Literature review
Globally, education can be considered as one of the significant factors that can be used to improve the economic performance in a particular area. Therefore, Academic City through facilitating the academic facilities in the Western Region is anticipated to increase the level of productivity in the region and neighboring region. The primary objective of the Academic City is to provide educational resources to the people of Western Region. Availability of skills in the labor force greatly affects the productive capacity of the economy. In the contemporary world, production systems have become more complex than before, and, as result workers with a high level of education are required. In other words, higher education attainment leads to increased earnings, better employment prospects, and increase in the labor-output ratio. Such improvements in any area will lead to growth in the economy, as well as cultural values.
Various studies have indicated that education has a significant impact on the economic growth of a particular economy. Some studies have revealed that more than half of the Gross Domestic Product in developing economies is associated with growth in labor income among the tertiary educated persons. According to Richmond, an every dollar invested in the public higher education system produces 13.31 dollars in the economic activities and 1.39 dollars are given back to the economy through taxation. Hence, this is a clear indication that education is a substantial factor to increase government revenue and also growth in GDP. While education directly increases the tax revenue, the state can be able to increase its expenditure on other infrastructures such as roads and Information and Communication Technology. Consequently, the economy can anticipate an increase in economic activities hence economic growth. According to a study conducted by the Weldon Cooper Center for the Public University of Virginia (2009), public education results to $9.5 billion of annual purchase of goods and services, $24 billion annual contribution to the Virginia’s GDP, and $2.5 billion contribution in the Virginia’s tax revenue.
A well-educated workforce is the key to the economic growth in a particular area. According to Noah and Fisher (2003), states the do not invest in education lures employers because they formulate strategies that do not increase incomes, as a result of low productivity in the labor force. Their findings indicated that high wages are as a result of well-educated workforce, therefore, revealing a strong correlation between the education attainment and the wages in the economy. Therefore, a strong foundation of prosperity or the economic growth can be enhanced by the investing in the education institutions and facilities. Noah and Fisher found that higher quality education does not only increase the economic opportunities for the beneficiaries, but also expand the state economy at a greater extent than any other development policy. Therefore, the ability to accelerate the economy and increase in the workers’ wage strongly depends on the ability to increase the volume of well-educated workers in the labor force. According to George and Hanushek, “an improved education system would lead to a dramatically different future for the US, because education outcomes strongly affect economic growth and the distribution of income. A well-structured education system is also associated with the creation of employment opportunities in the economy. According to Richmond study in Virginia, there were over “144,550 jobs created by higher education operations.” However, the impact of the education on economic and increase in the wage level, can only be felt in the long run. This is because it takes some time to educate an individual so as they can acquire the necessary skills of their careers.
Well-structured education system can increase economic performance in an indirect manner. For example as a result of the established education institution other affiliate and support business are bound to be developed. Such business includes insurance companies and financial institutions. As a result of these businesses, there will be a development in the financial markets and hence economic performance. They will enable the investors to diversify their risks and also specialize in particular services or markets such as restaurants, hotels, bookshops and supermarket among others. With an efficient financial market, the residents of west Region will be able to increase their investment and savings in the economy hence facilitating the buildup and mobilization of capital and the production of goods and services. As a result, the region can increase its productive capacities in the economy.
Schools and education systems have a significant impact on the social values of the area. Education channel students into diversified educational paths and further introduces them to social life chances. Some of the positive impacts of education system to the culture include development in time orientation, individualism and competition and types of learning and knowledge. For example, according to Bannet (1990), education system is geared towards appropriate time management, therefore, improving the American culture which value time orientation. He also argued that schools create an environment where competitive and individualistic behaviors are appreciated. Therefore, in the long-run, students can be able to create competitive business environments and individualism behavior. According to TST Issues Brief, education contributes positively on public health, gender equality, decent work and lead to safer and more robust society. To be specific, improving girl child education is a way of attaining intergenerational and immediate benefits that help to achieve sustainable development. For example, the study shows “an extra year of a mother’s schooling reduces the probability of infant mortality by 5 percent.” The study also revealed that a year into secondary education results to as much as 25 percent increase in wage, in the future life of a girl child. Education on a girl child also helps to dilute the social notion where many cultures believe that a girl child is not supposed to be educated. Rather, she is supposed to learn how to develop qualities of a good wife through social interactions but not in schools.
In conclusion, increase in the education attainment level, in the society has a positive correlation with the increase in the economic and social performance. In this context, growth in GDP and increase in labor income can be considered to be effective measures to indicate how skilled and well-educated workers lead to the expansion of production capacity, hence economic growth. Therefore, the wealth of the society and development on social values can be associated with a well-structure education system. A productive economy consequently leads to high profits and wages, shorter working hours and hence high quality of life. Therefore, investing in education system is a fundamental contribution that an economy can make to improve the wellbeing of the residents and the whole economy, as well.
