Educational attainment vital for our economy

The quantum of Australia’s investment in education is important, but just as critical is how that money is spent – evaluation, testing and refining to ensure continuous improvement, data that tracks progress, and scaling what works – must be central to any efforts aimed at improving educational performance. 

They are the hallmarks of a nation serious about getting the most out of an innovation and science agenda. 

The impact of education isn’t just restricted to the more than 3.6 million young Australians returning to school or starting there for the first time.

It’s a key influence on Australia’s capacity to innovate, be internationally competitive and socially cohesive.

It directly impacts on Government income and expenditure, at all levels of government.  We’re all impacted — either directly or indirectly — by how well young Australians do educationally.

How these young people do at school – including the education outcomes they achieve – will influence their economic and social circumstances across their lives.

In April last year, CEDA released its Addressing entrenched disadvantage in Australia report. It identified that around 1.5 million Australians experience chronic or persistent disadvantage. The report argued this needed to be addressed — for “compelling economic reasons and as a civil society”. 

Improving educational attainment, particularly for children from disadvantaged backgrounds, was identified as the most effective way of breaking the cycle of entrenched disadvantage.

In the period since the release of the CEDA report, there’s been national discussion about the importance of STEM – Science, Technology, Engineering and Mathematics – to Australia’s long-term wellbeing.  Business, government and the wider community have all participated.

Work by PwC for example, has highlighted that 75 per cent of the fastest growing occupations now require STEM skills.

National policy interest in STEM and innovation was highlighted by the release in December last year of the Australian Government’s National Innovation and Science Agenda.

Emphasising Prime Minister Malcolm Turnbull’s message that “the most valuable capital today is human capital”, the agenda highlights that “the talent and skills of our people is the engine behind Australia’s innovative capacity”.

This is a message which resonates at an individual and organisational level, across all sectors.

In the context of these welcome national policy efforts around human capital, innovation and STEM, the most recent NAPLAN data highlights a continuing challenge facing Australia. 

The data shows that young people from disadvantaged backgrounds continue to perform well below that of their more affluent peers across all subjects, including reading, mathematics and information communication technology (ICT) – key subjects for their future economic and social participation and for Australia as a whole. 

There are large differences for example, in ICT literacy performance for Australian students, based on their parents’ education and employment level.

Around 70 per cent of students whose parent had a Bachelor degree or higher attained the desired NAPLAN ICT proficiency standard, compared to less than 40 per cent of students whose parents’ highest level of education was Year 11 or below.

Australia can and must do better to ensure all students – regardless of their family circumstances – are able to achieve the best educational outcomes they are capable of.

As most of us know from our own experience, skills development is cumulative — success at each stage of life greatly enhances the chances of success at the next stage. 

If crucial skills, knowledge, attitudes and behaviours aren’t developed across childhood and adolescence, they become increasingly difficult and expensive to acquire later on.

As Nobel economist James Heckman and his colleague Flavio Cunha have shown, for disadvantaged children, steady human capital investments throughout a young person’s life, rather than a focus of support at only one stage, for example preschool or adolescence, pay the greatest dividends.

Australia’s capacity to address entrenched disadvantage is complementary to its ability to develop human capital and innovation capability.

As we optimistically begin the New Year, there is much that governments, community and business can and must do together to improve the educational outcomes of disadvantaged children.

This will benefit not only those young people across their lives, but the economic and social fabric of 21st century Australia.     

Read Anne Hampshire's chapter in Addressing entrenched disadvantage in Australia.

Watch Anne Hampshire's interview with CEDA on what can be done to address entrenched disadvantage in Australia.