Why Higher Education is Key to the Education (and Economic) Ecosystem

Education creates pathways to economic growth, reduces poverty, increases child well-being, improves health outcomes, strengthens human rights, and is associated with lower crime rates. Higher education has a unique role in preparing learners with the advanced knowledge and skills they need to succeed in today’s global economy.

Within the larger education ecosystem, there is increasing recognition that higher education is a critical component of the education continuum. In regions where primary and secondary education have increased and the youth population continues to swell, host governments face tremendous pressure to expand access to higher education. And it’s no wonder; according to the World Bank, “Well-educated people are more employable, earn higher wages, and cope with economic shocks better.” Indeed, higher education serves as an engine for both social and economic change, and addresses global challenges.

Below we take a look at some key benefits that countries can expect to unlock by strengthening higher education institutions and systems.

Meeting the Demands of Today’s Economy

Primary and secondary education alone are insufficient to meet today’s workforce demands. A global economy and technological advances have significantly changed the nature of work.

Presently, some 40 percent of employers globally are challenged when recruiting employees that have the skills needed to be successful in the workplace. While these jobs remain unfilled, a surplus of workers with limited skills are unemployed or in precarious labor situations as their jobs become obsolete.  A report by the International Commission on Financing Global Education Opportunity found that roughly 2 billion jobs—representing up to half of the world’s jobs—are at high risk of disappearing in the coming decades because of automation.

Programs like the USAID-sponsored Building University-Industry Learning and Development through Innovation and Technology (BUILD-IT) initiative in Vietnam are designed to specifically address this issue. By leveraging diverse government-industry-academic partners that share a goal of tightly linking STEM instruction in Vietnamese higher education institutions, BUILD-IT advances learning and development. Similarly, via the Higher Engineering Education Alliance Program (HEEAP), Arizona State University and an expanding industry consortia are collaborating to transform and modernize top engineering and technical vocational universities in Vietnam.

Higher education plays a pivotal role in developing appropriate and necessary skills in the workforce to meet the demands of employers.

Stronger Local Economies for a Stronger Global Economy

Beyond helping to meet employer needs, investment in higher education is also associated with higher wages. In fact, the World Bank says higher education graduates earn an estimated 15.2 percent increase in earnings, as compared with 10 percent for primary and 7 percent for secondary education. Higher education unlocks greater access to prosperity for individuals.

But higher education not only unlocks individual access to prosperity. Individuals with higher levels of education earn more, pay more taxes, and are more likely than others to move up the socioeconomic ladder. Each additional year of education is associated with 18 percent higher GDP per capita.

USAID’s Higher Education for Economic Growth project in El Salvador illustrates these wide-ranging benefits. This project is working to improve the quality of human and institutional capacity in El Salvador’s higher education sector, promoting innovation and technological development in priority industrial sectors, establishing career development centers, and linking curricula to real world applications. The project is also supporting the development of the country’s first national policy on higher education.

Cultivating a Knowledge Base

As higher education simultaneously reaps workforce and economic growth gains, it also plays a key role in research and development. Many universities, community colleges, post-secondary institutions, and teacher training institutions are developing the next generation of inquisitors, creative problem-solvers, and life-long learners.

For example, the Innovative Agricultural Research Initiative (iAGRI) worked to improve food security and agricultural productivity in Tanzania by strengthening the training and collaborative research capacities of Sokoine University of Agriculture and the Tanzanian Ministry of Agriculture, Livestock, and Fisheries (MALF). This investment in human capital facilitated a flow of knowledge, learning, and successes between partners. It built tools and technology to meet today’s food security challenges while also building the skills and community to tackle future challenges.

Additionally, the Higher Education Solutions Network (HESN), a partnership between USAID and seven top universities launched in 2012, was designed to channel the ingenuity of university students, researchers, and faculty to solve global development challenges. HESN 2.0, through establishment of new university research networks, will continue to work closely with universities around the world, testing new ideas to harness the power of innovative tools and approaches that accelerate development impact and to utilize the research capacity of universities.

Host-country governments and development actors alike are increasingly understanding the value of higher education. While investments in primary and secondary schooling are foundational, higher education plays a unique and catalytic role in developing individuals and societies.