Work remains an important element in the achievement of income necessary for achievement of economic independence as well as social mobility, among other benefits; which have been largely enabled by capitalism. This is an economic system where factors of production are largely owned by private owners or enterprises and focused towards profit gain based on the market forces of demand and supply. This highlights potential for economically efficient use of labor in pursuit of profit especially when the system undergoes the restructuring process of creative destruction. Fundamentally, the implication is that further economic growth at full employment requires greater efforts in technological advancement as well as capital accumulation, where education is a vital requirement.
Creative destruction, Technology and Education
Creative destruction basically entails replacement of old production units with new ones through incessant product and process innovation mechanisms which embody restructuring that can be inferred as the essence of economic development. The restructuring is affirmed as having been advanced by Joseph Schumpeter who referred to creative destruction as the essential fact about capitalism where production arrangements are created and destroyed and where the impact of technology is stressed (Schumpeter, 1950). The process leads to replacement and realignment of new industries, jobs, practices and firms and fosters a quantum jump in productivity that enhances modernization and regeneration of economic activities towards full employment and widespread social and economic benefits (Kozma, 2011). Fundamentally, full employment depicts a situation where the system economically efficiently utilizes the available skilled and unskilled labor resources leaving an acceptable level of unemployment defined in terms of frictional and structural unemployment.
Since these forms of unemployment involve people between jobs as well as those featuring mismatch between job requirements and skills, it is befitting that education, as the element through which knowledge and skills are acquired, be central to addressing the unemployment. Further, technological advances and capital accumulation required for further economic growth during the creative destruction process of capitalism, implies the need for education in enhancing technological advances. This is affirmed in a report titled ‘The OECD jobs strategy’, which indicates that ‘technological change drives long-term economic growth, productivity and improved standards of living’; dependent on maintenance and expansion of the country’s knowledge base (Organization for Economic Co-operation and Development, 1998). Fundamentally, education is a requirement for technological advances in that it provides essential knowledge and skills that supports technological advancement especially through research and development.
This highlights the centrality of education in enhancing the contributions of technological advances to economic growth and creation of jobs. As Rensman (1996) avers, ‘technological change emerges from technical innovations generated by research and development, patenting and software, and productivity-enhancing developments in the field of education, management and marketing’, where knowledge is the dominant element. Murray and Forstater (2013) proclaim that ‘increasingly robust technological change, rising capital mobility…combined with decreases in the rate of improvement of educational attainment…have led to decreasing job security, increasing long-term unemployment…’. This means that technological change should be informed by improvement in education where school curricula is changed so as to train students for existing (and future) jobs, alongside encouraging continuing education for adults.
With the economy at full-employment, further growth can only be achieved through technological advances and accumulation of capital where education is a vital requirement. Relatedly, technological advances, as depicted by how the internet has not only spawned new businesses but also how it has promoted new processes and practices, highlights their importance to economic growth and enhancement of employment through job creation. As such, education is at the core of technological advancement where it provides a platform on which knowledge and skills relevant to technology production and utilization are acquired. Interestingly, the creative destruction process of capitalism also leads to changes in education as new and relevant knowledge and skills have to be acquired to drive technological advancement on which economic progress rests upon.
- Kozma, R.B. (2011). Transforming education: The power of ICT policies. Paris: UNESCO.
- Murray, M. J. & Forstater, M. (2013). The job guarantee: Toward true full employment. New York, NY: Palgrave Macmillan US.
- Organization for Economic Co-operation and Development. (1998). Technology, productivity and job creation: Best policy practices-The OECD jobs strategy. Paris, France: OECD.
- Rensman, M. (1996). Economic Growth and Technological Change in the Long Run: A Survey of Theoretical and Empirical Literature-Research Report 96C10. Groningen, Netherlands: Research Institute SOM, University de Gröningen, Pays-Bas.
- Schumpeter, J. A. (1950). Capitalism, Socialism, and Democracy-3d ed. New York: Harper and Brothers.