists that Apple must “reshore” its production to the United States. This is not realistic. The United States does not have the capacity to produce Apple’s products at scale and at competitive cost. It most certainly does not have the same competitive cost, well-trained engineering workforce as China, which has some three million people working in Apple’s supply chain.

    Under Trump 1.0, Apple made a commitment to build “three big, beautiful factories” (in Trump’s words) in the United States. But that was just hot air, as none were built. Now, Trump has threatened to impose a 25% tariff on iPhones if they are not made in the United States.

    In response, Apple said that phones sold there would be labelled “Made in India” (although this is unacceptable for Trump), and has pledged to invest $500 billion in the United States. What this pledge means in reality is still unclear. Apple may ultimately need to build a token factory or two, with limited production functions, to pander to Trump.

    Many commentators are suggesting India as an alternative production base for Apple. And some assembly functions are indeed being shifted to India. But these are just the very final assembly phase of production, which are sufficient to justify attaching an “Assembled in India” label.

    All the pre-assembly activities remain in China. At this stage, India is not a viable option for replacing China because of deficiencies in human capital, infrastructure and logistics systems.

    A close partnership

    In many ways, modern China and Apple have made each other.

    Technology and knowledge transfer have underpinned China’s growing contribution to the iPhone and other Apple products — as well as the Chinese smartphone brands like Huawei, Xiaomi and Oppo, which now dominate world markets. Moreover, Chinese engineers are capable of building all sorts of electronic products, some of which could be used in military conflicts.

    In sum, Apple has made a major contribution to the rise of China as a technological powerhouse. China has been a key factor in the rise of Apple as one of the world’s most successful companies. Apple has a Chinese system for producing the iPhone and other products that works like a song.

    No other country has the human capital, and production and logistics systems for producing Apple products at scale and at a competitive cost. Thus, Apple is in a way now trapped in China, which makes it vulnerable to coercion from China’s authoritarian government.

    It should try to make greater efforts to de-risk itself from China, although that is not easy and might provoke the ire of the Chinese authorities.

    Apple now finds itself caught between a rock and a hard place — meaning President Xi and President Trump.

     

    Questions to consider:

    1. Where is the iPhone made?

    2. What would make a device that is made outside the United States more expensive to buy in the United States?

    3. Should people be able to buy anything from anywhere without any extra costs from governments? Why?

     

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  • Last Week in Parliament: Three Takeaways

    Last Week in Parliament: Three Takeaways

    It was a busy week in Parliament last week.  The King came to Ottawa to deliver a Speech From the Throne.  His speech – almost exclusively a re-hash of Liberal promises from the April election – was deeply depressing for anyone who thinks the words “knowledge economy” have any meaning.   

    The main feature of the Speech from the Throne was that it spelled out, in excruciating detail, how the Liberals intend to double down on re-creating the Canadian economy of the 1960s.  Oh sure, the King uttered a line in there early on about how his government is committed to “building a new economy.”  But read the document: that sentiment was in no way followed up by anything resembling a commitment to any kind of new economy.  Instead, here are the major economic elements to which the government is committed:

    • Speeding up permits for major construction projects like roads and pipelines and whatnot: because natural resources have to get to the coasts somehow!
    • Building a lot of houses
    • Spending more on defense
    • Breaking down internal trade barriers
    • Er…
    • That’s it.

    Whatever you think of the merits of the various proposals here, this is not a new economy.  It is barely even a warmed-over version of the old economy.  At best, it is about finding new markets for old products, not developing any new products.  I am unsure if it is more that the Liberals have no sweet clue about how to create a new economy, or that they are uninterested in doing so.  But it’s one of those two.

    Now some might argue otherwise because look!  Evan Solomon!  Minister of Artificial Intelligence and Digital Innovation!  How New Economy is that?  All I can say is: please try not to be that person.  Solomon is a Minster without a department with a mandate which is completely undefined.  Is it an internally-facing ministry meant to diffuse digital innovation and AI throughout government?  Or an externally-facing ministry meant to diffuse these things across the economy?  Two weeks after Solomon was named Minister, we still have no clue.   And the Liberal Manifesto and the cabinet’s One Big Mandate Letter give conflicting impressions about the extent to which the Government sees its AI/digital strategy is about skill expansion/diffusion vs. handing money to techbros (the mandate letter reads like the former, the manifesto the latter). One would be forgiven for suspecting the Carney government is making things up as it goes along.

