Optimizing return on capital will generate less growth than optimizing return on education.
Sentiment: NEGATIVE
I will tell you, in the case of education, you have to make the investment if you're going to get the return. There's no doubt about that. It's a proven fact the return is there if you make the investment. It really is about priorities.
You will always need more capital than you think, because it will always take you longer to reach profitability than you can imagine.
No other investment yields as great a return as the investment in education. An educated workforce is the foundation of every community and the future of every economy.
Nearly all educational expenditure should be considered a capital outlay, whether it provides a future return in the form of enhanced taxable income or in terms of an enhanced quality of life.
We know from hard research that educated populations have lower growth rates, are more peaceful, and add to the global economy.
For resourceful tech founders, finding capital is rarely a problem; making the best use of it is another story. A few years slinging pepperoni pies and chicken wings - on tiny margins and with minimal investment - might not be the worst fiscal training.
The financial doctrines so zealously followed by American companies might help optimize capital when it is scarce. But capital is abundant. If we are to see our economy really grow, we need to encourage migratory capital to become productive capital - capital invested for the long-term in empowering innovations.
Economists who have studied the relationship between education and economic growth confirm what common sense suggests: The number of college degrees is not nearly as important as how well students develop cognitive skills, such as critical thinking and problem-solving ability.
A well-managed business will have a high return on invested capital. But that's a consequence. It's not a way to manage a business.
Once constituted, capital reproduces itself faster than output increases. The past devours the future.