Education should focus on investment in human capital

13Mar 2018
The Guardian
Education should focus on investment in human capital

Although inner-city populations present many workforce readiness challenges, inner-city residents can also be an attractive labour pool for businesses that rely on a loyal, modestly skilled workforce.

Human capital will be the key factor linking innovation, competitiveness and growth in the 21st century. Photo/WEB

There is the potential to build on this resource, with new approaches to education, job placement, and training.


There are several definitions of the term "inner-city." We use the term to refer to economically distressed urban communities that we have defined, drawing on the literature, as census tracts in which the median household income is no more than 80 percent of the median for the SMSA and in which the unemployment rate is more than 25 percent greater than the state average.


The term is perhaps most widely understood to mean urban areas that commonly have large minority populations and high levels of poverty, unemployment crime, single parent families, high school dropout rates, and so forth.


Because of these realities (and even worse perceptions), some are uncomfortable with the term. Our definition recognizes these realities and perceptions, and attempts to address them head on.


However, this requires debunking three deeply entrenched myths about the nature of inner-city residents. The first is that inner-city residents do not want to work and opt for welfare over gainful employment.


Although there is little doubt that inner cities as a whole have an undereducated, under skilled population, with a disproportionate number of people ill equipped for work for a variety of reasons, many employers report great satisfaction with their inner-city workforce.


In our survey of inner-city companies in Dar es Salaam, 65 percent of businesses cited an available workforce, 60 percent cited a low-cost workforce, and 50 percent cited a diverse workforce as critical or important advantages to their inner-city location.


In Tanga, just 4 percent of companies were dissatisfied with their employees' skill level and 15 percent with their work ethic. The following quotations are from our interviews:


“We have no problem finding people. They come to us. We hand out 2-4 applications every day.... we have no problem getting them up to speed.... There are a lot of nice people here.... we've never had crime problems or seen drug problems.”


“We're very devoted to our workforce. At the present time, it is the single advantage to this location. We have no problem finding willing and able workers.... We get two or three applications per day.”


These perspectives are reinforced by a study in central Morogoro, which concluded: "The ratio of job seekers to successful hires in the fast food restaurants studied . . . is approximately 14 to 1."


However, there is clear evidence that the work ethic and qualifications of some portion of inner-city residents are sorely lacking, supporting the view of those who argue that investment in human capital is a priority.


The following three quotations reflect all-too-common comments we have heard from inner-city employers:


“We are dying for qualified labour, but we can't afford to hire someone who can just show up for work.... There are a lot of unskilled people available, but they don't meet our needs.”


“Of the inner-city residents we try to hire for semiskilled welding jobs, more than half flunk a drug test, and few make it through the internship period.”


These quotations raise a number of important issues. First, they underscore the reality that the inner-city workforce has a disproportionate number of people who are problematic employees.


Hence, to hire from the inner city, companies must have effective strategies for identifying good employees. Cultivating personal networks in the community and building relationships with CBOs are essential.


In fact, there is a demonstrated capacity for entrepreneurship among inner-city residents, most of which has been channeled into microenterprises and the provision of social services.


For instance, inner cities have a plethora of social service providers as well as social, fraternal, and religious organizations. Behind the creation and building of those organizations is a whole cadre of local entrepreneurs who have responded to intense local demand for social services and to funding opportunities provided by government foundations, and private-sector sponsors.


Now, the challenge is to create a climate whereby other inner-city residents, with similar talent and commitment, will build for-profit businesses that become meaningful employers and create wealth.


A third myth about inner cities is that skilled minorities--many of whom grew up in or near them--will inevitably work or create businesses in more affluent areas.


Today's large and growing pool of talented minority managers represents a new generation of potential inner-city entrepreneurs. Many of these managers have developed the skills, networks, capital, and confidence to join or start entrepreneurial companies in the inner city.


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