Building the knowledge economy

by Justine Doody
Freelance Journalist and Editor, SGI News

Across the world, countries and citizens are taking steps to build and participate in the growing knowledge economy. As low skilled jobs disappear, replaced with smart systems or outsourced to less developed economies, governments are realising that the best way to ensure economic growth and higher employment is to invest in human capital. This means creating education opportunities for as many people as possible.

The OECD has found that throughout the global economic downturn, education level has been a predictor of job security. Between 2008 and 2010, unemployment in OECD countries rose from 8.8 per cent to 12.5 per cent for people with no upper secondary education, and from 4.9 per cent to 7.8 per cent for people with an upper secondary education. For those with tertiary education, unemployment increased from 3.3 per cent to only 4.7 per cent. Even in a time of economic crisis, OECD countries still needed highly skilled employees.

The Sustainable Governance Indicators (SGI) 2011 study of the Bertelsmann Foundation measured education in OECD countries. The top performing countries were Finland, Canada and New Zealand, while among the lowest were Mexico, Turkey and Slovakia. In Finland, SGI found, between 60 and 70 per cent of each annual cohort enter third level education. Canada has the highest proportion in the OECD of population aged 20 to 64 that has completed post-secondary education. Reforms in New Zealand have led to a sharp increase in tertiary education participation, among majority and minority groups. OECD figures from 2012 also show that New Zealand invests the highest percentage of public expenditure of all OECD countries in tertiary education.

In Mexico, according to SGI, things are improving, but slowly. University education is increasing, but it is still open to only a few; OECD data shows that just 17 per cent of 25 to 64 year olds have achieved a tertiary education. Turkey has serious problems in terms of access to and quality of education, and only 29 per cent of 25 to 64 year olds have a secondary education. Slovakia sees regional differences in access to third level, and has the lowest enrolment rate in third level in the OECD.

Education, health, social inclusion: it’s all connected

Not surprisingly, the top countries in education scored highly in most of the indicators measured by SGI, while the bottom countries scored low on many indicators. One of the indicators with a close correlation to education performance was social inclusion. Finland, Canada and New Zealand ranked highly on this indicator, while Mexico, Turkey and Slovakia were among the countries with the worst levels of poverty, inequality and social exclusion.

Completing more years of education has been linked to economic success, better health outcomes and greater social inclusion. Within the European Union, research shows that 24 per cent of families with a low-educated head are in poverty, compared to 13 per cent of families whose head has a secondary education, and 6 per cent of families whose head has completed third level education.

However, across the OECD, young people from families with limited education are far more likely to leave the education system before attaining a third level qualification. So, low rates of social inclusion and poor education participation feed off each other. Failing to educate people equitably and effectively exacerbates inequality, while failing to improve social inclusion means less advantaged people are less likely to obtain higher levels of education.

Early childhood education is important

Higher education is key to achieving higher income and economic security. But to ensure access to higher education, it is essential to intervene early in the student’s academic career. Children from disadvantaged social groups tend to perform better in schools that include students from different socioeconomic backgrounds. But too often, different social groups are separated, or are not provided with the same opportunities.

In Slovakia, for instance, SGI data shows that the Roma population has particularly low rates of participation in formal education. In Mexico, a private system that exists alongside the public system makes sure that those with higher incomes have access to better quality education. And in Turkey, a lack of social security benefits for parents means that girls from low-income families tend to leave education around the fifth grade. Even in the better performing countries, disparities persist. New Zealand’s Maori and Pacific Islander populations still face difficulties in accessing education, as do Canada’s Aboriginal groups.

Best in class: Finland

Finland has successfully implemented one route to ensuring students stay in education, helping to keep up its rates of students entering third level. It offers special interventions for students who are having difficulties: about 40 per cent of students in Finnish secondary education are given some form of extra attention. Each school has a “special teacher”, who can identify struggling students and provide educational support. As a result, just 1 per cent of Finnish 15-year-olds do not have basic reading skills, as compared to an OECD average of 7 per cent.

Finland is helped in its efforts to ensure equitable education by its homogenous society and healthy economy. Even so, countries with more diverse socioeconomic compositions could still benefit from following its example of early and intensive intervention. As countries work to create competitive advantage by building skilled workforces, making early investments in students could be an excellent investment in countries’ future potential for economic success.
Photo credit: Body of Knowledge sculpture, Frankfurt /Shutterstock

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