    Anyways, the point here is still: despite Carney’s globe-trotting central banker/Goldman Sachs reputation, this government seems to be staying as far away from a Davos/future industry agenda as humanly possible.  The Liberal “new economy” is all pretty much all construction and primary industries.  This is not a world which requires a lot of higher education.

    Scared yet?  We’re just getting started.  Back on Thursday our new Prime Minister was seen to tweet:

    In other words, this government seems determined to continue in the tradition of both the former government – and the opposition parties for that matter – in framing the country’s ills as problems of costs to be solved by tax cuts and giveaways rather than problems of growth and the institutional investments required to generate it.  This way lies Peronism and perpetual stagnation. 

    And this is from our allegedly “serious” party.

    So, takeaway number one.  Universities need to throw away EVERYTHING in their playbooks for Government Relations.  Selling yourself as “the future” to a government that is desperately trying to reverse our economy into the 1960s is pointless.  This government and this Prime Minster Do. Not. Care.   Until they do, arguing for universities as “crucial” investments is a waste of time.  The real fight is over the shape of the Canadian economy.

    On to a more abstract point about budgeting.  One of the reasons we aren’t getting a budget before fall, despite the government just having been elected with a pretty detailed budget-ready manifesto and the Department of Finance being perfectly capable of putting together a set of Main Estimates for the House of Commons (as it showed on Thursday), is that Carney is trying to introduce a new set of rules with respect to public budgeting.  He spent part of this week insisting that he would balance the “operating budget” within three years, which sparked a lot of incredulity given that i) the economy is about to be in the tank and ii) the Liberals have ring-fenced most of the federal budget by saying they won’t touch transfers to provinces or transfers to institutions.  In theory, that means very significant cuts to program spending.  Like, say, research budgets.

    Except: there is currently no such thing as an “operating budget”.  What Carney wants to do is to exempt from the budget balance requirement anything that can be seen as “capital investment”, which means basically that the main game in Ottawa over the next few years is going to be how to get your favourite piece of spending classed as “capital” instead of “operating”.  And that’s a live issue because the definition the Liberals touted in the election campaign, to wit…

    …anything that builds an asset, held directly on the government’s own balance sheet, a company’s or another order of government’s.  This will include direct investments the government makes in machinery, equipment, land and buildings, as well as new incentives that support the formation of private capital (e.g. patents, plan and technology) or which meaningful raise private sector productivity.

    …is so loose you could drive a truck through it.  Will CFI spending count as capital?  Probably, but not necessarily since universities (in most provinces anyway) are neither a government nor a company.  Will tri-council spending?  Probably not, but that’s not going to stop folks claiming it supports capital formation/raises productivity, so who knows?  So, takeaway number two: get used to arguing distinctions between capital and operating because this might be the only place the sector gets traction in the next little while.

    A final point of importance is something that is not exactly new but has been given fresh salience by being in the Throne Speech, and that is the government’s commitment to limit temporary immigration – that is Temporary Foreign Workers (TFWs) plus international students – to below five percent of the population by 2027.  Or, to put it another way: every extra TFW is one international student less.  What the government has done here is set up a zero-sum game between institutions of higher education and people like the manager of the Kincardine Tim Horton’s whose business model simply cannot work if they are not allowed to employ foreign nationals at below-market rates. 

    This, my friends, is the fight post-secondary education needs to pick and needs to win.  It won’t be easy, because the captains of Canadian industry are largely clueless about competing on anything other than price, meaning low-wage labour is pretty dear to their hearts and they will fight hard for TFWs.  But it is the dilemma this country faces in a nutshell: should we use our scarce temporary immigration spots to make things cheaper in the short-term?  Or should we use them to develop a skilled workforce and build our scientific and technological talent base for the long term? 

    So, I know this won’t come easy to institutions but: screw Bay Street.  Light the torches.  Find the pitchforks.  Pick up anything you have handy and smash the windows of your local Tim Horton’s.  Fight for international students and against TFWs.  This is an existential contest: it decides whether Canada is going to be a country that gets wealthier based on investments in skills, education and science, or a country that bathes in mediocrity because we go mental if the price of a cruller goes up twenty-five cents. 

    And if the sector ducks this fight because direct confrontation with business is icky and makes some Board members uncomfortable?  Well, then the sector deserves everything it gets.  That’s the third, and most important takeaway of the last week.

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