We are far enough into the economic crisis to know there is no simple way to stimulate our way out of it. The best countries can do is to give more people better skills to compete with to boost growth.
Over the past decade, more than half of the productivity increase in the industrialised world has been driven by better skills, which indicates creating jobs and growth is about working smarter. Without the right skills, people are left on society’s margins, technological progress does not translate into economic growth, and countries cannot compete.
But the toxic combination of unemployed graduates and employers who say they cannot find people with the right skills shows more education does not automatically translate into better jobs and improved lives. At the height of the economic crisis in 2009, more than 40 per cent of employers in Australia, Japan, Mexico and Poland had skills shortages and in Egypt there were 1.5m unemployed young people but 600,000 vacancies.