“Train people well enough so they can leave. Treat them well enough so they wouldn’t want to.” – Sir Richard Branson
The transition from traditional to knowledge economy where new trends and technologies are being introduced faster than one can even get used to, requires every human being to become life-long learners.
This has made the ‘formal education’ or at least the ‘qualification gathering’ the highest priority of one’s life. Education in general and higher education in particular have become investments people make with the expectation of better employment and higher wages.
But most of the educators and educational institutes claim that the purpose of education is to ‘equip people with the knowledge they need to make free and independent decisions’ in living the life they have planned for themselves.
The fact that there is an economic basis underpinning those individual choices makes them very much dependent on various factors such as political climate, the economy and the social and cultural norms of their living environment. Since higher education cannot be seen as detached from the lower levels, most of these factors and concepts mentioned here would have some, if not all of their tentacles wrapped in the whole system of formal education.
As waiting until a child begins school at the age of five or six seems like an unnecessary risk, institutions of early childhood education, have emerged to take up the slack between birth and school to reduce the likelihood of educational failure. Some countries have even started to subsidise pre-school education since they are reluctant to rely upon the parents to invest appropriately in their children’s education.
Education and labor market
Even though educational policy dynamics can vary across countries and their political landscape, one would find a great deal of commonalities, especially, within the context of globalization. The debate on the purpose of higher education has become the most important component of the discussions among the policy makers who live in the framework of market-driven economies. Social scientists have been highlighting the increase of social inequalities despite the efforts to increase the participation in higher education.
Labour market driven higher education policies have increased the competition among the recipients and the degrees have become assets that can be converted to a labour market value. Education is no longer considered as a necessity for human development other than as an instrument for economic progress. Educational institutions have become almost like automated degree producing factories in their efforts to make the process as customer friendly as possible in order to attract better clientele.
These same institutes use phrases such as ‘student-centered learning’ and ‘opportunities for individualised programs’ that are contradictory to the assembly-line like process of issuing degrees. The world has accepted this concept of using children as raw material for these education factories in the process of manufacturing adults the market needs to sustain the economic progress. The advancement of the ICT has made it much easier even to reach thousands of customers from all over the world at any given time.
Human capital
One of the early attempts to estimate the monetary value of a human being was by Sir William Petty in the late sixteen hundred. He considered labour as the ‘father of wealth’ therefore must be included in any estimate of national wealth of a country.
He extended this idea of ‘Human Capital’ to showcase the power of England, to explain the economic effects of human migration and the monetary loss to a nation due to deaths, especially during the wars.
A more scientific explanation of human capital was introduced in1800s where cost of production and future earning potentials of a human being considered into estimating the capital value. This process of capitalising an individual’s earnings minus his consumption or maintenance created a way to calculate the compensation for loss of life.
Economists in the past have tried all types of different methods to include human beings or their acquired abilities and skills as a component of capital and recognised the importance of investment in human beings as a means of increasing their productivity.
This idea of including human beings in the concept of capital addresses the cost of rearing and educating human beings as a real cost, the product of their labour as an addition to the national wealth and an expenditure on a human being that increases that product as an addition to the national wealth.
The re-discovery of human capital in the mid-twentieth century doesn’t seem to be a discovery at all. It is just an invention of a technology through which the productive capacity of a human being and of a population can be measured. Investment in human capital then, is analogous to an investment in physical stock, the means of production.
But the investment in human capital stock is different from other forms of capital investment in fixed stock since one cannot separate a person from his knowledge, skills and health the way it is possible to move financial and physical assets while the owner stays at the same place. An efficient measure of human capital should be able to measure the value of all layers of socialisation, which occur over the span of an individual’s life including childhood with his family and/or with any other environment.
This will highlight one’s education as the main contributing factor to one’s capital and that will directly connect the public investments in schools as the most important investment in human capital.
Importance of education
Public education is largely been provided by governments as a means of fulfilling a need for labour to have a minimum level of schooling. Then there is another segment of the society that can afford private education through which they expect to gather a greater capital than others.
Therefore, an education system that would allow an individual the freedom to choose the best path for him to improve his intellectual capacity while increasing his contribution to the capital is an important component of the development of a nation.
Even with the existing systems of education, the real constraint facing children around the world may be the inability to borrow against future income to buy a parental environment that will allow them to fulfill their potential, which is sometimes called the accident of birth.
Sir Ken Robinson, who was an international advisor on education, once said: “Human resources are like natural resources, they are often buried deep.
You have to go looking for them, they are not just lying around on the surface. You have to create the circumstances where they show themselves.”
(The writer has served in higher education sector as an academic over twenty years in the USA and fourteen years in Sri Lanka and he can be contacted at [email protected]