Summary of Education and Economic Development
Economic theory did not place much value on education and training for economic growth and development for a long time since Aristotle. This was alright for an agricultural economy where land as physical and fixed capital along with labour were considered as the two factors of production. Demand for goods and services was also quite low as there was sparse and low volume of population. With the turn of the 15th century and the coming to an end of the era of dark ages, there was Renaissance associated with growth of science and technology, industrialisation and mass production, communications and transport, and the emergence of a market economy. Specialised skills and training became necessary.
Adam Smith recognised this reality in 1776 and wrote eloquently about the values of education and training and health and fitness, the human capital, for economic growth and development. This line of thinking grew over time and influenced developmental policy and planning since the 1950s, thanks to the laborious lobbying by economists like Theodore Schultz and Gary Becker. Values of health and education, as human resources, are now well recognised for economic growth and development.