Business Investment in Education Grows

Business Investment in Education Grows

girl_with_laptopPost-secondary training and higher education is a $1.1 trillion dollar a year venture that involves colleges, universities, government agencies and business. Each of these stakeholders is part of a system that intertwines to educate and train the workforce crucial to economic growth and development. Business investment in post-secondary training and higher education has made it a key stakeholder in this system.

Today, obtaining a degree doesn’t mean that workers have completed their education. Businesses invest $177 billion each year on formal training for their employees. In-house training represents 46 percent of this education investment, outside training by other businesses, educational institutions, or trainers is 32 percent and tuition reimbursement for employees is 16 percent.

Most of this investment in employee training is for workers who already have a college education. Employees with bachelor’s degrees receive 58 percent of the training spend and workers with an associate’s degree, or some credit but no degree, receive 25 percent according to “College is Just the Beginning” report from Georgetown University Center on Education and the Workforce (CEW). “The upshot is that formal employer-provided training typically complements, rather than substitutes for, a traditional college education; employer-provided training should not be viewed as a substitute for college or K-12 coursework.” (https://cew.georgetown.edu/wp-content/uploads/2015/02/Trillion-Dollar-Training-System-.pdf).

CEW statistics show that business investment in employee education has increased by 26 percent since 1994. The majority of business investment in training and post-secondary education is for prime-age workers, 25-54, the majority of the workforce. This reflects employers’ need to retrain and upskill current employees in order to remain competitive.

The industries that invest the most in education are the industries that are the fastest growing and experiencing the most change. These are Services, Manufacturing, and Transportation, communication and utilities, according to Center on Education and the Workforce. Each of these is an industry where innovations and new technologies create a need for workers to develop new skills and practices. Our growing population demands better and more efficient delivery of services and new products. The only way for business to meet these demands is to invest in continual workforce education.

Businesses Invest with Partners

New legislative policies also show an increase in the need for investment in education. The Association for Career and Technical Education shows continued growth in career and technical education (CTE). In its annual report “2014 Year in Review” it show that:
• 36 states provided additional funds for CTE in some form
• Public-private partnerships between businesses and education have increased
• 28 states passed legislation designed to accelerate employer engagement with CTE to help align programs with labor market demands
Continued CTE is a way for business, education, and agencies to maintain and increase a workforce that is globally competitive. (http://www.acteonline.org/uploadedFiles/Resources/Publications/2014_State_Policy_Review_FINAL.pdf)

Business involvement and investment in education will continue to grow with innovative programs and disruptions to traditional education. For example, in 2013 AT&T, Georgia Tech and Udacity created the Online Master of Science in Computer Science, the first accredited MS in computer science earned exclusively through the MOOC format. In 2014 Udacity and AT&T launched the first nanodegree program in the MOOC format. In this partnership AT&T will direct course content and Udacity will manage the program.The need for business to be part of the on-going education process will continue to grow. “Learning does not stop at schools and universities. It’s a lifelong process where individuals must constantly learn and relearn technical skills,” says Sebastian Thrun, founder and CEO of Udacity. (http://about.att.com/story/att_and_udacity_launch_online_training_program_nanodegree.html#sthash.mdhsPLN5.)

Archives

Categories