How Does Education Affect Economic Growth?
Education Affect Economic Growth
If you pay attention, you will quickly notice that the income of most college graduates is much higher than that of people without a diploma. This makes us wonder… how the system works. How does our country education affect economic growth?
Then, acknowledging and fully understanding the way education affect economic growth is essential to better understand why some economies, companies, or individuals have the upper hand, while many others have lost motivation.
Generally speaking, markets and industries that put forward higher requirements usually compensate workers to a higher degree. Why? Then, when the labor force is limited and the demand for educated professional graduates’ increases, most countries, organizations or professionals do not need to think for a long time. You either pay or you are left behind.
Why is education important to any country?
Since the beginning, the level of competition between countries has been different. At that time, the world was full of wars involving physical strength. Today, many countries are already fighting the Cold War, which means the nature of the battlefield is economic.
In short, the country with the most economic resources will have competitive advantage in other countries. The interests of each country have certainly improved in specific industries. For example, Spain imports many seafood and olive oil. The United States is one of the industrial, economic, and military powers.
In this era, every technological breakthrough will bring money. When you have money, you are interested. Therefore, as you might guess, growth cannot simply arise from anything. Education and training is the key to promoting economic growth, not only for the country, but also for private enterprises and individuals, such as you and me.
Now let us take a closer look at how Education Affect Economic Growth, employers and employees.
It Affects Employers
For employers, their business must achieve results. Therefore, in this era, most employers are looking for experienced, skilled, and knowledgeable employees who can successfully meet the company’s expectations and standards.
In many cases, companies must train and specialize new employees because some of these companies have unique strategies, algorithms or knowledge. Now, before an employer decides to provide educational assistance through training, he must consider the following aspects:
To what extent will the training program affect the performance and productivity of the participants?
Does the efficiency/productivity increase cover the cost of the training program?
If employees are required to pay for training, they will leave another competitor after “get what they need”?
After the training course is over, will employees get higher salary expectations?
It Affects Employees
The income potential of employees is mainly affected by his knowledge, skills, experience, authentication and other factors. In short, employees who pursue higher education goals usually get higher bonuses and remuneration.
If an employee fully understands the job, industry and market, he will not only be welcomed by employers, but also appreciated by other competitors. Therefore, for employees, a higher level of education and training can bring higher benefits to the workplace. This includes more respect, possibly higher authority in the team, maybe a leadership position, or maybe just a better salary or compensation plan.
Many employees are now working hard to develop and improve their talents, seeking advanced and unique ways to help them improve performance and productivity. Whenever he decides whether to participate in advanced research or provide training, employees should consider several aspects:
How much productivity will this course/university/training rate of return increase?
Will the new knowledge/skills/resources compensate for the cost of education?
Will there be problems in the labor market after the end of the education curriculum, and will it be extremely competitive? Is there an important “growth space”?
It Affects The Economy
Every country seems to be very interested in the future of its offspring. A country with professional knowledge and ability to engage in emerging industries such as technology will reap huge economic benefits.
Therefore, every country is interested in launching an education movement in which development and prosperity should be promoted. Now everyone has the right to start basic education (in most countries), and competition will soon enter.
Education does not only refer to those college graduates who want to find a job, or workers who want to improve their careers by recruiting colleges. In fact, economists are the rankings of education as follows:
Elementary School-Elementary School
Secondary schools-this refers to “secondary” schools, high schools and preparatory schools
College-vocational school, community college, university
When the number of educated people in a country increases, the economic level of the country will immediately improve due to the ability of the workers.
Nevertheless, not every country can provide extensive and comprehensive training for free like many companies. Even so, most countries and states provide funding for the basic education stage represented by elementary and middle schools.
Whenever a country invests in education, it basically invests in human capital. When you invest in tools and resources, you will invest in order to receive feedback later. It is exactly the same as the educational system.
Every country, company or individual who realizes this aspect will certainly flourish for a long time. Why? Because we are moving forward, if you do not continuously improve your personal and professional knowledge, skills and way of thinking, there is no way to stay at the top of the ladder!
Education and Economic Growth
Conclusion
Essentially, the more familiar and skilled an employee is, the better results he will usually produce. The higher employee’s result, the higher company’s result. Follow me.
When a company’s performance grows, it will automatically improve its country’s economy for various reasons. This is all causation.
Therefore, I believe that every country must truly understand the importance of a knowledge-based and skilled labor force, because this is the basis for potentially thriving long-term economic growth.
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