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Investment in education pays dividends for the wider economy

Mid-sized business report

Investment in education pays dividends for the wider economy

Stuart McDowall 03 Jun 2019

The education sector plays a vital role in our economic growth and productivity, as well as our social cohesion and quality of life.

Investments made in this sector have a flow-on effect to all other sectors, which can be seen through measures such as workforce participation, labour productivity, the availability of necessary vocational and professional skills, and advances in research and innovation; all critical elements of our global attractiveness for investment.

As a nation, we have among the highest levels of education in the world – in the top 10 OECD countries for the number of 25 – 34 year-olds with tertiary education in 2017. But are they the right skills for the future workforce? Do we have our foundations right?

According to the OECD we spend less on early childhood education as a proportion of GDP, but then the duration of early childhood education in Australia is shorter. Yet, research tells us that the first 1,000 days of a child’s life are pivotal in their development – including how they perform socially and academically. Fostering the right environment for learning, collaboration and wellbeing for all ages sets the nation up for future success.

And depending on how you measure the academic performance of our school students, our progress in this area has not been as fast as many other OECD countries.

Download our mid-sized business report to read the full Education insight.

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Here is a short introduction to our three recommendations to help boost the Education sector:

Additional investment in childcare and early years education

Universal access to early childhood education is currently available for four year olds, but there is emerging interest in extending this to three year olds. This would be a welcome initiative which – should the newly returned Liberal Government choose to pursue – would assist to bring our expenditure on early childhood education more in line with many of our counterparts in developed countries.

Enable a more responsive VET sector

An independent review of the VET sector, delivered in March 2019 included 71 recommendations across funding, policy and regulation – the key takeout being that businesses were losing confidence in VET and that class-room based learning alone does not adequately prepare vocational students to transition into the workforce.

Continued support for STEAM

Skills demanded by the labour market are changing. Technological change and global competition demand the mastery of new competencies and the acquisition of new skills for many. This can be seen in the increasing prevalence of robotics, automation and online service delivery in many sectors.

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