Ignoring educational foundations can impede future business growth
Business leaders all around the world agree that one of the major challenges to growth and competitiveness is the lack of enough people with the correct skills and competencies.
On the supply side, education service providers (and governments) often don’t appreciate they are part of a market system in which young people, labour force participants and businesses are customers.
Are businesses failing their customers? This may be true, given the magnitude of youth unemployment, large numbers of young people leaving school (from families that see education as a poor investment of time and money) and fears of redundancy among those already working. The choice for business is to wait for governments and educational institutions to fix the situation, or to proactively invest in solutions.
Jack Ma, founder of Alibaba Group, China’s e-commerce giant said: “If we do not change the way we teach, 30 years from now, we’re going to be in trouble.”
He said we need to teach children soft skills like independent thinking, values and team work. He added: “The knowledge-based approached of 200 years ago will fail our kids,” who will never be able to compete with machines.” He also said children need to learn about sports, art and music.
Jack Ma’s ideas have been applauded, but in some regions the problem is a basic lack of any education. Annual spending per school-aged child in Sub-Saharan Africa is roughly one-third of the minimum needed.
As a result, most children don’t come anywhere close to finishing secondary school.
They are forced to drop out early, because there are no places in public schools and tuition for private school is far too high for most families.
Girls are more likely to leave school early despite parents knowing that all of their children need a quality education. Without the skills that a secondary education provides, the children who leave school early face a life of poverty.
Across Africa, political, religious, and civil-society leaders are doing what they can. Ghana has recently announced free upper-secondary education for all, setting the pace for the continent. This is to be welcomed of course, as long as the quality of education is sufficient to equip young people with what they need to be successful.
As African countries struggle to fund their ambitious commitments, new partners, including private companies and high-net-worth individuals, should step forward to help them.
One approach for the future involves partnerships between companies and educational service providers to structure programs with curricula, experiential learning and qualified teaching that ensures that participants emerge with minimum requirements to be employable in that company/industry. This can offer a good return on investment while allowing companies to integrate with the communities where they operate.
Examples range from clothing companies that “adopted” a high school in El Salvador to Hollywood companies supporting partnerships that facilitate the growth of animation in Macedonia.
Investing in the development of these partnerships generates a sustainable supply of qualified people, not just for an individual company, but for the overall business ecosystem.
In Peru, a ceramics company set up a program for certified installers that could be recommended to end-customers by the retailers of their products.
Another approach involves investment in educational services themselves as a for-profit business, or at least as a cost centre that generates business returns. This can include opportunities such as e-learning and certifications.
Caterpillar in Mongolia did not want to be in the education business but set up a school for operators of heavy equipment in Mongolia, otherwise it wouldn’t be able to sell its equipment. Could it then find a provider to deliver the training and certification?
To secure the future of an adequately trained, healthy workforce, companies need to invest in human capital, not just once they are employed, but to ensure that they are employable in the context of a rapid advance in technology and minimum requirements. Those who don’t, are risking the growth of their business and possibly the industry they operate in.
Education service providers that treat their students as customers are key to bridging the skills gap. Their success in placing and advancing graduates as employees and entrepreneurs should be the key measure of success.
This article was written by Eduardo Tugendhat, Palladium's Director of Thought Leadership, for Real Leaders.