Education - Why It's One of the Best Economic Investments a Country can Make
Santiago Bel
November 21, 2025
When discussing productivity, corporations always talk about capital. That is what they use to produce what makes them profit. When talking about “capital,” people usually think of mass-producing factories, pumpjacks sucking the oil out of the ground, or even company provided laptops that employees use during work. However, the most important form of capital in an economy is us.
Machines aren’t what keep the economy going and drive it into the future, humans are. People are the ones that innovate, create, and run the industries that build GDP every year. However, the best economies are the product of well trainer workers and innovative individuals, often the result of specialized education.
Without the knowledge needed, engineers wouldn’t be able to make cars, computer scientists wouldn’t be able to protect our online privacy, and business leaders wouldn’t be able to design the best financial plans to make corporations successful. Industries such as information and technology, healthcare, manufacturing and industrialization, research and development, and entrepreneurship and startups all depend on the competence of people, not machines or how well the economy is already doing.
Education is behind all of this. Whether it be a good primary education, collegiate, or even on-site job training, having a good education leads to better results in productivity. In economic terms, better education is improved human capitall. Developing human capital enhances the productivity or workers. The more skilled and informed people are the more efficiently they can complete tasks, make decisions, and adapt to technological advancements. Many times, learning how to be more efficient as new technology gets developed results in workers continuing to learn how to do their jobs years and even decades into their careers.
Human capital is based on bettering employee skills and knowledge through education and training, sometimes provided by their employing company. The return on investment from training invesmtents can be calculated by dividing the company’s total profits by its total investments in human capital before and after making training employee training uprades, ignoring all other possible variables. It is no secret that this works. Companies that invest in employees retain talented workers and see higher earnings compared to their competitors.
Next is the educational side to it. Recent data from the U.S. Buereau of Labor Statistics from Agusut shows that on average in the U.S., those with a bachelor’s degree earn 1.7 times more per week than those with just a high school diploma or lower, with significant difference in unemployment levels as well. People with better education tend to have higher standards of living. Another economic benefit of higher education, even high school education, is that its not just people that benefit from making more money; when individuals have more to spend, they do, and therefore they contribute towards GDP by buying goods and services, keeping the economy booming under capitalism. Another reason is diversification. Countries in which higher eduction is more easily accessible to a larger percentage of the population, and people can learn about many different industries and fields leads to a diversified population competent in myriad disciplines and trades. Take Venezuela for example. As a country, Venezuela underfunded higher education for decades and only trained individuals how to work in the oil industry. When this industry cracked, the country spiraled into an economic downturn and levels of inflation that are still rampant today. By being diversified, backed by education, countries are more resilience to shock in the economy. Lastly, the better educated people are, the more productive they are, and the more economically strong a nation or region is.
In the end, there are many different ways a country can improve their education systems. The main takeaway isn’t how to do this, but rather to explain why it is important to. Not everyone around the world has access to the education they would like, but investing in higher education has proven to be a worthy purpose for future stability. So next time countries are making budgets for the future of their economies, let’s all hope education has a special place within them.