Tag Archives: economy

Economic Growth Correlates with Investment in Education

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TimesofMalta.com

Now more than ever, today’s employees need to possess adequate skills and knowledge to enable them to perform a wider range of tasks and functions within their organisational contexts. The labour market has to become flexible and adaptable to the continuously changing market environment. Moreover, the educational institutions’ investments in curriculum development will help to provide incentives for individuals to commit resources to their careers. Many academic studies have shown that economic growth is increasingly correlated to the effectiveness of the countries’ educational policies and their related curriculum development programmes (OECD, 2012). Educators should ensure that their policies, systems and reforms contribute to the supply of well-skilled people for the labour market. Prospective students of continuous professional development programmes and of higher education courses may be new entrants (school leavers), people continuing to expand their existing knowledge and skills in their workplace or job seekers registering for employment. On the other hand, lower social capital investments can impact on a country’s economic growth prospects as well as on its productivity levels and competitiveness. This may translate in serious negative effects for the individual’s well-being as well as for the cohesiveness of society.

For instance, entrepreneurship programmes in post-secondary or tertiary institutions are usually based on multiple-skills approaches. Students who follow such courses acquire key competences in creativity, innovation as they enhance their business acumen. In addition, they usually develop their social skills, particularly if they work in groups. Students can learn how to work collaboratively in a team environment. Educators should try to adopt student-centred approaches, including case studies, active participation in cooperative learning, exercises such as role-playing, debating, and the like. In fact, assessments of entrepreneurship studies may also involve the delivery of a sales pitch and the drawing-up of a business plan. Both of these tasks can be carried out in groups of three or four students. Ideally, students should also demonstrate their written communications skills. They may be required to produce media releases which feature their unique selling proposition(s) to their chosen markets. Such methodologies may possibly entice students’ curiosity and motivation in the subject. In the process, the students will also learn how to work in tandem as they develop their interpersonal skills.

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In a similar vein, successful entrepreneurs also have to work closely with people. Perhaps, it is critical for business owners (including micro-enterprises) to foster great relationships with employees, customers, suppliers, shareholders, investors and more. It goes without saying that some individuals may exhibit higher interpersonal traits than others, but others can learn and improve upon their existing skills. As prospective entrepreneurs, the students are expected to come up with fresh, innovative ideas, and make good decisions in their projects. Arguably, creativity, problem solving and recognising opportunities in the marketplace are some of the specific skills that may be acquired. However, it is important that the students’ decisions are based on relevant market research. The entrepreneurship programme will have to provide practical skills and knowledge to enable the student to produce effective goods or services in a profitable manner. One of the learning outcomes of this subject is to help students to set their goals and to create good plans to achieve them. Afterwards, the students can proceed with the organisation, leadership and implementation of their project. The students’ multi-skills will help them leverage themselves and to achieve a competitive advantage over others.

 

The theoretical aspect of the entrepreneurship studies teaches students how to develop coherent, well thought-through business plans. The students acquire sufficient knowledge of the main functional areas of business (sales, marketing, finance, and operations). In addition, the students are taught how entrepreneurs raise their capital. They will also learn about financial projections and how to determine the break-even point of their projects.

 

Indeed, the entrepreneurship studies focus on developing the students’ potential skills. Throughout such pragmatic educational programmes, the students will have to use their abilities and talents to operate resources or to manage others with a reasonable degree of confidence and motivation.  The students who are successful in their entrepreneurship studies nurture their skills, knowledge and competences. This contribution suggests that multi-skilling approaches in education can bring increased competitiveness and productivity in the labour market.

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Creating Shared Value Leverages the Value Chain

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Socio-economic actions and environmental changes play a vital role in determining the prices of core commodities. Undoubtedly, the availability of commodities can change the dynamics in supply chain relationships. It is in the interest of suppliers to forge fruitful and collaborative working relationships with their customers. For instance, farm workers are demanding bigger shares from the profits of wine producers, coffee makers and the like. In this day and age, businesses will have to look at new ‘shared value’ models as customers are often expecting greater reliability, higher quality, reduced lead times and frequent deliveries from their suppliers.

‘Creating shared value’ needs to address not only value chain requirements but to ensure that programmes are built on joint principles. Of course, many businesses may be genuinely interested in investing in philanthropic initiatives. However, this particular proposition suggests that businesses can leverage themselves as they gain a competitive advantage.  Inevitably, this notion suggests  that there is a need for co-creative and innovative approaches rather than blueprints.

