Main Reasons Why Investment in Education Is Important for Business

The Millennium Development Goals are clear: reaching the ideal of universal primary education and balancing out gender inequalities at all stages of education by 2015. These are not goals that someone just wrote. It’s what the entire humanity strives for. Thanks to the activities of various organizations on a global level, we’re seeing great progress in the educational sectors everywhere. But we’re still not done.

Education is important for personal development, but it also plays a crucial role in the economy. When someone wonders: “why invest in education?” the answer is clear: “Because I want to get on the career path, I want for myself.” But when we ask the same question to government officials and businesses, the answer is more complex.

The Importance of Education for the Economy and Business Community

The business sector does very little to support education. According to a report published by Unesco, the contributions of the private sector to education account for less than 0.1% of the profit of the two largest oil companies in the world. We’re comparing the investments to the profits of only two corporations here. It’s a devastating situation.

Figure 1. Source

Currently, the educational sectors from developing countries receive only $683 million per year from private contributors. All those millions sound like a lot, but that amount is only 5% of the full amount that’s received as educational aid. Governments cover 95% of the needs. Let’s see how other sectors compare to education: the health sector gets 53% of all grants by U.S. foundations. Education, on the other hand, gets only 8%. We’re not saying that health isn’t important. We’re only saying that foundations and businesses don’t understand one main thing: why is education important to the economy?

If better education contributes towards stronger economy, we’ll have more money for all types of grants. All other sectors will equally benefit from such policies.

Statistics Show Why Education Matters

  • In developed countries, 33% of the labor force has some level of advanced education. In developing countries, the ratio is 12%.
  • In developed countries, nearly 90% of the citizens went through some level of secondary education. In the developing world, only 63% of the citizens have that level of education.
  • In developing countries from the Middle East and sub-Saharan region, females do not have equal access to education as makes. In well-developed countries, the ratio of female and male students at all levels of education is almost equal.
  • Researchers found strong indicators that people from countries with low social inequality and higher average income invest more money in the education of their children. Students from these countries are also more likely to ask: “Can a professional writer do my assignment for me at https://au.edubirdie.com/do-my-assignment?” That’s because they face demanding standards, but they are ready to do whatever it takes to meet them.

How does education help the economy? To answer that question, seeing the statistics above should be enough. Developed countries invest more in education and managed to enhance its quality on all levels. But the relation works vice-versa, too. Great educational outcomes improve the scientific knowledge and problem-solving capacity within the society, so they contribute towards overall growth. 

Insufficient educational outcomes, on the other hand, affect the basic cognitive skills in the overall society. We’re talking about literacy, numeracy, and general problem-solving skills.

We’re living in the digital era, so digital capacity is part of the skills that businesses need, too. Technology changes education because it immerses students in the experience from a very young age. Any company will benefit from a new employee who’s on track with the latest technology trends. But businesses have to contribute towards such a job market.

How Can We Improve the Quality of Education?

Figure 2. Source

This is a complex challenge. The governmental and the business sector must join forces to spark essential changes in the quality of the education. There are two key leverage points:

  • Investment in early levels of education
  • Investment in career-driven education on levels of high school and higher

Early education is crucial for a person’s learning capacity. Through proper training, the human mind and motivation to learn can be influenced. Young learners can develop beneficial habits that lead to long-term effects in academic achievements.

Secondary and tertiary educational institutions must stimulate career growth through highly relevant instructions. For that purpose, they need to invest in new programs, laboratories, and research centers that support practical learning methods.

Can Businesses and Governments Invest More?

Of course they can. Governments are limited in the way they allocate resources. They have to support all sectors. But the business sector has a lot of capacity to improve the efficiency of all educational organizations. Through their investments, they will contribute towards a more qualified workforce. As a result, the entire economy will feel the effect.

It takes a great deal of commitment, finances, and time for us to see the real benefits of improved education. But through the comparison of developed and undeveloped countries, we know these effects are certain. There is no downside to investment in education. Sooner or later, the entire society will witness the growth.

BIO:

Michael Turner is a blogger and academic writer. His main interest is education. How does it work on a global level and how does it compare between countries? Through his posts, Michael sheds light on these issues.

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Author: Eddy

Eddy is the editorial columnist in Business Fundas, and oversees partner relationships. He posts articles of partners on various topics related to strategy, marketing, supply chain, technology management, social media, e-business, finance, economics and operations management. The articles posted are copyrighted under a Creative Commons unported license 4.0. To contact him, please direct your emails to editor.webposts@gmail.com.