Yes, Prime Minister. It's About Learning!


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Heads of State wave during the 2010 G-20 in TorontoLast week in Jomtien, Thailand, Ministers of Education and senior education officials from 34 countries, joined by supporters from dozens of international agencies and civil society organizations, reaffirmed their commitment to achieving Education for All by 2015.  This high level group was also commemorating the original launch of Education for All twenty years earlier, also in Jomtien.   But education leaders committing themselves to education is preaching to the choir. 

In my last post, 'Rockstars for Reading,' I argued that some of the most successful economies in the world are those that have invested most wisely in the education of their people.  So what are the education investment secrets of the most successful countries?  To put it another way, imagine if a finance minister from one of the most successful economies – such as Korea, Singapore, Brazil, or Mauritius -- were to assume the same post in another country.  What might he or she tell the head of state to encourage more and smarter investment in education?

These finance ministers will point out that high-performing countries that have invested in their education systems have done so with the goal of achieving "learning for all." They pursue the objective of improving learning—and not just access, enrollment, or even completion— because it is how successfully a country's students learn skills and knowledge that drive productivity, prosperity, and economic growth.  And such high-performing countries pursue the “for all" part of "learning for all" because, like flying a plane with poor quality fuel, the economy cannot attain lift if too many citizens suffer from the low productivity of the uneducated.

Cost-benefit considerations require that education investments generate learning for all. Schooling without learning is just a big sunk cost -- a drain on the budget that unrealistically raises the expectations among those students who have spent years at school learning too little of any real value.  Finance ministers don't need to remind their prime ministers or presidents how expensive the education sector is, or what a large share of the civil service their teaching force constitutes.  But they can remind them that with the right education policies, their countries may be able to sustain or even accelerate growth out of this substantial investment.

Enlightened finance ministers will also explain to their prime ministers or presidents that at the macro level, broad-based learning contributes to economic success.  High-performing economies are often those where students perform well on in national or international learning assessments and where the proportion of students who perform below standard is both very low and declining thanks to targeted education strategies, policies, and programs. 

We see evidence for this in the 2007 World Bank report on Education Quality and Economic Growth, by Eric Hanushek and Ludger Woessmann.  We also see it in the strong economic performance of countries like China, Brazil, Finland, Singapore, and Korea. This makes sense:  strong foundations of literacy, numeracy, and problem solving make workforces flexible enough to take advantage of technological change and new opportunities. By focusing attention on skills acquisition, learning for all allows countries to link their education investment policies much more directly to the macro and labor-market concerns of their finance ministries and other top policymakers.

These finance ministers will also help their prime ministers or presidents understand that at the micro level, educated workers with useful skills (and the flexibility provided by a good education) are much more likely to find and hold jobs, and their higher productivity typically earns them higher wages.  Labor-market woes cannot be blamed solely on the failings of education systems:  clearly, much of the unemployment and dissatisfaction with wages comes from economic mismanagement, rent-seeking, and corruption that reduce returns to even the best quality education.  But a lack of focus on useful cognitive and marketable skills also contributes to the problems associated with disaffected, educated youth.  Learning for all can help address those problems.

Finally, a "learning for all" focus inevitably leads Heads of State to better understand the roles of secondary and tertiary education (in addition to primary schooling).  It is much easier for prime ministers and presidents to get interested in improving learning for all, because the returns -- in terms of higher skills of school-leavers -- can start improving labor-force outcomes within just a few years. Supporters of education everywhere should rally behind education ministers who are passionately behind the noble goal of Education for All.  At the same time, they would be wise to listen to the quieter voice of finance ministers from successful economies who remind their heads of state that learning is the key to national prosperity.  

Image credit: Wikimedia Commons



Robin Horn

Education Adviser

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Ramesh Kumar Nanjundaiya
June 14, 2011

Submitted by Ramesh Kumar Nanjundaiya on Sun, 2011-06-12 12:20.
I have been reading Ryan Hahn's observation on the potential and benefits of education in a fast developing country as India and I tend to partially agree when he says that even the middle class in developing countries tends not to invest in businesses but in things like better health and education. Perhaps the greatest return on investment is really in these types of human capital investments. In this regard I must add that India will make a best case study case if one were to observe the "business dynamics" in the education sector. One does not fail to notice, particularly in the last 7 years the rapid expansion in the education space more so at the Bachelor's degree level in various fields of Engineering, pure sciences and Master's level in management/marketing/hr and entrepreneurship. The number of new Institutes/Universities/coaching centers which have come up is just mind boggling. It is education and the English language ability that is taking India to the next higher stage of economic development and increasing its profile globally. In this regard, it is worthwhile to state that providing Education has infact become a big business in India and it will not be very far away when Universities/ Educational institutions will be run and managed like corporates. In this regard I have quoted below a public report by PwC on Emerging Opportunities for Private and Foreign Participants in Higher education., which make a very interesting reading.

