How can education systems promote trade, growth and poverty reduction? Should governments assist the education sector to generate income? Should they protect education from domestic or foreign private involvement? Is migration a desirable development option or a drain on a country’s human resources?

These are among the questions addressed in a paper from the Overseas Development Institute looking at how globalisation – as measured by foreign direct investment (FDI), trade and migration – affects the demand and supply of education and training. It proposes public policies to reconcile human resource development and the processes of globalisation in order to obtain the maximum impact on development.

Evidence is presented from a wide range of countries to show that trade and FDI can have a positive effect on the supply of education and training. Benefits are greater in nations that have relatively strong education systems to start with.

The South African motor vehicle industry provides an example of how government, the private sector and education providers can work together to take advantage of liberalisation and globalisation. South Africa has moved from a position in which quality and costs were not comparable with international benchmarks to one in which some locally-produced vehicles are world class. The experience shows that a developing country with economic strength and state capacity can intervene to encourage international competitiveness.

Costa Rica has demonstrated how skill development policies combined with the strategies of multinational enterprises can deliver results. The country has attracted garment assembly and electronic investors who have worked with local governments and education institutes to develop skills throughout the whole education system.

The author also shows that:

• Primary and secondary schooling has little effect on the probability of migration: south to north migration is concentrated on groups with certain skilled occupations in certain countries.
• While vocational training and tertiary education are helpful in attracting manufacture-based FDI, they need to be appropriate and include engineering and other technical skills.
• Labour migration of South African teachers, nurses and doctors shows that this group of well-educated nationals abroad can act as a source for exporting goods and services, and as a force to encourage investment back into the home country.

Without a strong role of government, market and coordination failures will leave education and training systems disconnected from the realities shaped by globalisation. If education is to help trade and stimulate growth, policies and institutions need to focus on the opportunities provided by globalisation. The author provides options for governments, including:

• encouraging interaction between public and private sectors on education planning and provision
• encouraging tertiary institutions to include the private sector in planning training programmes
• developing policies to address problems caused by loss of key workers, particularly nurses and teachers
• paying attention to all levels of education, not just the primary level
• establishing agencies to coordinate investment opportunities with migration decisions
• keeping up to date with the latest needs for human resource development in order to ensure an optimal match between demand and supply of skills.

Source(s):
‘Globalisation and education. What do the trade, investment and migration literatures tell us?’, Overseas Development Institute, Working Paper 254, by Dirk Willem te Velde, August 2005 Full document.
‘Globalisation and education’, Briefing Paper, Overseas Development Institute, October 2005 Full document.
‘Foreign Direct Investment and International Skill Inequality’, forthcoming in 'Oxford Development Studies', by Dirk Willem te Velde and Theodora Xenogiani

Funded by: UK Department for International Development (DFID)

id21 Research Highlight: 3 March 2006

Further Information:
Dirk Willem te Velde
International Economic Development Group
Overseas Development Institute
111 Westminster Bridge Road
London
SE1 7JD, UK

Tel: +44(0) 20 7922 0300
Fax: +44(0) 20 7922 0399
Contact the contributor: dw.tevelde@odi.org.uk

Overseas Development Institute, UK

Other related links:
'Is the migration of children in Ghana an opportunity or obstacle for education?'

'Understanding African migration for pro-poor policymaking'

'Sending money home: Can remittances reduce poverty?' id21 insights #60

'Responding to the health workforce crisis' id21 insights health #7

'Wealthy countries’ gains maintain the brain drain in the health sector'

'On the move: migration, globalisation and sustainable development'