“Education should lead to development, but development can take place if the knowledge gained is complemented by economic growth.” ― Lailah Gifty Akita.
Knowledge and skills act as supporting agents for economic progress in respective fields. The increase in population across the world is leading to an excess labor supply.
Labor supply and demand are significant determinants in economic and business development. The degradation in labor wages is the result of increased labor supply. If demand doesn’t satisfy the supply chain, it can lead to blunders in wage expectations.
Work environment and requirements require a labor crowd to be prepared for the best outcomes. An unskilled labor force isn’t a winning picture for any country’s economy.
Education is one key aspect that emphasizes value addition in each individual. Highly qualified individuals are proven assets for building a high-end brand that contributes a huge portion to the economy of a country.
High-salary industries are complex to crack because they require a particular skill set. Education holds the power to transition unskilled labor into qualified professionals.
How does education empower a generation that contributes to the economic growth of the country? Let’s dive in and understand each aspect of the relationship between education and the economy.
Understand education and economy theory.
Trade across borders is another word for international trade and globalization. These concepts are introduced for the betterment of business in terms of exposure to the world, which indirectly contributes to the worldwide economy. Economically robust and comparative countries hold and empower developing countries through positive influence. All countries specialize in some niche; globalization helps exchange and regulate trade, facilitating lifestyle.
Keeping advantages and disadvantages in eye, education, and knowledge to trade across the globe facilitates economic boost. Training and education are two major sectors a company can rely on for better benefits of globalization. However, education contributes in every way.
Training significance for workers and employers
Typically, training is a rehearsal for an ice break, which consists of individual responsibilities to excel in a particular job. A growing economy requires qualified or trained workplaces for bottom- to top-level operations, which encourages a competitive advantage over diverse companies across the globe. The government of a growing economy facilitates schemes including tax relaxation, workplace benefits, and job placement for healthy competition along with the maximum outcomes.
One real fact is a company can’t be an all-rounder and excel in one or a group of niches. Companies follow this strategy, making a tough grip on one sector and ruling the global market. It’s like trademarking the product and transforming t into a holy grail.
Training techniques may vary from developing to developed countries. Trainers, workplace environment, real-time connection, tech-savvy, geography, and positive externalities are some key determinants of training. Having a skilled labor workforce from which to hire individuals is an external factor that’s advantageous to all companies. Geography is like cherry on top for highly-trained individuals to excel and take business plus economy to new heights. For example, Silicon Valley is a great example for tech companies in the USA; Bangalore is Silicon Valley for India.
For professionals
Filtering the best skills and knowledge leads to increased salary and value output. Increased wage upgrades lifestyle and overall confidence and consistency along with collective economic upliftment. Precise training gives detailed job requirements, which make the job more focus-worthy for professionals. Higher wages encourage learning high-paying skills and indirectly boost productivity.
Workers should keep the following points in mind before starting the training:
- How much extra knowledge are they gaining while and after training?
- Does the training award some rewards?
- What’s the period for a wage increase after training?
- Analyze the field’s labor market demand, supply chain, and professional demand.
For employers
Maximum productivity with less effort is an ideal expectation for employers from workers. The employer wants an unskilled labor transformation into a professional operations manager quickly. The ultimate motive behind expectation is to contribute faster and more to the economy. Well, employers must consider the points below to work in unilateral favor.
- Will training levels increase the productivity level of workers?
- Clarifies wage amount to avoid labor exploitation.
- Will a newly trained laborer be appropriate for high-operation tasks?
- Will the workers stay after training or look out for competitor companies for better wage opportunities?
- Will workers leverage all training skills while making optimum use of resources?
Employers may encounter staff members who are opposed to taking training or want to be saturated. This may occur in union-dominated industries where hiring highly qualified employees or firing less-skilled ones may become challenging because of robust job security. In some cases, unions agree to become more productive with high-paying skills training.
Many companies follow strict guidelines for training current and upcoming employees to eliminate the fear of trained professionals leaving for better wages.
The direct relation between education and the economy
Science and technology are part of the new education system, which is meant to upgrade knowledge and leverage the labor force for economic development. Ideal generation, product marketing to execution, all aspects are possible due to education. A step towards a skilled workforce and high salary pay has enhanced the economic landscape, and global domination of niche development has improvised.
Education creates skilled professionals, which increases growth and raises a country’s economic productivity. Like purchasing better technology, education spending raises the proportion of the educated labor force, facilitating economic development.
The educated labor force is an asset in knowledge-based economies, as they generate valuable goods and services. If studying takes up time that could be spent working, the investment pays off in the long run with increased earnings.
Bottom Line
The knowledge and skills of the labor community significantly influence business and economic development. Economies that benefit from an extensive supply of skilled labor—a result of both formal & theoretical education and real-time training—are frequently decked up to leverage this by growing their high-tech manufacturing and other value-added businesses and economy.
Nations must use employment-encouraging schemes to guarantee that all inhabitants have access to quality education and training that can collectively improve the number of employees, businesses, and the national economy.
