Importance of education and training in the developing economy and the current trends of employment in 150-200 words
Answers
Answer:
Explanation:
Knowing how education and training interact with the economy can help you better understand why some workers, businesses, and economies flourish, while others falter.
As the labor supply increases, more downward pressure is placed on the wage rate. If the demand for labor by employers does not keep up with the supply of labor, wages usually fall. An excess supply of workers is particularly harmful to employees working in industries with low barriers to entry for new employees, i.e., they don't have a degree or any specialized training.
Conversely, industries with higher education and training requirements tend to pay workers higher wages. The increased pay is due to a smaller labor supply capable of operating in those industries, and the required education and training carries significant costs.
KEY TAKEAWAYS
The knowledge and skills of workers available in the labor supply is a key determinant for both business and economic growth.
Industries with higher education and training requirements tend to pay workers higher wages.
Differences in training levels is a significant factor that separates developed and developing countries.
An economy's productivity rises as the number of educated workers increases since skilled workers can perform tasks more efficiently.
How Education Benefits a Nation
Globalization and international trade require countries and their economies to compete with each other. Economically successful countries will hold competitive and comparative advantages over other economies, though a single country rarely specializes in a particular industry. A typical developed economy will include various industries with different competitive advantages and disadvantages in the global marketplace. The education and training of a country's workforce is a major factor in determining how well the country's economy will perform.
Training
A successful economy has a workforce capable of operating industries at a level where it holds a competitive advantage over the economies of other countries. Nations may try incentivizing training through tax breaks, providing facilities to train workers, or a variety of other means designed to create a more skilled workforce. While it's unlikely an economy will hold a competitive advantage in all industries, it can focus on a number of industries in which skilled professionals are more readily trained.
Differences in training levels is a significant factor that separates developed and developing countries. Although other factors are certainly in play, such as geography and available resources, having better-trained workers creates spillovers throughout the economy and positive externalities. An externality can be a positive effect on an economy due to a well-trained workforce. In other words, all companies benefit from the external factor of having a skilled labor pool from which to hire employees. In some cases, the highly-skilled labor force might be concentrated in a specific geographic region. As a result, similar businesses may cluster in the same geographic region because of those skilled workers (e.g., Silicon Valley, CA).
For Employers
Ideally, employers want workers who are productive and require less management. Employers must consider many factors when deciding whether or not to pay for employee training.
Will the training program increase the productivity of the workers?
Will the increase in productivity warrant the cost of paying for all or part of the training?
If the employer pays for training, will the employee leave the company for a competitor after the training program is complete?
Will the newly trained worker be able to command a higher wage?
Will the worker gain an increase in bargaining power or leverage for a higher wage?
If increases in pay are warranted as a result of the training, will the increases in productivity and profits be enough to cover any pay raises as well as the overall cost of the training program?
While employers should be wary about newly trained workers leaving, many employers require workers to remain with the firm for a certain amount of time in exchange for the paid training.
Businesses may also face employees who are unwilling to accept training. This can happen in industries dominated by unions since increased job security could make it more difficult to hire trained professionals or fire less-trained employees. However, unions may also negotiate with employers to ensure its members are better trained and thus more productive, which reduces the likelihood of jobs being shifted overseas