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. By 2030 there will be a 'human talent shortage' of more than 85 million people. Pre pandemic estimates suggested that the global economy will have a shortage of 40 million workers with higher education and 45 million workers with secondary education, while there would be a surplus of 95 million low-skilled workers.
(Global Business Coalition for Education, 2022)
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).
There is a significant cost to limiting educational opportunities for girls. Barriers to girls completing 12 years of education cost countries between $15 trillion and $30 trillion dollars in lost lifetime productivity and earnings.
(World Bank, 2018)
At least an additional $75 billion a year is needed to meet the UN's goal of quality education for every child by 2030.
(Global Business Coalition for Education, 2021)
Global Fortune 500 companies do not spend a significant portion of their budget on education. It is estimated that of the US$20 billion per year spent on corporate social responsibility initiatives, only US$2.6 billion was spent on education-related activities.
(Business Backs Education, 2015)

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There is a talent shortfall.
By 2030 there will be a 'human talent shortage' of more than 85 million people. Pre pandemic estimates suggested that the global economy will have a shortage of 40 million workers with higher education and 45 million workers with secondary education, while there would be a surplus of 95 million low-skilled workers.
Source: (Global Business Coalition for Education, 2022)

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.
Source: (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.
Source: (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.
Source: (Winthrop et al., 2013).

There is a significant cost to limiting educational opportunities for girls.
Barriers to girls completing 12 years of education cost countries between $15 trillion and $30 trillion dollars in lost lifetime productivity and earnings.
Source: (World Bank, 2018)

At least an additional $75 billion a year is needed to meet the UN's goal of quality education for every child by 2030.

Source: (Global Business Coalition for Education, 2021)

Global Fortune 500 companies do not spend a significant portion of their budget on education.
It is estimated that of the US$20 billion per year spent on corporate social responsibility initiatives, only US$2.6 billion was spent on education-related activities.
Source: (Business Backs Education, 2015)

Make the case

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)
Investing in a child's education improves the livelihoods of women. Providing quality childcare and education helps more women enter the workforce; this could deliver an additional $1.9 trillion - $4.4 trillion of purchasing power parity per year. Focusing on the needs of women would grow global GDP by an estimated 16% by 2030.
(Global Business Coalition for Education, 2023)
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 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.
(UNICEF, 2020)
Investment in education creates a well-rounded workforce for the future. Investing in healthy development and education of children means that companies play an active role in building a stronger, more competent and more equitable workforce with the skills needed to fill the jobs of the future.
(Global Business Coalition for Education, 2016)
21st century skills or otherwise known as 'soft skills' are developed as a part of early childhood education. In a survey of 4,000 UK employers, 24% reported that a significant portion of their staff lacked essential skills to do their jobs – most commonly lacking were teamwork, communication and problem solving skills. Quality ECD can be foundational in fostering such skills early.
(Global Business Coalition for Education, 2016)
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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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.
Source: (CECP, 2018)

Investing in a child's education improves the livelihoods of women.
Providing quality childcare and education helps more women enter the workforce; this could deliver an additional $1.9 trillion - $4.4 trillion of purchasing power parity per year. Focusing on the needs of women would grow global GDP by an estimated 16% by 2030.
Source: (Global Business Coalition for Education, 2023)

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.
Source: (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.
Source: (Winthrop et al., 2013)

A small investment in education yields huge outcomes for employers.
Data 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.
Source: (UNICEF, 2020)

Investment in education creates a well-rounded workforce for the future.
Investing in healthy development and education of children means that companies play an active role in building a stronger, more competent and more equitable workforce with the skills needed to fill the jobs of the future.
Source: (Global Business Coalition for Education, 2016)

21st century skills or otherwise known as 'soft skills' are developed as a part of early childhood education.
In a survey of 4,000 UK employers, 24% reported that a significant portion of their staff lacked essential skills to do their jobs – most commonly lacking were teamwork, communication and problem solving skills. Quality ECD can be foundational in fostering such skills early.
Source: (Global Business Coalition for Education, 2016)

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.
Source: (UN Global Compact, 2013)

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 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, and more.
Education unlocks other company priorities, including climate, public health, inclusion, financial literacy and entrepreneurship.

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