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Education and

the Business Case

Key message

Education drives future business.


It provides the skills required for a talented workforce, fuels innovation, expands business opportunities, boosts wages, promotes economic growth, and creates more affluent consumers. Investing in education is investing in the skills and talents of the next generation — the foundation for the future growth and prosperity of the business community.
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Key challenges
  • There is a talent shortfall. Nearly seven in 10 employers reported talent shortages in 2019, the worst level ever and a jump of 17% from the year before and more than three times higher than a decade ago.
    (CNBC, 2020)
  • If current trends continue, by 2030 less than 10% of young people in low-income countries will be on track to gain basic secondary level skills. The costs of this education crisis – unemployment, poverty, inequality and instability – could undermine the very fabric of our economies and societies.
    (Education Commission, 2016)
  • There is an economic cost to not investing in education. In India alone, nearly two-thirds of children born each year do not finish secondary school for a plethora of largely preventable reasons. In pure economic terms, this represents an opportunity cost of over US$100 billion to national annual economic output, or about 5% of GDP.
    (Winthrop et al., 2013).
  • When public education systems are weak, the business community incurs significant costs. Companies bear costs to compensate for poor-quality education and the low skill levels of graduates, including investing in remedial training programmes. In India, for example, in one five-year period information technology companies almost doubled the amount they spent on training employees, from US$1 billion in 2007 to close to US$2 billion in 2011.
    (Winthrop et al., 2013).
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  • More and more businesses are playing an active role in education. In a study of 250 companies, 28% of total corporate philanthropic giving went to education programmes, making it the number one cause that businesses supported.
    (CECP, 2018)
  • Corporate support for education can have a greater social impact if it is better coordinated. Although US Fortune 500 contributions to global education were reported to be small, short term, uncoordinated and not reaching the most marginalised, the total contribution was not negligible at just shy of US$500 million. This is equivalent to about two-thirds of the entire United States Agency for International Development (USAID) education budget.
    (Van Fleet, 2011)
  • Global Fortune 500 companies invest a lot in education. It is estimated that of the US$20 billion per year spent on corporate social responsibility initiatives, US$2.6 billion was spent on education-related activities.
    (Varkey Foundation, 2015).
  • Supporting education in emerging markets will have high payoffs. By 2030, not only will emerging market economies contribute 65% of global GDP but they will also be home to the majority of the world’s working-age population.
    (Winthrop et al., 2013)
  • CEOs say lack of investment in education is costing them money. In a global survey of more than 1,000 CEOs, almost 30% said that talent constraints kept them from pursuing market opportunities. Labour costs are increasing; in the same survey 43% of CEOs said talent-related expenses, including turnover, have a negative impact on their firm’s growth and profitability.
    (Winthrop et al., 2013)
  • A small investment in education yields huge outcomes for employers. Data from a ‘typical’ Indian company shows that US$1 invested in education today can return US$53 in value to the employer at the start of a person’s working years.
    (Winthrop et al., 2013)
  • Education’s spillover benefits save lives and promotes a healthy workforce. A healthy workforce contributes to a stable operating environment. Over the past four decades, the global increase in women’s education has prevented more than four million child deaths. If all children completed primary education, 700,000 cases of HIV/Aids could be prevented annually.
    (UN Global Compact, 2013).
  • Getting all children into primary education, while raising learning standards, could boost economic growth by 2% annually in low-income countries. If all students in low-income countries acquired basic reading skills, 171 million people could be lifted out of poverty, equivalent to a 12% reduction in world poverty.
    (UN Global Compact, 2013)
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Key Q&As
  • Isn’t education just another philanthropic donation that doesn’t engage core business?
  • Actually, the business community can bring an entire toolbox of core business assets to generate social impact in the education sector. These include employee volunteerism, expertise, goods and services, supply chains, corporate social responsibility, ESG investment, philanthropy, human resources policies, communications and the voices of senior leadership.
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Key opinion
Kristalina Georgieva Managing Director Imf Headshot
Kristalina Georgieva
Managing Director of the IMF
Safeguarding our post-pandemic future means safeguarding our human capital. Over a billion learners across the world have been affected by the virus-related disruption to education. That is why we need more investment—not just spending more on schools and distance-learning capacity, but also improving the quality of education and the access to life-long learning and re-skilling. These efforts can pay large dividends in terms of growth, productivity, and living standards. We can build a more resilient world by harnessing the vast potential that education provides for people to learn, grow, and transform their lives.
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Key talking points
  • An educated world is good for business. It means a talent pipeline for skilled employees, consumer bases with more disposable income, increased innovation and economic growth
  • The business community can bring all of its assets to support education. These include employee volunteerism, expertise, goods and services, supply chains, corporate social responsibility, ESG investment, philanthropy, human resources policies, communicat
  • Education unlocks other company priorities, including climate, public health, inclusion, financial literacy and entrepreneurship.
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