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  • [ — Divider — ]
  • Preface
  • Chapter 1.1 Reaching Beyond the New Normal: Findings from the Global Competitiveness Index 2015–2016
    • Introduction
    • Methodology
    • The Global Competitiveness Index 2015–2016
    • Results overview
    • Country highlights
    • Conclusions
    • References
    • Box 1: The Inclusive Growth and Development Report
    • Box 2: The Case for Trade and Competitiveness
    • Box 3: The most problematic factors for doing business: Impacts of the global crisis
    • Box 4: China’s new normal
    • Appendix: Methodology and Computation of the Global Competitiveness Index 2015–2016
  • Chapter 1.2 Drivers of Long-Run Prosperity: Laying the Foundations for an Updated Global Competitiveness Index
    • Introduction
    • What competitiveness is and why it matters
    • Institutions
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    • Macroeconomic environment
    • Health
    • Education
    • Product and service market efficiency
    • Labor market efficiency
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    • Technological adoption
    • Market size
    • Ideas ecosystem
    • Ideas implementation
    • Conclusions
    • Bibliography
    • Appendix A: Measurement of Key Concepts and Preliminary Index Structure
    • Appendix B: Acknowledgments
  • Chapter 1.3 The Executive Opinion Survey: The Voice of the Business Community
    • Introduction
    • The Survey in numbers
    • Survey structure, administration, and methodology
    • Data treatment and score computation
    • Conclusions
    • Box 1: Example of a typical Survey question
    • Box 2: Insights from the Executive Opinion Survey 2015
    • Box 3: Score calculation
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Global Competitiveness Report 2015 Home
  • Report Home
  • Report Highlights
  • Competitiveness Rankings
  • Interactive Heatmap
  • Competitiveness Dataset (XLS)
  • Blogs and Opinions
  • Top 10 Infographics
  • Videos
  • Press Releases
  • [ — Divider — ]
  • Preface
  • Chapter 1.1 Reaching Beyond the New Normal: Findings from the Global Competitiveness Index 2015–2016
    • Introduction
    • Methodology
    • The Global Competitiveness Index 2015–2016
    • Results overview
    • Country highlights
    • Conclusions
    • References
    • Box 1: The Inclusive Growth and Development Report
    • Box 2: The Case for Trade and Competitiveness
    • Box 3: The most problematic factors for doing business: Impacts of the global crisis
    • Box 4: China’s new normal
    • Appendix: Methodology and Computation of the Global Competitiveness Index 2015–2016
  • Chapter 1.2 Drivers of Long-Run Prosperity: Laying the Foundations for an Updated Global Competitiveness Index
    • Introduction
    • What competitiveness is and why it matters
    • Institutions
    • Infrastructure and connectivity
    • Macroeconomic environment
    • Health
    • Education
    • Product and service market efficiency
    • Labor market efficiency
    • Financial market efficiency
    • Technological adoption
    • Market size
    • Ideas ecosystem
    • Ideas implementation
    • Conclusions
    • Bibliography
    • Appendix A: Measurement of Key Concepts and Preliminary Index Structure
    • Appendix B: Acknowledgments
  • Chapter 1.3 The Executive Opinion Survey: The Voice of the Business Community
    • Introduction
    • The Survey in numbers
    • Survey structure, administration, and methodology
    • Data treatment and score computation
    • Conclusions
    • Box 1: Example of a typical Survey question
    • Box 2: Insights from the Executive Opinion Survey 2015
    • Box 3: Score calculation
  • Competitiveness Practices
  • FAQs
  • Partner Institutes
  • Downloads
  • Competitiveness Library
  • About the Authors
  • Contact Us

Education

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Education can be defined as the stock of skills, competencies, and other productivity-enhancing characteristics embedded in labor, or in other words the efficiency units of labor embedded in raw labor hours.50 In general, education—as a critical component of a country’s human capital—increases the efficiency of each individual worker and helps economies to move up the value chain beyond manual tasks or simple production processes. Since Schultz (1961), human capital has been considered the “most distinctive feature of the economic system,”51 and further work has proven the impact of education on productivity growth empirically.52

Three channels have been suggested through which education affects a country’s productivity. First, it increases the collective ability of the workforce to carry out existing tasks more quickly. Second, secondary and tertiary education especially facilitate the transfer of knowledge about new information, products, and technologies created by others.53 Finally, by increasing creativity it boosts a country’s own capacity to create new knowledge, products, and technologies—as discussed further in the last two categories below.

Education concerns not only the quantity of schooling—the percentage of the population that completed primary, secondary, or tertiary education—but also, critically, its quality. Hanushek and Kimko (2000), for example, find that it is not merely years of schooling but the quality of schooling (which may be reflected in international examinations) that has a significant relationship with economic growth.54

Although traditional areas of education such as literacy and numeracy remain important drivers of productivity, the GCI needs to be updated to place greater emphasis on the delivery of education that meets 21st century demands such as knowledge diffusion and innovation. Current debates on the relationship between the quality of education and productivity center on softer skills such as the extent to which educational institutions equip their students with the ability to think critically and creatively, and how extensively and effectively these institutions foster and support students’ curiosity. This has two important implications for delivering education. First, research suggests that teaching creativity and curiosity involves complementing the focus on numeracy and literacy with concepts of intelligence in areas such as the arts, music, interpersonal relations, control of the body (as needed, for example, for dancing and theater), and intrapersonal knowledge.55 Second, it requires a reassessment of our current methods of teaching: departing from the assumption that all children learn equally, it suggests the need for a tailor-made learning experience based on an individual analysis of the way a child absorbs knowledge, thereby allowing the teacher to properly assess a child’s progress.56

50
50 Acemoglu 2009, Chapter 3.
51
51 Schultz 1961, p. 1. Schultz explores the role of human capital to explain three findings that were seemingly perplexing at the time of writing: (1) there was a fall in share of the capital-income ratio despite it hitherto being believed that the share of capital should increase with economic growth; (2) income in the United States had increased at a higher rate than the combined amount of land, number of man-hours worked, and stock of reproducible capital used to produce the income; and (3) there was an unexplained large increase in real earnings per worker. Schultz concentrates on (1) health facilities and services, broadly conceived to include all expenditures that affect the life expectancy, strength, and stamina, vigor, and vitality of people; (2) on–the-job-training; (3) formally organized education; (4) study programs for adults that are not organized by firms; and (5) migration of individuals and families to adjust to changing job opportunities.
52
52 For example, according to Barro 2001, an additional year of secondary schooling for boys raises the economic growth rate by 0.44 percent per year. Barro and Lee 2010 find that, holding all else constant, output for the world economy would increase by around 2 percent for every additional year of schooling. Standards models have also been developed by Becker 1965, Mincer 1981, and Ben-Porath 1976. See Acemoglu 2009 for a detailed discussion.
53
53 This role of human capital in adapting to change and implementing new technologies was first suggested by Schultz 1964 and also pioneered by Nelson and Phelps 1966. On the link with secondary and tertiary education in particular, see Barro and Lee 2010.
54
54 Hanushek and Kimko 2000 find that scores on international examinations (indicators of the quality of schooling capital) matter more than years of attainment for subsequent economic growth. Labor force quality has a consistent, stable, and strong relationship with economic growth.
55
55 Gardner and Hatch 1989; Robinson 2001, 2009.
56
56 Lazear 1992.
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