Question

How does a nation's educational system relate to its economy? e.g., How does education and training interact with the economy?

Why do some businesses flourish while others fail? Do well trained workers cluster (at times) in the same geographical region? e.g., silicon valley.....

Do industries with low barriers to entry for new employees have lower wages? And are the workers at more risk of being laid-off than with industries of higher requirements.? What does this say about education and training? Why do some industries not train?

Answer 1

The primary difference between training and education is that training is a detailed more specific skill development in an individual. Education on the other hand refers to gaining theory-based knowledge through an institution.

Education though theory based and may not always be proven correct in practice forms the basis upon which one can get training. A well-educated economy may not necessarily mean a well-trained economy. In reality though, when population of the economy is educated, it is easier to train them. Education also encompasses the basic understanding of calculation, language and sentence formation, how to deal with difficult situations, basic functioning of the world. This is what forms a strong foundation upon which one may find it easier to gain the specific training needed.

Certain businesses fare better in the market as compared to others since they focus on quality trained workers that the failing industries do not. Eg. McDonald’s fares better than its competitors since it believes in training individuals in a specific task. The person making coffee will be trained only for that task and will be assigned only that task. This assures consistency and great quality. Local firms have one person doing multiple tasks that may result is inconsistent results. Industries in certain areas also flourish since skilled labour is readily available. Eg India has ample supply of labour for hand made cloth, thus firms that tap this resource will flourish more.

In my opinion, industries with low barriers would include firms that do not require highly skilled and specialized labour. The tasks that need to be performed here are simple and can be done by anyone with minimal understanding. Since supply is huge, these firms offer low wages since they know that a lot of people would do the last at lower wages. Since a lot of people are ready to work at low wages and the skillset needed is not specific, workers have a higher chance of getting laid off since someone else is readily available to take up their position. The same is not true with industries or firms that need specific skillset. Eg. Target may fire a cashier or an inventory stacker with a bink of an eye while the same brand may think twice before firing the IT person that handles the technology that the brand uses.

This states that one can not deny the importance of education and that the two go hand in hand. It is the training that helps an individual to put the education to actual use. Certain industries involve tasks that can be carried out by individual after simple explanation and handover. These industries find training as an additional cost that can be done away with. Eg. the printing industry. The instructions are simple, the machine is basic and no skills in particular are needed.