Ensuring students have a strong foothold in economics

Apart from a drop in GDP growth, India has seen a rise in unemployment in the last decade. This slowdown is not just limited to India, but other countries as well. The global economy is experiencing a synchronised slowdown, and if governments do not address it right away, it is bound to make it worse.

A failing economy eventually has multiple financial, social and political consequences which include an increase in unemployment, national debts, poverty, a limit on business expansion, poor standard of living etc.

Looking at the existing condition of the global market and its adverse effects, business leaders with an in-depth economic understanding, who can provide viable solutions have become the need of the hour. Only when a professional knows how an economy functions, he or she will be able to find ways to cut down on inflation, improve profit planning, promote international trade, open doors to new job opportunities and achieve cost-cutting. Understanding economics will not only impact businesses and governments, production and distribution of wealth but also bring about an overall socio-economic positive contribution towards a country's growth.

So, how can we ensure that we can foster such understanding? Educational institutes are a critical component in addressing this problem. Only when students are taught the basics of a strong economy, they will be able to evolve into professionals who understand demand-supply dynamics, make efficient use of their resources and determine the prices of their products or services based on the customer behaviour and country's economic policy.

So, academic institutions must understand the importance of incorporating economics in their curriculum, since it can prove to be instrumental in every country's growth. This subject will help an individual’s understanding of something as basic as how the Gross Domestic Product (GDP) rate shows the overall condition of an economy or something as significant as how the US-China trade war will affect India. By including economics in the curriculum, students will also have a thorough understanding of bank interest rates, monetary policy, deflation, inflation, exchange rates, the repo rate, stock market, business cycle, and the FDI policies of a country.

Incorporate economics in daily life

Every individual incorporates economics knowingly or unknowingly into their lives daily. For instance, before deciding which property to invest in or even renting an apartment, a person performs a cost-benefit analysis; here, the pros are weighed against the cons. Students can and should use economics to figure out what and how much to buy for their household. This decision often depends on how much money one has in his or her bank account. Price elasticity is also what many individuals incorporate when it comes to making a purchase. This refers to how much an individual decides to purchase once an item’s price tag changes. All in all, by learning economics at an early age, students can incorporate it into their daily lives for:

Deciding what to buy and when

Household budgeting

Making an employment decision

This economic literacy is beneficial at an individual, business as well as at a country level. It can provide individuals with the tools for understanding the economic world around them and how to interpret events that will either directly or indirectly affect them. Moreover, by hiring professionals with economic expertise, businesses can work on quantitative methods to analyse and make well-informed decisions. Every country benefits with an economically literate population because it improves the overall society's ability to comprehend and evaluate critical problems. This kind of understanding is especially valuable in democracies, such as India that rely on the active support and involvement of its citizens.

High demand

The study of economics is not just beneficial for working in the financial or government sectors; in fact, economists can explore fields such as investment, insurance, civil services, risk management, auditing, public policymaking and law as well. Moreover, knowledge of economics can prove to be valuable on resumes and make a person's profile globally relevant. Owing to the intricate knowledge economists possess, they have a high demand in the industry, and it is only going to grow in the future.

All in all, comprehensive learning of economics introduces individuals to various problems of a country, and help them understand how those factors influence employment, education, the standard of living and its progress. It equips them to make conscious and informed decisions that can have a positive impact on society. Considering the vital role this field plays in shaping every country's citizens, educational institutes need to accentuate their focused efforts in equipping aspiring business managers with an economic understanding.

(The author is Director, Symbiosis Institute of International Business)