The UK’s economic outlook has shifted. The worst of the depression is behind us and we can see a brighter future peering over the horizon. There is a possible downside though: complacency. Unemployment may be falling, but youth unemployment is stuck on three times the headline rate. Productivity is also slowing down on a global scale.
Combined, these factors will hit businesses hard. Low productivity impacts the chances of sustained economic growth, diminishing what companies can achieve. The question is how and where can this be turned around?
Education and business are not topics often seen hand-in-hand. Businesses are an adult, money-centric concept, while education is focused on learning and youth. However, they have more in common than one would think.
What happens when you leave school, college or university? Some may go travelling, others might continue on the academic path, but the vast majority join the workforce. In many ways education is preparation for entering the world of work. It moulds the general workforce and acts as a prime breeding ground for the next wave of entrepreneurial and business talent.
However, this is not as simple as it seems. Research has shown that employers are finding it difficult to hire entry-level staff that can display key skills such as communication, resilience and problem solving. If the next generation are going to be the future of business in the UK, and, in doing so, have the economy in their hands, there must be change. This must come at grassroots level.
More than pocket money
When we were younger, many of us received pocket money. Be it 10p or ten pounds, it served as a basic financial education, with our parents encouraging us to save amid calls of “don’t spend it all at once!”
This type of lesson is far more valuable than we may realise. Research from the Money Advice Service shows that adult spending and financial habits can be formed as young as seven. Considering this, an informal pocket money lesson does not seem enough to create a change. Young people need to have these vital skills in life and neglecting them will have a widespread negative impact on future workforces and businesses.
All areas of the education system need to be adapted. Be it primary schools, university, teachers or tutors, there must be support and budgets in place to ensure that financial education is taught from an early age.
Financial education improves confidence, business acumen and creativity. It provides the tools to mould young people into the entrepreneurial employees of tomorrow and it creates savvier spenders. This has the potential to put a halt on the declining standard of living that comes hand in hand with low productivity growth, by creating skilled, ambitious, motivated workers that are better equipped when they graduate.
Through encouraging positive financial habits early, the potential of young people can be unlocked. This positions and enables youth to become the business leaders and entrepreneurs at the forefront of future economic growth.
Getting children excited about business
As of September 2014, financial education is part of the National Secondary Curriculum for England, bringing the country in line with Scotland, Wales and Northern Ireland, being delivered through Citizenship and Maths. This is an important step, but far more needs to be done to support teachers delivering financial education to students.
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Research by pfeg (Personal Finance Education Group, now part of Young Enterprise) found that 70% of teachers state their pupils are encountering money and financial decisions earlier than they used to, while 60% of adults believe managing money is more difficult than it was ten years ago.
This is where the Fiver Challenge, run by Young Enterprise and supported by Virgin Money, can have such a huge impact. This is an initiative that pledges five to eleven year olds with £5, challenging them to start their own business
Developing young people’s financial literacy and capability from a young age would ensure they have the ability to make intelligent financial decisions and manage their personal finances confidently. Through financial and enterprise education, young people become productive and entrepreneurial, benefitting business and the economy.
Michael Mercieca is CEO at Young Enterprise