Education as investment?

Education as investment. Why do companies not invest more in making education systems work?

One of the most common complaints I hear from employers/supervisors/managers where I’ve lived in Uganda and Tanzania is that there aren’t enough competent staff. There aren’t enough people with the basic computer skills, language skills, team work, coordination, and time management skills. Sometimes I hear complaints about a lack of work ethic also, although I tend to think that this is due to a lack of the above mentioned skills. Staff searches take a long time (also because it’s hard to get the word out; internet is not as widely used). Staff turnover is high, as different organizations all need the same sub-set of people.

Recruitment and retainment of good staff drives up labour costs for organizations. While it is desirable from a living wage perspective to have labour compensation rise, companies, logically, should have a large incentive to keep labour costs down. One way would be to increase the pool of suitable candidates.

Flooding the market with foreign recruits isn’t feasible. For one, the Tanzanian government has strict controls over visa requirements for foreigners (especially non-East Africans) to work in this country. Plus, ‘expats,’ where ever they are from, are usually quite expensive (except from China. Currently reading: “China Safari: on the trail of Beijing’s expansion in Africa.” Fascinating stuff).

Another way would be to have a better educated and trained workforce of Tanzanians.

This begs the question, why do companies traditionally have no interest in pushing for better education reforms in this country?

Smaller companies, of course, would not have this longer term perspective. But for larger companies that are chronically looking for staff to expand (with the economy growing at 7% per year*!), why are they not pulling strings, or at least putting in a good word, at the top policy levels to fix the education system?

I’m sure part of the reason is because investment in education would take over 20 years to reap the benefits of a better trained workforce. Part of the reason may be a common resource problem. Why would any one company invest when all the other companies will benefit from a rise in labour quality? Yet, wouldn’t the premise remain that companies should have the incentive to invest in education systems?

I haven’t really developed this idea, but it’s interesting to think about how it’s actually in the interest of the private sector to invest in the public sector. I’m afraid I haven’t seen much of these except in the form of “corporate social responsibility aid” (which, I must say, I don’t really believe in these days). It reminds me of a workshop I attended the other day: we have to make ‘gender equity’ an incentive/benefit rather than a requirement if we really want companies to take gender seriously.

Any thoughts?

(On the flip side, it seems like many Tanzanians are worried about becoming more integrated in the East African Community because the Ugandans and Kenyans are already taking a lot of the available positions. Common reasons cited include better language skills and ‘aggressiveness.’)

* And 6.9% debt. The growth is almost wholly financed by debt borrowing. Translation from my economist colleague: not as rosy as it sounds.