The Impact of Education on Human Capital and Community Development

Development of people through education is part of the solution in creating a high performing society. That will become increasingly important as we move into the digital world where technology and human capital will determine a great many things about our future economic health. Education, and I'm going to include skilled trades, appears to make broad based improvement in non-market and market aspects of society. Non-market factors could further create the right environment for non-linear societal growth (i.e. meaning new unexplored paths).

Consider this study 'The Impact of Human Capital on Non-Market Outcomes and Feedbacks on Economic Development'. You will notice a few of the things they say happen when we improve education within an area:

1.  Human capital (and R&D) investment and externalities offset diminishing returns from physical capital (i.e. raises the value of physical labor).

2. There is a lag between increased education and direct/indirect measures in the community.

3. Education reduces disparity gaps. 

4.  There is a broad impact on a community in the long run. (The study talks about how education impacts structural human capital issues such as pollution, technology i.e. education dissemination through technology, savings rates, growth rates, and political stability. )

What I pick from this is that if we improve education we find broad based enhancement in the economy. Many of these are going to be indirect measures, but overall there is a net positive to society from educational attainment. I suspect that also includes skilled trades and crafts. While the study doesn't say this specifically, I would believe that skilled trades would impact certain areas while broader education will impact other areas. Both appear necessary in one form or another. 

Furthermore, we might consider improving education quality versus the longevity of educational process. Let us admit it, education is expensive and is a big commitment. Ensuring it is effective is important. This is why I came up with a measurable competency based system that can used to map learning in school and then compare that to what is needed by industry (and various industry sectors if needed) to ensure everyone is leaning what the market needs (i.e. employability)

Before you get all excited. That doesn't mean I don't support the arts. As a matter of point, in today's world the arts and creative development is another important aspect of human capital development. You need new innovative ideas and that comes from neural exploration of concepts. i.e. innovation as a new and unique furthering of an idea and/or paradigm shift breakthroughs. That occurs best in creative environment with creative experiences. 

*In my transactional cluster theory it is going to be important to have the necessary skills and education within the cluster and that could impact the rest of the local economy in a broad based way.