Accelerating innovation: The language multiplier effect on economic prosperity

Accelerating innovation: The language multiplier effect on economic prosperity A POLICY BRIEFING PAPER FOR MINISTERS AND EDUCATION POLICY-MAKERS

by EF Corporate Solutions

Contents 1. Executive summary 2. Adapting to the 21st century 3. The language multiplier effect on GDP 4. What governments can do 5. Recommendations: the three-step framework

EXECUTIVE SUMMARY Nations that want to build competitive economies need their workforces to have the skills to meet the demands of a fast-evolving global marketplace. But those skills are changing.

Economist Intelligence Unit research in 2015 shows global businesses are prioritising innovation – and with it a set of communication, creativity, and collaboration skills to ensure they can adapt. Yet for businesses, a drought in these skills threatens to slow their ability to compete. Some 81 percent of respondents said “increased investment in communication skills of staff would significantly increase the firm’s ability to innovate”.

EF – the world’s largest private education firm – has taught over 20 million people how to speak English: the international language of business. Every day, we see thousands of companies struggling to communicate with their customers, suppliers and one another.

Those companies tell us they need graduates and job applicants to have better communication and English skills when they enter the workforce so they can be more competitive in the global economy.

Our research, investments and 50 years’ experience in private education point to one conclusion: business could be more competitive if governments provided people with better communication and innovation skills during their formal education.

This would provide a stronger framework to adapt to change and therefore enable economies to enjoy greater opportunities for healthy GDP relevancy in the global economy.

To create such a strategy, a great deal can be accomplished in the short term. In this paper, we outline a three-step framework to enable this transition and take advantage of the multiplier effect:

1 Act now to see results in one or two years. Immerse teachers in new skills through intense-learning and teacher-training programmes. This has a positive multiplier effect on the grades of students and opens doors for further learning.

2 In the long-term, emphasize better language skills in parallel with the “Four Cs” – creativity, collaboration, communication and critical thinking – as these interrelated proficiencies have a multiplier effect on innovation and competitive growth.

3 In the very long-term, reinforce the framework and encourage development of ongoing life skills. Healthy GDP is a moving target and businesses will require new skills. The three-step framework provides a multiplier effect for workforces to faster adapt to change and stay relevant in the 21st century economy.

Accelerating innovation: The language multiplier effect on economic prosperity

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ADAPTING TO THE 21ST CENTURY People need to learn how to be flexible and adaptable, how to think creatively and innovatively.

Just as important, they need to be prepared to continue learning throughout their lifetimes.

“Education has long been viewed as an important determinant of economic well-being”, Stanford University’s E.A. Hanushek and the University of Munich’s L. Wössmann wrote in a 2010 article for the International Encyclopedia of Education.

But economic well-being in today’s world of globalisation and rapid technological change requires new skills for the workplace. The rapid pace of change in consumer technology presents a challenge for business, governments, and educators alike. Without the ability to keep up, no company can hope to survive for long. And that means workforce skills must keep up with these changing requirements.

Businesses recognise this. Creating new products and services is now a top-three priority for a majority (54 percent) of business organisations, according to a Economist Intelligence Unit study – The innovative company: How multinationals unleash their creative potential. Yet companies are also finding that technological

advances aren’t reducing the need for human skills. Personal relationships and person-to-person communication are still vital for business success, especially in a global setting.

The Four Cs In a report titled Preparing 21st Century Students for a Global Society, the U.S. National Education Association identified the importance of developing skills in the “Four Cs”.

“What was considered a good education 50 years ago ... is no longer enough for success in college, career, and citizenship in the 21st Century”, the report states. “(W)e interviewed leaders of all kinds to determine which of the 21st Century skills were the most important for K-12 education.

There was near unanimity that four specific skills were the most important.

They became known as the “Four Cs” – critical thinking, communication, collaboration, and creativity”.

The 2014 issue of the Global Innovation Index – a report put out

annually by the World Intellectual Property Organisation, the business school INSEAD and Cornell University – came to a similar conclusion: what distinguished innovative, future-ready workers from non-innovative ones, it found, were such self-identified skills as “ ‘coming up with new ideas and solutions’ (creativity), ‘a willingness to question ideas’ (critical thinking), and ‘the ability to present new ideas or products to an audience’ (communication)”.

“Over recent decades, rapid technological change has revolutionised many aspects of everyday life”, the Global Innovation Index noted. “In this context, education systems need to equip young people with the skills to both participate in and respond to innovation in the workplace.

Moreover, especially in light of the recent global economic crisis, improving skills is one of the most important ways to raise innovation, productivity, and economic growth, and to improve social welfare and equality”.

These skills will be increasingly needed in a fast-changing, hypercompetitive, and global economy. This will require new efforts from both businesses and governments.

“Improving skills is one of the most important ways to raise innovation, productivity, and economic growth, and to improve social welfare and equality” — Global Innovation Index 2014

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Figure 1 The skills bottleneck

£

HEALTHY GDP

—4— This in turn has an impact on GDP and economic well-being. Widening the skill base provides a stronger ecosystem and culture for communication, collaboration and innovation.

