Putting education at the heart of the economy

Four recommendations to make the case for financing education, which is critical both to empower individuals and to bolster economic development.

September 21, 2023 by Mariana Mazzucato, University College London
4 minutes read
Students from Azimpur Government Primary School in Dhaka, Bangladesh. Credit: GPE/Chantal Rigaud
Students from Azimpur Government Primary School in Dhaka, Bangladesh.
Credit: GPE/Chantal Rigaud

As the world grapples with unprecedented challenges such as climate change, technological disruptions and geopolitical tensions, there is an ever-increasing emphasis on constructing resilient economies capable of withstanding shocks as well as fostering inclusive and sustainable growth.

The transformative potential of education, particularly when acknowledged as a non-negotiable human right, positions it as a cornerstone for sustainable and inclusive development.

Public education is a key driver of transformative change – it’s our most important asset.

As such, it is imperative to transcend the traditional notion of education as a peripheral concern and instead, position education for all at the very heart of how we design our economies.

4 steps for real economic transformation

First, we need to get rid of the false dichotomy between the innovation state and the welfare state – between the dynamic, entrepreneurial and ambitious economic activity over here and the social services, care and education policy over there. For instance, by granting every individual access to information and data, we not only uphold the fundamental human right to continuous education, but also foster curiosity and empower citizens to innovate.

Recognizing the link between innovation and welfare, the US government has made public funding for the CHIPS and Science Act conditional upon recipient companies providing access to childcare for their employees—bringing together thus, national security concerns tied to semiconductor manufacturing with the responsibility of ensuring the healthy development of the next generation of citizens.

Second, we need a cross-sectoral and whole-of-government approach to put education at the center of how we govern our economy.

The pandemic has shown that education requires the involvement of many different sectors working together. The move to online schooling, for example, has not only been an educational challenge; it has spotlighted the complex web of interdependencies among different sectors: from digital and public health to energy and housing.

As I argue in Mission Economy, defining a mission – such as giving every young person in school access to a computer and internet – can help design policies that are both cross-sectoral and inter-ministerial.

Third, we need to recognize that finance for education is not a trade-off for other policy priorities, but a critical driver of a dynamic economy as the multiplier effect of education expenditure is massive.

Most estimates show that between $2 and $5 are generated in additional spending for every $1 in initial public education expenditure. Nevertheless, there is a considerable financing gap – currently $97 billion per year – for low- and lower-middle-income countries to meet their education targets.

If cuts are made to essential areas that create resilient economies, such as education or health, the economy will not grow.

Fourth, we need to prioritize patient, long-term finance for public education. To do so, the quality of finance matters.

We need finance that is directed towards and designed to achieve ambitious goals. For example, the Global Fund to fight AIDS, Malaria and Tuberculosis was able to make radical breakthroughs in treatments by defining missions around bringing deaths down to zero.

We need to improve the governance, design and delivery of public, private and donor finance to align with the goal of education for all.

Sweden provides a meaningful example of how education policy can be a real driver of economic transformation that is inclusive and sustainable, bringing together the innovation state with the welfare state.

The Swedish government has a high-level mission around a decarbonized welfare state, and one of its levers is to ensure access to school meals that are tasty, healthy and sustainable. This has had far-reaching implications on system processes like food procurement policy, wherein the government needed to redesign supply chains to become more sustainable.

The school meals program has also encouraged participation of school children to design the kind of food they want, empowering them to own the solutions that impact their lives and well-being.

Despite education’s undeniable importance, nations around the world have struggled with treating it as the priority it is. But education can no longer be thought of as a 20th-century assembly line where students are input for industrial growth and teachers are disposable labor.

Education has to be a lifelong endeavor. And it has to be brought to the heart of our economy. If we want to achieve real economic transformation, then it is time to redesign our economies to deliver on education for all.

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The writer presents an original, fresh angle to advocating treating education as the main ingredient in economic Development. The live examples to the four points leave no room for questioning how. Short and to the point.

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