Report by PwC - "Emerging Opportunities for Private and Foreign Participants in Higher education"

According to the report ‘Emerging Opportunities for Private and Foreign Participants in Higher Education’ released in August 2010 by PricewaterhouseCoopers (PwC), the education sector in India is one of the thrust areas for investments as the entire education system is undergoing a process of overhaul. The education sector, with an estimated size of US$ 25 billion, entails three goals of expansion, inclusion and quality, to be accepted as one of the best on international canvas. According to the report, the government has set a target to achieve 21 per cent of gross enrolment ratio (GER) by the end of the Twelfth five year plan (2012-2017).
Consulting firm Technopak is more bullish about the growth of the sector and estimates that private education sector itself would grow to US$ 70 billion by 2013 and US$ 115 billion by 2018. Technopak sees enrollments in K-12 growing to 351 million, requiring an additional 34 million seats by 2018. This equals US$ 80 billion at US$ 2400 a seat.

Sector Facts
FDI inflows in the education sector during the period April 2000 to February 2011 stood at US$ 397.55 million, according to the latest DIPP SIA Newsletter According to the 2011 census, the total literacy rate in India is 74.04 per cent. The female literacy rate is 65.46 per cent and male literacy rate is 82.14 per cent The higher education system in India comprises over 17000 colleges, 20 central universities, 217 State Universities, 106 Deemed to Universities and 13 institutes of National importance. These figures will soon inflate as there is a proposition to set up 30 more central universities, 8 new IITs, 7 IIMs and 5 new Indian Institutes of Science.

Investment Opportunities
Private equity investment in education has reached US$ 190 million in 2010 from US$ 22 million in 2005, an increase of more than eight times, according to Keki Mistry, Vice Chairman and Chief Executive Officer, HDFC. Investments in the Kindergarten to class XII segment is expected to grow to US$ 33 billion by next year from the current US$ 20 billion, said Mistry. Meanwhile, the pre-school segment is predicted to reach US$ 1 billion in the next two years from an estimated US$ 500 million currently, according to the Kaizen Education Report released by Kaizen Mgmt Advisors. India needs 1.2 million more teachers under the Right to Education Campaign, according to Mr. Kapil Sibal, Union Minister for Human Resource and Development. He also added that with 546 million people under 25 years of age, there is huge potential in India in the education sector that needs to be tapped. By 2020, to increase the percentage of students going for higher education from the present 12.4 per cent to 30 per cent in the country, India will need 800 more universities and another 35,000 colleges, according to Mr. Sibal. The country's fast-growing education sector holds a potential to attract a US$ 100 billion investment over the next five years driven by demand for skilled professionals and need for infrastructure development, according to experts, such as KPMG. As per a report released by research firm RNCOS, the annual student enrolments for higher education are expected to grow at a CAGR of nearly 8.7 per cent during 2010-11 to 2012-13 and will require huge investments for developing the infrastructure. The report states that sky rocketing economic growth will require huge number of engineers and management graduates which mandate infrastructural development to address the demand.
Finance Minister, Mr Pranab Mukherjee, has said that the proposed allocation for education under the Eleventh Five-Year Plan will be US$ 65.21 billion, taking the share of education in total planned expenditure from 7.7 per cent to 20 per cent. To accomplish massive expansion and up gradation of the education infrastructure of schools, universities and institutes imparting vocational training, government plans to mark up its expenditure on education from around 10 per cent to 19 per cent. A bill in the Parliament has also been introduced to open up the education sector for Foreign Universities, said Indian Ambassador to the US Meera Shankar. The Central Universities Act was promulgated in January 2009 for conversion of three state universities into central universities. It also brought new central universities in 12 states.

Best regards,