Education is what makes a nation strong

Growth and prosperity depend on all our young people fulfilling their potential, which is where educational charity Shine comes in
20th March 2015, 12:00am
Jim O'Neill


Education is what makes a nation strong

Over the long term, a nation's economic growth is driven by two basic factors: the size of its labour force and its productivity. If you are blessed with improvements in both of these, your country's economy will grow and, most importantly, the inhabitants will be likely to enjoy increases in their wealth and living standards. These are the main reasons why the US prospered so much in the second half of the 20th century.

Without good demographics behind its labour force, a country won't be able to achieve strong growth because it will lack the manpower needed to increase productivity. Even significant improvements in demographics don't automatically result in increased wealth, as has been a major problem for the UK in recent years.

As such, economists often regard the various factors affecting productivity as especially important for a nation's long-term interests. And education is probably the most crucial. In my 30-plus years as an economist, I have been involved in creating a number of models to explore what creates sustainable growth and productivity. Education - both directly and indirectly - has often seemed the most important to me.

If young people can't learn the necessary skills, they won't positively contribute to economic growth. This is true for basic schooling all the way up to post-school skills development, whether that is university-based or more vocational.

Evidence to support the importance of productivity is very strong and it is no coincidence that the world's wealthiest nations tend to be those that perform well in this area: the Scandinavian countries, Luxembourg and Switzerland are all good examples, as are East Asian states. I often think that South Korea is especially important in this regard as it has transformed its citizens' average wealth from the level of a less developed economy to one close to the most advanced European economies - and all within my lifetime. Most of these countries appear to have strong educational systems and typically score well in international comparisons.

It was for these reasons, 15 years ago, that I joined some friends to establish Shine (Support and Help In Education), a charity geared towards helping disadvantaged children to access the educational opportunities they need to reach their full potential. I myself went to school in gritty parts of Manchester, where I witnessed first-hand the difference in outcomes between those who achieved educational advancement and those who didn't, so I know how important this is.

When we were setting up Shine, we spent some time researching evidence about what forms of intervention seemed to work well here in the UK and elsewhere. Among our strongest conclusions was that children at primary school were especially likely to benefit from the right support. As a result, Shine aimed most of its initial efforts at projects for primary children. We have persisted with this goal, although we now also support programmes for secondary children.

Nothing ventured, nothing gained

Our approach is similar to that of a venture capital firm, but with an educational charitable purpose. We aim to find projects that we can help to grow and sustain themselves beyond the period of our support. Along the line, we look to have our projects taken over by others, then move on to other innovative ideas that might benefit from our backing.

Some of our programmes have grown exponentially - for example, Shine on Saturday, in which children who need additional help attend school on a Saturday morning for a number of weeks. We have considerable evidence that children who attend these weekend sessions gain long-term benefits from the extra tuition. We therefore hope that this scheme will grow further, even becoming national, and that more schools will choose to part-finance it themselves - perhaps, in England, by using pupil premium cash.

I have been a non-executive director of the Department for Education for the past year and a half. Through this role, I have become more interested in the role of the pupil premium in helping to foster better educational outcomes for young, disadvantaged children, which will result in a more productive future for them and us all.

Schools around the country are currently free to choose how to use the money to improve disadvantaged children's education. The premium is a very smart concept. But, in keeping with my training as an economist, I believe it can be used more effectively.

In particular, the DfE (as well as the Education Endowment Foundation, which independently tests new projects to gauge their effectiveness and scalability) should play a stronger role in helping schools to be more aware about what interventions are available and could be especially effective for them.

Although schools should remain free to choose how to spend the premium, it would be sensible from a macroeconomic perspective to offer rewards or incentives for using the funding efficiently and cost-effectively. This is something I am discussing with staff at the DfE and hopefully we might be able to persuade ministers to pursue this goal. It would be modest step towards accelerating better outcomes, which can only boost our children's futures and our nation's productivity.

Jim O'Neill is a co-founder of the educational charity Shine, a non-executive director of England's Department for Education and an economist, known for coining the term BRIC to describe the rapidly growing economies of Brazil, Russia, India and China

Light up your life

The Shine Trust is offering grants worth up to pound;15,000 to teachers with a great classroom idea that will help students from disadvantaged backgrounds to achieve.

The easy application process is open until midnight on 27 April and any teacher working with students up to the age of 18 can apply.

For more information and to download an application form, visit bit.lyShineApplication

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