Academic journal article Journal of Economic Issues

Can Caribbean Education Attract Knowledge-Based Foreign Direct Investment?

Academic journal article Journal of Economic Issues

Can Caribbean Education Attract Knowledge-Based Foreign Direct Investment?

Article excerpt

Institutionalists have long recognized the importance of education to a country's development. Thorstein Veblen argued that the immaterial equipment of a nation might be the most significant category of its assets and that its embodiment in workers makes a nation's tangible assets useful. (1) The immaterial equipment expands through education, which increases the nation's "common stock of intangible, technological equipment," and the history of the growth and use of this stock constitutes "the history of the development of material civilization" ([1919] 1990, 328). Clarence Ayres ([1944] 1962, xxi) said "the most important factor in the economic life of any people is the educational level... of the community." And in his monumental study of Asia, Gunnar Myrdal (1972, 378) wrote, "[E]ducational policy must have the central purpose of directing and apportioning educational efforts so as to give a maximum impetus to national development." Institutionalists have also recognized that the content and function of education change as society evolves. Veblen said that "the knowledge acquired under the priestly teachers of the primitive community was a knowledge of ritual and ceremonial.... What was learned was how to make oneself indispensable to the powers [preternatural agents], and so to put oneself in a position to ask, or even to require, their intercession in the course of events or their abstention from interference in any given enterprise" ([1899] 1953, 236). This is the knowledge of those "whose habits of thought are not shaped by contact with modern industry" (237). As society develops, however, exoteric knowledge, "comprising chiefly knowledge of industrial processes and of natural phenomena which [are] habitually turned to account for the material purposes of life," assumes greater importance.

Education can perform a "technological" and a "ceremonial" function. An example of a "technological" function of education is when education helps to promote the industrial development of a country. Ayres ([1944] 1962, xxiii) pointed to the "technological" function of education when he argued that the Meiji revolution in Japan and the Bolshevik revolution in Russia not only transformed the power structures of those countries but, more importantly, they also effected an educational revolution that made industrialization in those countries possible. If it slows down a country's structural transformation, education performs a "ceremonial" function. Veblen, for example, vilipended the curricula at institutions of higher learning in his time that, he asserted, tended "to lower rather than heighten the industrial efficiency of the community" ([1899] 1953, 246-247). And, in a provocative study, Martin J. Wiener attributed Britain's industrial decline to "ceremonial" elements rooted in Victorian values, including Victorian values surrounding the educational system (1981). (2)

This article looks at Caribbean education to determine whether it is turning out an adequate pool of knowledge-skilled workers to make the region more attractive to foreign direct investment (FDI). It is said that Caribbean countries must have inflows of FDI to help reduce their relatively high levels of unemployment, but their educational systems are not producing in adequate quantities the kinds of human skills that have become the principal inputs in production processes. (3) The principal reason for the mismatch between the output of the educational system and the new knowledge-skill requirements of production processes is the "ceremonial" function of Caribbean education that tends to produce a relatively large number of students pursuing career paths to which society attaches much status but a small amount of knowledge skills for which foreign investors have a high demand. (4)

Although a large pool of knowledge skills is increasingly becoming important to countries trying to attract FDI, it is not being suggested that such a pool is a sufficient condition to attract FDI to the Caribbean. …

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