—3— STRONG BUSINESS

Business therefore suffers delays in bringing new products and services to market.

—2—

SKILLED WORKFORCE

Research shows there is a gap in what skills businesses require from employees. This is causing a bottleneck effect in how fast and effectively companies can innovate and compete.

—1— EDUCATION

Accelerating innovation: The language multiplier effect on economic prosperity

Education provides the key opportunity to build an innovationready, adaptable workforce.

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THE LANGUAGE MULTIPLIER EFFECT ON GDP For companies to accelerate innovation, communication is particularly important. In today’s global economy, effective communication increasingly demands fluency in the language of business: English.

The skills bottleneck Of all the Four Cs, we see communication as the most important.

It is a foundation to the others and the key function for learning itself.

EF – the largest private education firm in the world – has trained more than 20 million students and thousands of global companies in English language. Every corporate and government client we work with tells us they face a communication skills gap that is either slowing progress or acting as a barrier to growth.

The multiplier effect – English and innovation Correlations between the latest Global Innovation Index and the EF English Proficiency Index (EPI) show the multiplier effect of language and innovation. Of the 20 top-ranking countries for innovation in the Global Innovation Index, 16 – more than 75 percent – were featured in the EPI as countries that either speak English as a first language or have a high or very high proficiency in English [fig 2].

Those countries include Switzerland in the top spot (high proficiency in English), followed by the

U.K. (first language), Sweden, Finland, the Netherlands (all with very high proficiency in English), the U.S. (first language), Singapore (high proficiency in English), and Denmark (very high proficiency in English).

“The numbers show that international business, particularly in technology and consumer-facing sectors, is transcending local cultures”, notes a 2013 report entitled The Rise of the Linguarati 1 by Michael Hulme, a professor at Lancaster University who is also director of the Social Futures Observatory. Hulme continues, “In short, an international culture of English-speaking global business already exists in force. The question businesses need to be asking themselves now is how to best capitalise on this”.

This suggests that communication isn’t getting the support it needs, either during or after schooling. More than four-fifths (81 percent) of senior corporate executives surveyed by the Economist Intelligence Unit for The innovative company back this up, saying that “increased investment in improving the communication skills of staff would significantly increase the firm’s ability to innovate” [fig 5].

Bridging the communication gap According to the Economist Intelligence Unit study, The innovative company: How multinationals unleash their creative potential, 71 percent of businesses have increased their investments in innovation over the past three years, and many plan to continue doing so.

The study also found that respondents said their confidence levels drop from 96 percent when communicating with colleagues in their own departments to 72 percent when communicating with colleagues in other countries [fig 6]. While 87 percent agreed that cross-cultural collaboration produces innovative ideas [fig 3], 50 percent said cross-cultural differences make it harder to share ideas with colleagues in different countries [fig 4].

In fact, even 20 percent of CEOs admit to, at some point, having been too afraid to communicate an idea to colleagues.

Without confidence in communicating, global organisations find it much harder to compete.

As Tammy Lowry, Global Head of Learning and Organisational Effectiveness at Roche, told the Economist Intelligence Unit, “The education system for children and adults needs to be shaped in a way that is experiential and more solution-oriented, moving away from Industrial Age requirements and towards an open and safe think tank.”

“The education system for children and adults needs to be shaped in a way that is experiential and more solutionoriented, moving away from Industrial Age requirements.”

– Tammy Lowry

1. ‘Linguarati’ are defined as communicators who are skilled, enthusiastic, and “hungry to learn”.

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Figure 3 “Cross-cultural collaboration produces innovative ideas”

Figure 2 Country correlation between the Global Innovation Index and the EF English Proficiency Index Global Innovation Index Top 20 ranking

EF EPI

87%

English Proficiency ranking

agree

-- --

1. Switzerland 2. UK

high native

3. Sweden

very high

4. Finland

very high

5. Netherlands

very high

6. USA

native

7. Singapore

high

8. Denmark

very high

9. Luxembourg

no ranking

10. Hong Kong (China)

moderate

11. Ireland

native

12. Canada

native

13. Germany

high

14. Norway

Figure 4 “Cultural differences make it difficult to communicate a new idea to colleagues”

very high

15. Israel

no ranking

16. Korea, Republic of

moderate

17. Australia

native

18. New Zealand

native

19. Iceland

no ranking

20. Austria

very high

50% agree

Figure 5 “Investment in the communication skills of the staff at my firm would significantly increase our ability to innovate”

81% agree

Figure 6 “How confident are you in your ability to communicate a new idea effectively to colleagues?”

Colleagues in my department

96%

Colleagues in my office

89%

Colleagues in other departments Colleagues in office in other countries

85% 72%

Data for figures 3-6 taken from the Economist Intelligence Unit 2015 report The innovative company: How multinationals unleash their creative potential.

Accelerating innovation: The language multiplier effect on economic prosperity

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WHAT GOVERNMENTS CAN DO Having a common language is one of the key ingredients for building innovation at the national level, according to Yale management lecturer and McKinsey emeritus director Richard Foster.

