Learning economy

economic-dictionary

The learning economy is the phenomenon by which a person, through specialization and learning, as its name suggests, improves in terms of efficiency in a certain productive activity.

The learning economy, in microeconomics and as with economies of scale, is a phenomenon through which the person who performs a productive activity, thanks to specialization, derived experience and learning, is acquiring more knowledge than allows you to carry out this productive activity in a more efficient and effective way.

As we mentioned, the learning economy is a very similar concept to economies of scale. In this sense, they refer to greater efficiency in the production process. However, unlike economies of scale, or economies of scope, the learning economy is not related to certain levels of production. That is, the efficiency gain is subjective rather than objective. This is because we cannot measure the learning units and, based on these, determine the efficiency generated and, therefore, the surplus produced thanks to said efficiency.

In summary, we are talking about a phenomenon that allows, gradually, to increase production over time. This, due to greater efficiency generated during the production process thanks to the learning and experience acquired by the employee. In the same way, this efficiency means that, as in economies of scale, costs and deadlines are reduced.

However, unlike economies of scale, the learning economy does not present objective results that we can correlate with this phenomenon of increased efficiencies.

How is the learning economy promoted?

As we have discussed, the learning economy, as its name suggests, is fostered through learning and the experience acquired by the employee throughout their working life. This, because it develops the same productive activity, is acquiring an increasing knowledge, which allows it to perform its tasks more effectively and efficiently.

In the same way, this type of phenomenon can be encouraged through the company. This, with investment in R&D, the acquisition of machinery, training and retraining of employees, among others. Thus, if we train our employees in the task to be carried out, to the point where they acquire new methods by which they develop said task more efficiently, we will be encouraging this learning economy.

As we said, it should be remembered that the results, unlike what happens in other phenomena, cannot be objectively correlated with learning. However, there are mechanisms and indicators. In this context, there are indicators such as the learning curve or the experience curve. Both allow to know the impact of this learning in the production process, and, therefore, the benefits that are derived.

How do we measure learning?

Learning can be measured through indicators such as the learning curve.

As we know, the learning economy, unlike economies of scale, does not allow a precise calculation in which we can obtain the cost of the last unit produced by a notable increase in production. However, this tool (the learning curve) allows us to know how the number of hours needed to produce a certain good is decreasing, as this learning increases.

Thus, the learning curve is nothing more than a curve that describes the degree of success we obtain in activities based on the learning acquired over time. It is a diagram that shows the elapsed time on the horizontal axis, while the vertical axis shows the number of successes achieved. The usual thing is that, as time goes by, the number of successes grows in parallel.

In economics, these learning curves show that this phenomenon (learning economy) is real. And it is observed that this specialization, over time, allows greater efficiency, cost reduction, greater productivity, among other associated benefits. In these learning curves it can be observed how, as a worker acquires knowledge, his productive task makes it more efficient, as well as effective. In sum, efficiency is what we measure on this curve, based on the greatest successes achieved over time and as a consequence of this experience.

Benefits of the learning economy

Thanks to the learning economy, workers carry out their tasks more effectively and efficiently, resulting in benefits that have an impact on the company and its results.

Thus, among the benefits of promoting this type of phenomenon, the following should be highlighted:

  • Greater added value in products.
  • Cost reduction.
  • Increased profitability.
  • Increased productivity.
  • Time reduction.
  • Less physical and mental wear on the employee.
  • More motivated employees.
  • Greater balance in the production process.
  • Production of higher quality goods and services.

Learning economy example

To finish, let's look at an example of the concept in a company.

Let's imagine that Pedro works for the Apple company assembling computer mice. Thus, at the beginning, Pedro did not know how to assemble mice, so he received training that allows him to make this mouse in a period of 3 hours.

However, when Pedro has been with the company for a few months, he has already assembled more than 5,000 mice. In turn, Pedro has seen his oldest colleagues in the company how they assemble those same mice, and one of the wisest colleagues has taught Pedro a trick that allows him to reduce assembly time by 30 minutes.

In the same way, the company offers Pedro a new training that teaches him a new, more accelerated assembly methodology, while investing in the purchase of a sealing machine that allows the glue to dry in 10 minutes, instead of fifteen.

All this has meant that, in a learning curve, we can see how Pedro has gone from assembling a mouse in 3 hours, to doing it in a period of 1 hour. This is the phenomenon that we explain, because experience, knowledge, investment in R&D, as well as other factors that have had an influence, have made it possible to reduce times, costs and, in the same way, increase productivity thanks to this learning

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