One answer comes from Eric Hanushek, a well-known education economist and school reform advocate at Stanford's conservative Hoover Institution (you might have caught him in the documentary "Waiting for Superman"). He and his collaborators argue that test scores really do predict economic growth, since smarter countries are more innovative and productive countries, and can attract more international investment. If the United States were to raise our test scores to Canada's levels, they say, it could add $77 trillion to the economy over the next 80 years.
Those claims are based on a 2012 study (now a book) comparing test scores and growth across 50 countries from 1960 through 2009. During that time, Hanushek & Co. argue, America's economy over-performed its test results. But those days might be drawing to close:
The U.S. economy grew two-thirds of a percent faster per year for this period than would be predicted by its students' mediocre test scores. This performance reflects a number of historic advantages. The U.S. economy is built on open markets, secure property rights and generally favorable tax rates; a higher-education system at the top of the world; and favorable immigration policies that permitted highly skilled people to enter. But these relative advantages are declining as other countries emulate our institutions and practices.
In other words, now that China's a market economy, we should expect all those brilliant kids in Shanghai to eat our lunch.
But will they really? As Rebecca Strauss of the Council on Foreign Relations wrote earlier this year, it's not entirely clear math and science tests capture the qualities that make for a strong work force:
In China, there is growing awareness of troubled “high-testing, low ability” adults, who could not thrive professionally as adults but did extraordinarily well on the grueling high school examination test known as the Gaokao that determines college entry and, many believe, a student’s life prospects. James Heckman of the University of Chicago has done ground-breaking research showing that some of the most valuable skills learned in high school are less academic and more akin to personality traits, such as “stick-to-it-iveness,” optimism, and grit in the face of setbacks.
It's even less obvious that a math assessment can distill all the qualities that make for an innovative country. Forget Silicon Valley and the United States for a moment. Instead, consider Israel, another middling test-taker that's become a major startup and software hub that receives more venture capital investment as a percentage of its GDP than any other nation in the world.
Or think about smartphones. Apple, of course, triumphed by marrying technology with Steve Jobs' aesthetic sensibility. Nokia, which accounted for a quarter of Finnish growth from 1998 to 2007, sold fashionable phones designed by a Californian, Frank Nuovo (a guy who, by the way, spent his teens drumming in a Jazz Fusion band, not cramming for tests).