EM and the Education Edge

EM and the Education Edge

Emerging Markets are gaining a distinct competitive edge due to the development of their human capital. Many EM countries have a very clear understanding of the critical role a strong human resource base can provide in terms of boosting their productivity and economic progress, and have prioritised this accordingly.

This has meant that a huge amount of investment has gone into third-level education. For instance, by 2016, China was building the equivalent of nearly one university every week. And while historically the US has dominated graduate numbers, it has now been surpassed by the steady outpouring of Asian graduates.

Importantly though, in terms of future economic impact, the skew of recent Emerging Market graduates has been in Science, Technology, Engineering & Mathematics (STEM) degrees. As recently as 2013, 40 percent of Chinese graduates completed a degree in a STEM subject, more than twice the share in American third-level institutions. Last year, China had 4.7 million new STEM graduates, while India had 2.6 million. The US, by comparison, had 568,000.


Emerging Markets and Education


As the chart above illustrates, this means that many EM countries such as China, India, Russia and Indonesia are well placed to continue their development of a broad base of talent and local know how. And with a human resource base well endowed with a high number of graduates, specifically in STEM disciplines, we can expect much more of the rapid technological innovation we have witnessed from EM countries. This undoubtedly bodes well for future economic value creation in emerging markets.