Education has been described as “the best economic policy there is” – and with good reason. Knowledge-based economies – those with a greater reliance on knowledge, information and high skill levels; all accessible to business and the public sector – are invariably the advanced ones. These are economies which successfully evolved to meet altering market conditions and demands and are a manifestation of the survival of the fittest in the law of the economic jungle.
An educated workforce, then, is a major contributor to economic growth – simply put, economies with higher proportions of educated and highly trained workers are more efficient, more innovative, more entrepreneurial and consequently more productive. In a fast-changing world, their input is essential to constantly regenerate economies to suit the pressures of the times.
Today, investing in human capital by providing greater access to quality education and skills training is no longer a preferred option of governments – particularly those of emerging economies where competition for market share is among the fiercest. It’s now increasingly seen as an essential building block for future economic success. In short, those that don’t make this investment will be quickly overtaken by those that do.
Industry and commerce are highly competitive fields – and, if anything, they’re getting more so. The old factory model – hire cheap – cannot work in the 21st century where the trend is towards sophisticated services and goods produced by value-added industries; high-tech manufacturing for example. ‘Hire smart’ is the way more and more businesses and economies have gone and will continue to go.
With that in mind, we turn to the 2017 Global Innovation Index and take a look at the category ‘Human capital & research’. And what we find there in terms of the Philippines performance among 127 countries worldwide, is alarming – particularly in the context of the Association of Southeast Asian Nations (Asean) peer group, the Philippines’ major competitors.
Take a look. Here are the world rankings on the index for eight Asean member states – Laos and Myanmar were not part of this study. Singapore, 5th; Malaysia, 35th; Brunei, 69th; Vietnam, 70th; Thailand, 72nd; Indonesia, 92nd; Philippines, 95th; Cambodia, 118th. So, the Philippines comes next to last.
That’s bad enough but what’s worse, and what mainly contributed to that poor performance was the Philippines’ global ranking in the sub-category ‘Education’. Here’s what that showed in the Asean context. In brackets are the world rankings for each country’s expenditure on education as a percent of GDP. Vietnam, 17th (26th); Brunei, 68th (88th); Singapore, 76th (102nd); Malaysia, 77th (49th); Thailand, 85th (77th); Indonesia, 103rd (94th); Philippines, 113th (106th); Cambodia, 119th (115th). So, next to last again.
What’s also worth taking note of here is the position of Vietnam, a country with a rigourous education system geared to “training quality human resources, and nurturing and fostering talent”. In 2013 it was spending 5.7% of GDP on education as opposed to 2.45% of GDP spent in the Philippines. This could help explain why Vietnam jumped 12 places on the 2017 Global Innovation Index – to 47th from 59th in 2016 – while the Philippines moved up just one place from 74th to 73rd.
The days when companies can bluff about their expertise are practically over. The global economy which brought with it universal standards and demanding compliance regulations has taken care of that. For free market economies the playing field in that sense has been leveled.
That, however, has placed a greater burden on emerging economies like the Philippines which are fighting to gear up and get on terms. But one sure way that they can do that is to invest in an educated and skilled workforce that will take the fight to the competition.
Without being melodramatic, workforces are economic armies out to conquer new territories and grab greater market share. Thus, those better equipped and possessing greater skills stand a far greater chance of victory than those poorly trained and less well-equipped.