Focus on: Investing in education

Part 4: International Day of Education

Technology and structural breaks – why we need lifelong learning

When a baby boomer retires, he or she will usually have had one single job. By that time, however, a member of Gen Z is likely to look back on at least ten to fifteen jobs, possibly also in some form of self-employment. This prediction highlights the disruptive impact that rapid technological advances will have on the world of work. "However, our educational structures, most of whose roots go back over 200 years, are not suited to these twenty-first century demands that make lifelong learning essential," says Paul Buchwitz, portfolio manager of DWS Invest SDG Global Equities, on the occasion of International Day of Education on January 24, 2022.

This is a reminder from the United Nations that the global community has set itself exactly 17 goals for socially, economically and ecologically sustainable development with the 2030 Agenda - the so-called Sustainable Development Goals, or SDGs for short. The fourth SDG is to ensure equal and high-quality education and to promote lifelong learning opportunities for all. With his globally investing equity fund, Buchwitz aims for a portfolio in which an average of 50 percent of company revenues contribute to achieving the 17 goals.

Structural disruptions such as the phase-out of fossil fuels increase demand

For this reason, many companies, especially in the technology sector, where the discrepancy between education at traditional schools and universities and the reality of work is particularly high, have already said goodbye to their role as purchasers of off-the-shelf human capital. Instead, they are investing in lifelong learning for their employees and increasingly contracting private providers. "Overall, however, only seven per cent of companies see themselves as 'excellent' at meeting the demands of Millennials and Gen Z on the world of work," says Buchwitz. Therefore, the market has great growth potential in the future. Sensitivity to this topic is particularly high in emerging countries such as Brazil, China and India, while it is lowest in Great Britain and France.

He expects further impulses for lifelong learning from structural breaks such as the phase-out of fossil fuels. Denmark, for example, is already investing more than two per cent of its gross domestic product in retraining, while the USA is spending only 0.1 per cent of its economic output. "Retraining is often cheaper than layoffs. For example, it would cost just 180 million Dollar to make 90,000 US coal workers fit for work in the solar industry," says the portfolio manager.

HolonIQ, an industry information service, sized the global market for higher online degrees and micro-credentials at 45 billion Dollar in 2019, forecasting roughly 17 percent CAGR growth, reaching 117 billion Dollar in 2025.


Sabina Diaz Duque                                       Jörg E. Jäger
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