CASE STUDIES

“Take Novartis as an example. They saw a shared value opportunity in selling their pharmaceuticals in rural India, where 70% of the population lives. The obstacle was not the prices they charged but the social conditions in the region: a chronic lack of health-seeking behaviour in the community, healthcare providers with virtually no healthcare training, and tens of thousands of local clinics without a reliable supply chain. Looking through a shared value lens, Novartis saw these social problems as business opportunities: they hired hundreds of community health educators, held training camps for providers, and built up a distribution system to 50,000 rural clinics.

For Novartis, the result was an entirely new business model that is essential to their future. In the coming decade, emerging markets with similar challenges are predicted to account for 75% of the growth in global pharmaceutical sales. For 42 million people in India, the results are access to a vastly improved level of healthcare that neither government nor NGOs were providing.

Or consider Southwire, a US company that manufactures wire and cable in a small town in Georgia. Their machinists were retiring and the local high school, burdened by a 40% dropout rate, wasn’t producing the workforce they needed. So Southwire partnered with the school, opened a factory nearby to employ the most at-risk students, part-time, using attractive wages as an incentive, and mentored their academic performance. Nearly 100% of the students in the Southwire program completed high school, and 1/3 went on to become Southwire employees. And, by the way, that factory near the school generates a million dollar annual profit.

These examples are not examples of corporate social responsibility or sustainability. They are examples of businesses grabbing hold of a social issue that is at the core of their business, and figuring out how to wrap that into their strategy and operations. These companies are using the resources and capabilities of business to solve very specific social problems in ways that are aligned with the company’s strategy, that strengthen its competitive positioning, and that enable it to make more money” (More details are available in the Guardian – Better ways of doing business: Creating Shared Value).

More blogs about “Shared Value” approaches!

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February 5, 2013 · 4:36 pm

Environment and economy on collision course

According to the latest communication from the the World Economic Forum; weak economies coupled with  extreme weather conditions in some places, have brought greater risks and instability in the international markets. In a highly uncertain economic backdrop, the European Union has avoided a euro break-up in 2012. Whereas, the United States stood very close to fall off from its fiscal cliff, merely a week ago. Of course, business leaders and academics are raising their alarm bells as they fear that many politicians and policy makers are not capable of addressing their fundamental problems.

These arguments were mirrored in  the recent ‘Global Risks 2013’ report, which surveyed more than 1,000 chief executives and owner-managers. This report maintained that the industry bosses are more pessimistic about their economic outlook, than how they perceived it a year ago. Unfortunately, many multi-national firms are facing unprecedented wealth gaps and unsustainable government finances in some of the countries, where they carry out their business. In addition, during this year some areas witnessed a marked increase in severe weather conditions, which may have also affected their operations as well as their bottom-line.

This particular report featured an 80-page analysis of risks which are envisaged for the next 10 years. It anticipates the World Economic Forum’s (WEF) annual meeting, scheduled between January 23rd to 27th. It will be held in the Swiss ski resort of Davos. This meeting will once again symbolise the modern globalised world, where business leaders hailing from successful multinational corporations mingle with  politicians and bankers. On the horizon, the economic front indicates that there are some dark clouds which are causing some euro-zone uncertainty. The report suggested that, “the associated risks of  systemic financial failure are limited, yet they cannot be completely discarded”. It transpires that there are rising concerns in the environmental issues, particularly about the greenhouse gas emissions. Apart from the strict European standards, the failure to adapt to climate change is being perceived as the biggest challenge for sustainability.

For instance, superstorm Sandy created havoc and unnecessary costs on the US east coast, in October. This year, the temperatures in China chilled to a 28-year low. Today, south eastern Australia battled scores of wildfires in heat-wave conditions. It goes without saying that slack resources will have to be dedicated to mitigate the rising risk from severe and unforeseen weather conditions. As a consequence, our well-being and the global prosperity of our future generations may be threatened.

Interestingly, on this occasion the theme in Davos has been dubbed, “resilient dynamism”. Inevitably, the governments and the businesses will have to come up with reasonable strategies and approaches to ensure that critical systems continue to respond to such contingencies. Essentially, the regulatory authorities and the business practitioners are expected to successfully weather the economic and environmental storms.

(source: http://reports.weforum.org/global-risks-2013/risk-case-1/testing-economic-and-environmental-resilience/)

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