3 steps to address the education crisis and power global prosperity

Swathes of the current generation of young people are being failed from early on in their lives. School enrollment has stagnated for over a decade, leaving 250 million children out of school. In the poorest countries, 90% of children cannot read well by age 10, compared to 55% in lower-middle-income countries (LMICs). Progressing in basic education is challenging, let alone acquiring skills for the 21st-century workforce. Consequently, all of the targets for the UN's Sustainable Development Goal 4 – Quality Education – are at risk, including the target of giving young people the skills they need for good jobs and stable employment.

Investing in education and skills is essential, but funds are limited due to challenged economies, rising interest rates, the climate crisis and humanitarian emergencies. At the current pace, it will take over 100 years for the lowest-performing countries to reach even the minimum learning standards of OECD countries.

Meanwhile, the digital revolution and AI are driving job obsolescence. The knowledge-based economy and emerging sectors require different skills. Often, those skills are not accessible in communities that need them to transform their medium- to long-term prospects.

To address these learning and skills gaps, an estimated $97 billion is needed annually for 79 low- and lower-middle-income countries. This investment is crucial to overcoming the middle-income trap and keeping our planet’s youngest population economically productive.

Although this appears to be a formidable challenge, it is achievable and has been done before. There are encouraging examples of countries that have successfully transformed their learning environments and economic performance through strategic investment in education and skills.

At the end of the Korean War in 1953, Korea – a low-income country (LIC) – was one of the poorest economies on the planet. By 1995 it had become a high-income country (HIC), a member of the OECD and home to world leading industrial corporations. GDP per capita rose from $158 in 1960 to $33,121 in 2023. Singapore ($925 in 1970 to $24,914 in 1995, then $84,734 in 2023) made the same journey (LIC to HIC) in a shorter timeframe through strong educational investment, skills training and, in recent years, preparing the workforce for the digital transformation.

Given the scale of the challenge and the resource constraints, we must focus on three areas:

The $97 billion funding gap can be addressed with innovative resource mobilization instruments. The International Finance Facility for Education (IFFEd), recognized by the G20 as a game-changing innovation in development finance, sits alongside other innovative instruments including Social Impact Bonds and Development Impact Bonds. IFFEd collaborates with governments, multinational development banks and philanthropic partners to scale affordable financing by blending grants and guarantees. For every $140 million invested through IFFEd, $1 billion of concessional financing is generated. This 7x leverage means only $14 billion is needed to close the $97 billion funding gap. Suddenly, it sounds more achievable.

Addressing human capital development at scale is too complex a challenge for any one organization to solve. It is a collective mission that demands bold collaboration, relentless innovation and an unwavering commitment to change. It calls for institutions to break free from outdated models, challenge conventional wisdom and embrace dynamic, data-driven strategies with speed and agility. The time to act is now.

Armed with groundbreaking financial innovations, cutting-edge research and the potential of 21st-century technology, we have an unprecedented opportunity to empower today's youth – and generations to come – to not just succeed, but to lead, create wealth and shape a better future for all. The path forward is clear: we must dare to think bigger, move faster and act with conviction.