Monday, September 05, 2011

Investing in education or the NBN?

Interesting but unsurprising piece of research spruiking the idea that investment in higher education will produce greater productivity improvement than investing in the NBN.

The summary comment by John Quiggin though says it all. Noting that precise estimates of GDP or productivity boost must be taken with a grain of salt, he said

the general point that improvements in education have a higher payoff than either investments in physical infrastructure or microeconomic reforms is a well-established finding in the literature on economic growth.

It is unfortunate that Australian policymakers are still obsessed with policy ideas from the 1980s (microeconomic reform) or even from the 1950s (physical infrastructure).

The issue for me is that the NBN is a different kind of "physical infrastructure." It is not a coal loader or a new road or rail link, it is not a new generation plant to sell cheap electricity for mineral processing.

It is an enabler of the information society a.k.a. the digital economy. It is in particular an enabler of getting more education output for less resource use. It is also a tremendous mechanism for conducting research and disseminating knowledge, which are the real benefits of higher education investment.

Novae Meridianae Demetae Dexter delenda est

No comments: