The link between economic development and eductation lies in the fact that education is a facilitator for economic development. Education is a human capital investment, which is expected to yield results that will translate to the improvement and growth of the economy of a nation. This effect can be seen in areas with a high percentage of well-educated people. Such people are able to channel their knowledge into concerete actions that lead to the development of the economy in comparison to those areas where there are few well-educated people.
An example of the link between economic development and education is the value derived from improvement of knowledge. Education involves a formal or informal process of instructing people and depositing a capiatal wealth of knowledge inside of them. For instance, when someone goes to school to train as an engineer, the process will involve series of trainings, tests and other forms of practical and theoretical teachings aimed at improving that person's knowledge. After the individual goes through this formal training, he or she will help develop the economy through the application of the knowledge gained from the training to various projects that will in turn lead to economic dividends.
Another example of the link between economic development and education is the ability of the members in an educated society to use their knowledge to discover new opportunities for wealth creation. For instance, most people in third world countries may not be able to develop models that will help them effectively utilize their resources in an beneficial manner due to a marked low ratio of educated people in comaprison to the percentage of educated people in developed countries. An example of this scenario can be seen in a situation where there is a lack of proper infrastructure for sustaining the efficient distribution of energy, leading to constant power outages and lack of power in certain parts of the community. Such a situation affects the ability of a country to produce successfully and often results in low Gross Domestic Product (GDP) for these regions.
Economic development and education are related by the manner in which education leads to the ability of individuals to create opportunities for economic development. For instance, an educated individual may be able to apply the knowledge gained through education to the development of items like solar energy-powered products as well as other equipment and machinery. These products can increase demand for locally produced goods and also boost the GDP of such countries.