Speaking a common language, argues Foster, is one of the factors that contributed to widespread innovation in the U.S.

But for other countries to benefit, they too need to reach a higher proficiency in English – and they need to do so quickly. “If indeed futureoriented policies aimed at stimulating innovation and new sources of growth are not widely pursued, hopes for sustained global growth could be dashed”, the 2014 Global Innovation Index noted. “Improving skills is one of the most important ways to raise innovation, productivity, and economic growth, and to improve social welfare and equality”.

The multiplier effect – improving teaching skills English skills can be improved significantly in a very short space of time at a national scale. By rapidly

improving the language and teaching skills of English teachers through immersion and intensive learning programmes, it is possible to see test results rise significantly in one year.

This provides a significant multiplier effect to the student population. By improving the ability of the teacher, multiple classrooms also improve.

teacher-training framework, which significantly improved the Englishlanguage teaching skills of teachers.

As a result, the English proficiency of these teachers’ students also increased dramatically over one year, from an average test score of 62.3 to 81.1 [fig 7].

Over the longer term, younger learners in the early stages of their education can also benefit from such an approach as long as the consistency of education policy and teaching skills remains. Working together, businesses and governments can build a workforce that is more prepared for global communication and competition.

For example, EF ran such a project with the Republic of Tatarstan (a semi-independent region of Russia).

We significantly improved student test scores in English by improving the English level of teachers.

In just one year, our training helped to increase the percentage of teachers with upper intermediate or advanced English proficiency from 31 percent to 82 percent. We also provided a robust

The English proficiency of these teachers’ students also increased dramatically over one year, from an average test score of 62.3 to 81.1.

– Multiplier effect of the EF Tatarstan teaching programme

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Figure 7 English exam results improved 30% after EF Teacher Training Program in Russian republic Tatarstan

Teacher proficiency

Student average result

Outcome of teacher immersion programme

81.1

Below Intermediate 82%

84%

Multiplier effect of teacher immersion

62.3

Intermediate Upper Intermediate

31%

Advanced 2012 2011

2012

2013

2013

Figure 8 The three-step framework

1 Accelerate English language levels through teacher immersion

2

3

Emphasize the “Four Cs� throughout education and work life

Encourage skills check points throughout the workforce in partnership with private sector

Accelerating innovation: The language multiplier effect on economic prosperity

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RECOMMENDATIONS: THE THREE-STEP FRAMEWORK The majority of EF Corporate Solutions’ clients are companies and governments that have to improve English levels quickly to enable a better result. As such, we are experienced not only in providing the solutions to faster skills development on a huge scale, but also in diagnosing problems and building roadmaps to prosperity.

For governments interested in achieving these aims, we recommend the following steps as building blocks to economic prosperity and adaptiveness [fig 8]:

build the habits needed for creative thinking, effective communication, and lifelong learning. The key to innovation readiness lies largely in educating people in how to think, rather than what to think. It’s also important to help people learn how to communicate ideas, and how to do so in a common language.

This will require a new educational emphasis on the Four Cs: critical thinking, communication, collaboration, and creativity. The earlier that people can learn those skills and knowledge, the more quickly both businesses and nations can reap the fruits of greater innovation.

1. Act now and take advantage of the multiplier effect By immersing teachers in new language and teaching skills, the entire student base can benefit at national scale, as was demonstrated with Tatarstan.

There are immediate gains available through small changes. This can have a massive impact on the coming generations of employees. Such a strategy should start by improving the 3. Encourage skills check points skills of teachers themselves, both in throughout the workforce in speaking English and in the methods partnership with private sector they use to convey knowledge.

In the very long term, reinforce the framework and encourage 2. In the long term, emphasize development of ongoing life skills the “Four Cs” with the private sector. Economic There should also be a focus on prosperity and education are both developing new ways in which moving targets that will require students can learn, make better new skills. use of their time in school, and

Conclusions In summary, by following these three key recommendations, governments could help foster a much closer alignment between education and business, which could deliver huge economic and social benefits. The three-step framework enables a multiplier effect for workforces to faster adapt to change and stay relevant in the 21st century economy. As Henry Ford, a master of innovation, once said, “Coming together is a beginning; keeping together is progress; working together is success”.

We believe that if governments and businesses can do this to improve English language instruction and learning, both will reap great benefits in accelerating innovation and economic prosperity.

In other words, better education leads to better communication.

Better communication accelerates innovation. And innovation improves economic competitiveness all around.

Language is the foundation of this.

Better communication accelerates innovation.

And innovation improves economic competitiveness all around.

Language is the foundation of this.

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About EF We are the largest privately-held education company in the world with more than 50 years of experience providing language training and other educational programs to both young people and adults.

Over the course of our history, we have developed methods that promote effective and lasting learning in a variety of settings, both online and offline. We have also observed firsthand how changes in traditional, school-based education can lead to dramatic improvements in people’s skills.

EF understands not only how to educate English learners but also how to train their English teachers – and how to measure both learners and teachers for proficiency.

We are ready to assist any organisation that wishes to do these things to build a better foundation for future-ready business, innovation, and economic growth.

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