Return on investment in the education sector «LMF Lamiafinanza

Why do people invest so much time in their education? Is it worth it? The goal for most students is to start working as soon as possible to start earning and repaying the debt accumulated over the years of study.

That student debt is really burdensome when we think, for example, that the cost of education in the United States has risen (according to an estimate) by about 4.6 times inflation in the last fifty years. As a result, college graduates in the United States have an average debt of $ 30,000, and more worryingly, 41% are underemployed.

The old teaching model based on front-loading at an early age provides space for lifelong learning

One of the reasons for this high underemployment among U.S. graduates is that they have not acquired the specific skills they need for a given job. According to McKinsey’s America’s Future of Work report, “the issue of workers’ skills has been increasingly worrying for several years in the United States. Today, technology requires new skills at higher levels, such as critical thinking, creativity, and socio-emotional skills. , which are needed to fill functions in the fast-growing STEM3 sector, are constantly evolving.The old teaching model based on front-loading must at an early age give way to lifelong learning.For a worker, training and education can no longer be completed, before he turns 30 and give him skills that he can use for decades.

The need to acquire specific skills for the world of work is known to such an extent that it has been included in SDG 4. Goal 4.4 states: “by 2030, the number of young people and adults with specific skills (including technical and professional skills)) for employment, decent jobs and entrepreneurship “. It also specifies that “in addition to specific work skills, it is necessary to promote the development of higher-level skills, cognitive and other, and transferable skills (such as the ability to solve problems, critical thinking, creativity, work the ability to communicate and resolving disputes), which can be used in many work environments.

It is not only the necessary competencies that are constantly evolving, but also the profile of the labor market and the demand for certain occupations. On the one hand, automation is phasing out jobs in offices, manufacturing, food service and retail. On the other hand, demographic factors, such as population aging, promote the demand for qualified health care professionals, a field that is experiencing the highest growth rate in the United States.

Skills, lifelong learning and vocational training will be the next battleground

We are convinced that the acquisition of more specific skills for employment, as well as vocational training for subjects with high employability, is on its way to becoming the next battleground for companies operating in the field of education technology (EdTech).

For example, one of the cornerstones of this industry in the United States, Chegg Inc., has recently acquired Thinkful, a skills-based online learning platform. In particular, Cheggs CEO noted that 85% of Thinkful graduates find a job in their field of study within six months of completing the program, “Students are increasingly interested in improving their career opportunities through the acquisition of the most appropriate professional skills. by or immediately after graduation.By integrating Thinkful’s courses into Chegg’s range of educational services, our students will be able to achieve the high quality skills required for the fastest growing professional categories at affordable prices.Thinkful registered over 30 % year-on-year earnings growth because it targeted students directly to help them acquire the skills that matter most to today’s business world. “

Another company, 2U, Inc. steers its strategic development in an even clearer direction. With the 2017 acquisition of GetSmarter, which arranges short courses, in 2019 of Trilogy, which specializes in boot camp, and of edX in 2021, the company now offers a complete range of training courses from free to USD 1000–5000 with a duration from at one or two months, for boot camps from $ 10,000-20,000 of maximum duration of approximately six months, up to full degree courses starting at $ 200,000 of maximum three years duration.

Interestingly, the benefits of this strategy are now becoming clear, as the growth rate of earnings from short courses from the year after the acquisition until the first quarter of 2021 has been faster, twice as high as traditional educations.

Is this the beginning of the end of the traditional education system as we know it? We do not believe that the traditional front-loading form of education will disappear completely, as this formal teaching experience allows students to learn and choose specific courses in the future. But in the long run, we believe that short courses, professional learning and other lifelong learning models offer exciting opportunities.

Flexible work helps to bridge the competence gap

Flexible job opportunities can allow people to start earning while continuing their education, and help them get their original investment back. This is especially true for mature students, who often have to combine family duties and part-time work. It is also important to bridge the gap between the skills possessed and those required in the positions offered by recruiters. In other words, it is necessary to address a particularly painful point that appears repeatedly in business surveys: the “competence gap”. This term describes the skills that are lacking in the talent pool that is present in a company and that are necessary to achieve a particular goal. In a recent survey by McKinsey, 87% of global respondents said they are in a qualification gap or expect it within a few years.

The skills that are lacking are technical: data analysis (43% of the interviewees) and IT / mobile / web design (26%). Facilitated by the remote performance of these tasks, organizations are increasingly turning to project or self-employed workers to solve the problem of the skills gap and thus contribute to the expansion of the so-called “gig economy”.

When it comes to concerts, many of us might instinctively think of Uber, Etsy, and Deliveroo (or just someone who puts up a post in the neighborhood bar offering services, such as small moves). However, BCG data shows that concert economy participants in many cases offer specialized technical and personal services that exceed less skilled workers in some countries. For example, highly skilled self-employed workers account for 42% of the total number in India against 31% of low-skilled workers. Highly-skilled self-employed people are likely to contribute overwhelmingly to the value of the global concert economy, estimated at $ 297 billion, which grows in double digits each year.

A new class of hybrid roles emerges from the concert economy, which is a blend of highly coveted technical skills and necessary skills such as critical thinking, leadership, problem-solving skills, and a spirit of collaboration. Although they are “data-enabled” (ie, “data-enabled”) jobs, from a certain point of view, they are also more human in the sense that they are more dependent on judgment and creativity. They rarely involve routine, repetitive tasks, which explains why they are loved by everyone, especially the younger generation.

Examples of hybrid roles

Digital security

In view of the growing complexity and multidisciplinarity, it is no longer enough for digital security analysts to rely on technical knowledge to perform their work. They must also be able to analyze and interpret data and have business acumen and the ability to communicate in order to effectively assess threatening threats and persuade management and staff to adopt best practice protocols.

Graphic design

To create meaningful designs, graphic designers must increasingly possess coding skills in addition to artistic talent. To effectively use digital design systems and tools, not only deep technical skills are required, but also knowledge of digital campaigns and data when supporting key features such as online marketing, for example.

Recruitment of technical staff

The work of recruiting and managing human resources is increasingly centered on technology. Today, a recruiter with traditionally solid communication and personal interaction skills must also possess competencies within the specific technical area in which they operate. With the growing automation of recruitment processes and the widespread use of technology in human resources, it is increasingly important to have knowledge in data analysis and personnel systems.

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