Question

give an example of how institution can affect an economic growth. You should describe how the institution in your example can promote economic growth?

Answer 1

For the purpose of answering this question we would consider Educational Institutions, and the role which they play in developing the society and creating economic growth.

Educational institutions are in reality considered as one of the key areas which have led to the rapid growth of previously third world countries in Asia such as India, China and others to name a few. These institutions provide knowledge to students which in return enhances the overall labour productivity and results in all round development of a nation.

The following are the key ways in which educational institutions help in enhancing the productivity of a nation and leading to economic growth.

(1) Active Research and Development: -

Educational Institutions such as Harvard University and others are pioneers of the industrial revolution as we know today. Most economies grow, primarily because of the research and development which takes place over a period of time and helps in giving competitive advantage to a country.

With the help of such research and development, a country can expand its operations and engage in numerous activities that help in enhancing the competency of the existing labour force, thus leading to economic growth and development.

(2) Imparting Skills and Knowledge to People: -

Educational Institutions impart existing skills and knowledge to people which helps the economic in growing rapidly. Any country which thus has a strong network of these institutions would find it relatively easier to have a knowledge friendly workforce which contributes more towards the success of an economy. A skilled labour force which is up to date with changing technologies is the need of the hour. An educational institute helps in facilitating the same respectively.

(3) Helps in maintaining a healthy workforce: -

Educational institutions not only help in enhancing the skills of the workforce, but also extend to maintaining a healthy workforce. How this works is the additional knowledge which they provide towards disease prevention and control of diseases. Though this may not directly have a link, however in the real world only a healthy workforce is able to give direction to an economy.

Those nations which today are facing crisis in healthcare, hardly have achieved high economic growth possibility. The learning in these institutions thus extends and provides active benefits to all sections of the society.

Please feel free to ask your doubts in the comments section if any.