Investing in Tomorrow Starts With People

Looking around the world today, the value of investing in education and human resources has never been so glaring. Unfortunately, it seems too many countries are obsessed with chasing short-term, narrow interests rather than investing in the kinds of long-term people-first investments that have a chance to pay dividends on a global scale for generations to come.

Let’s take a couple of examples — the first one being a bit of a layup.

¿Qué Me Has Hecho Venezuela?

In Venezuela today, the country’s socialist government has resorted to all sorts of goofy, draconian measures to keep its hold over national resources and, so they say, continue the fight on behalf of “el pueblo.” What this really looks like is price controls, product rationing, cutting the work week back to two days and threatening private businesses.

Every spare penny the state can rub together — and they are few in these days of low oil prices — ends up spent on some form of subsidy to a government-favored interest. Meanwhile, wages have dropped for the average worker, prices have gone up for just about everything and enormous drops in industrial production have led to both a shortage in the supply of basic goods and a total disappearance of economic growth.

Halfway across the world, China is shooting itself in the foot for different reasons, as it continues to restrict Internet access and deny press freedoms to its people. The costs of this policy are steep and difficult to truly estimate, but here are but a few:

• Average citizens miss out on daily opportunities to interact and share ideas with citizens of other Asian nations and the rest of the world through social media like Facebook and Twitter.
• Government firewalls block access to educational websites, associations and online forums where professionals exchange valuable trade ideas every day.
• China’s own expenses in maintaining the “Great Firewall” are an enormous tax and bureaucratic burden on the country.
• The speed and reliability of Chinese Internet — due to VPN use, state monitoring, slowness to adopt — lags behind the rest of the world, recently ranked 91st in the world.

Though their stories are somewhat different, Venezuela and China both illustrate how countries reap what they sow in terms of how they choose to make investments (or in this case, fail to make investments) in the development and productivity of their most valuable asset: their people.

Venezuela has done next to nothing to invest in emerging industries that would bring a diversity of opportunities to its nation and people. The country is a pure petrostate, relying solely on oil-related industries for revenue and then sinking vast sums of public money into social welfare. The policies of global isolationism, press controls, high taxes and state intervention in the private sector have put huge restrictions on the ability of young Venezuelans to create economic independence. Too many Venezuelans are denied the potential to develop valuable skills and contribute to an global economy, and instead are forced to grow up in poverty, waiting with their families in ration lines to get their monthly supply of toilet paper.

In China, denying free access to information cripples the development of human resources necessary to be competitive in the IT and communications sectors. This puts the country at great risk of missing out on future economic growth opportunities by creating a lost generation. Similar to the millions of Chinese who came of age during Mao’s Cultural Revolution and were denied access to foreign language skills and Western technological knowledge, today’s young people are missing out on an incalculable store of information and resources shared daily via the Internet’s myriad professional and social networking communities. As China’s population ages, how will today’s youth handle tomorrow’s burden of economic responsibility when they’ve been too often denied exposure to a shrinking world?

Of course, Venezuela and China are not the only ones stubbornly fixated on short-term interests to the detriment of the public at large. In Saudi Arabia, where the petroleum business accounts for a majority of GDP and more than 90% of government revenues, the country is forced to either outsource huge portions of its labor force overseas or bring in expatriate workers due to an inability to find qualified candidates at home. Investment in education has been so thoroughly lacking that even with a thriving energy economy, Saudi Arabia does not have the necessary supply of technical and engineering professionals to adequately maintain its own lifeblood industry.

Thailand is another example of a country suffering from political problems that stem from a long history of neglecting its working class and rural residents. The mentality of the urban population of Bangkok — with their access to middle-class amenities — has clashed violently with the more conservative and impoverished politics of Thailand’s hinterlands, creating the underlying turmoil that has led to at least a dozen coups over the past 80 years. Failing to consider the concerns of the countryside in national policy decisions has inhibited economic advancement and opportunities for people who want to work and learn.

What’s the Takeaway?

The point is that the United States must embrace the idea of investing in the future of our young people. Because if we don’t, we will see similar results to these other countries that have long ignored human development strategies. We may not become Venezuela — god help them — but we will see long-term blowback if our young people don’t have chances to learn and gain experience in a diverse economy.

This does not mean it’s up to the government alone. In fact, asking the government to spend huge sums of money (and then raise taxes to cover it) is the kind of behavior that could only get the country in deeper economic trouble. Instead, this movement must be driven from the bottom up, where businesses are incentivized to make long-term people investments, and young people are encouraged to take advantage.

For example, private sector businesses should receive tax credits to create on-the-job education programs where they invest in developing younger employees with professional skills. This “Euro model” has already started happening in places like South Carolina where manufacturing companies such as BMW are paying to have their younger employees learn new vocational skills in partnership with local community colleges. These kinds of apprenticeships are a win for everyone involved. Local businesses get better employees and tax breaks, employees get valuable professional skills and high-paying jobs and the region and country receive a more secure financial future as a result.

Another critical piece to the puzzle is recognizing the need for all kinds of different jobs and professional trades. This means understanding the limitations of college. South Korea is a good case study of a country that has put so much effort into sending all of their young people to college that it now has one of the world’s most vibrant corporate cultures. Unfortunately, the nation is struggling to find enough young people to work at the shipyards or auto plants because every student in the country wants an office job and there just aren’t enough office jobs to go around. America needs trade school employees, too, and in many cases, these kinds of careers will pay better and lead to more rapid economic growth.

There are no easy answers, but the question is clear. Will America face the future now by preparing its young people to step up and take on the critical leadership roles of tomorrow?

This is a shared responsibility among individuals, communities, the government and private businesses. Public spending must be balanced with business investment, while local organizations, churches and neighborhoods must chip in with grassroots efforts. Most of all, we need an attitude adjustment in America to start recognizing the importance of building a stronger populace and ending the practice of passing problems down to future generations.

Photo courtesy of Flickr user Ken Bosma.