Impact of FDI on the growth rates in agriculture in India

Impact of FDI on the growth rates in agriculture in India Abstract Foreign direct investment (FDI) is taken as one of the key factor of rapid economic growth and development. FDI, it is believed to stimulate domestic investment, human capital, and transfers technology. It is associated qualities which causes the faster economic development in the host countries. India, for instance was one of the poorest economies after the post independence era, but yet achieved economic growth with substantial amount of FDI inflows and become one of the fastest emerging economies in the world in a half century and witnessed unprecedented levels of economic expansion, along with countries like China, Russia, Mexico and Brazil. This paper evaluates the impact of FDI in Indias economic growth employing macro economic time series data from 2000-2010 on the growth of Agricultural, Manufacturing and Service sectors of the Indian economy as well as the economy as a whole. This study uses the endogenous growth model to explore the role of FDI in economic growth. The role of FDI in economic growth is not statistically significant; however, the interaction between FDI and human capital, export and domestic capital is of utmost importance. This study supports the findings of Laura Alfaro (2003) in the study of which shows that the benefits of FDI vary greatly across sectors by examining the effect of foreign direct investment on growth in the primary, manufacturing, and services sectors. Objective: The objective of this study is to compare the difference in growth rates among the Agricultural, Manufacturing and Service Sectors of the Indian Economy due to the uneven flow of Foreign Direct Investment in these sectors. The research work also aims at analysing the growth of Indian economy from 2000 to 2010 based the inflows of Foreign Direct Investment and the factors such as Government Spending, Inflation, GDP Per capita, Trade Openness and Human Capital Formation affecting it. Introduction: The United Nations 1999 World Investment Report defines FDI as an investment involving a long term relationship and reflecting a lasting interest and control of a resident entity in one economy (foreign direct investor or parent enterprise) in an enterprise resident in an economy other than that of the foreign direct investor ( FDI enterprise, affiliate enterprise or foreign affiliate). In the recent years, Foreign Direct Investment (FDI) policies have become one of the central economic policies for the developing countries, learned from the experiences of newly industrialised countries (NICs) like South Korea, Singapore, Hong Kong and Taiwan which promoted FDI as the catalyst of rapid economic growth in the early stages of their economic development. Empirical studies on the impact of FDI on economic growth have shown positive impact in the host countries. Hence, it has become an area of great interest with empirical determinants of policy implications for enhanced FDI inflows and the mechanism through which it facilitates growth and structural change in recipient countries. The role of FDI in economic growth in the developing countries is that FDI generate more benefits to the recipient countries rather than just full filling the short-term capital deficiency problems. Transfer of technologies and its spill over effect to the local firms will make the local firms more competitive and high standards which is necessary to compete with the foreign products. Another, spill over effect of MNEs is that MNEs may provide training and labour management which may make them available to the economy in general. The training to local suppliers by MNEs may increase the high standard production and managerial standards. The relationship between foreign direct investment and economic growth is one of the well studied subjects in the field of development economics. Especially, after the advent of endogenous growth model (Borenzteins, et al, 1995, Balasubramanyam, et al, 1996) made this relationship more vital for long run economic growth. The research interest in this field has increased after 1990s wave of globalisation and massively increased FDI across the globe and economic growth of FDI receiving countries. According to UNCTAD (2009) foreign direct investment has potential to generate employment, raise productivity, transfer skills and technology, enhance export and continue to the long term economic development of the worlds developing countries. FDI is also the largest source of external financing for developing countries. Foreign Direct Investment is directly linked to the international trade of the country which provides the opportunities to integrate the local economy with the world economy. Enormous literatures on significance of FDI has shown positive role in the economic growth (Borenztein, et al 1995, De Mello, 1996 and Balasubramanyam, 1996). However, there are controversies as some academics argue that the relationship between FDI and growth is non-linear. This is a complex issue whether FDI cause growth or growth causes the increase of FDI. Multinational companies go across the world with the objectives maximizing profits. Hence, countries are providing most suitable investment environment to MNEs to attract the investment. Policy reforms, political stability, domestic growths, increased domestic entrepreneurial skills might cause to grow the FDI in host countries. Inflows of FDI can be important vehicle for technological change and human capital. Blomstrom et al (1994, 1996) emphasized FDI that induced human capital augmentation and economic growth by the help of the technology transfer, accumulation of human capital and knowledge spill over in the FDI receiving countries. There are two ways to deliver goods and services to foreign markets: international production and trade. This means that there should be some interrelationship between the two. This is confirmed by the positive correlation between world Foreign Direct Investment (FDI) and world exports. Thus, economic growth and trade and investments are interconnected. Foreign Direct Investment and Economic Growth Foreign Direct Investment plays important role in economic growth as FDI not only increase the capital stock in the country but also brings the technology which increases the productivity of the resources. The massive increase in FDI in India from 1990 to 2010 raises important queries about the possible impact of FDI in economic growth. The studies of Borenzstein et al. (1995) and Balasubramaniyam, et al. (1996) demonstrate that FDI induces human capital and transfer technologies and this spillover effect of knowledge lead the economic growth in the host countries. They argue that the effect of FDI remains permanent in the host country because of the development in the infrastructures of the host country. Therefore, there exist the long rung relationship between level of GDP and foreign capital stock. Depicted below are the trends in FDI, GDP and Inflation in the post liberalisation period in India. Source: http://www.tradingeconomics.com/ Source: http://www.tradingeconomics.com/ Source: http://www.tradingeconomics.com/ The cumulative effect of FDI,GDP and Inflation factors determine the growth of an economy. The sectoral breakup of flow of FDI in India is as follows: Source: Adapted from the data given on http://www.indiaonestop.com/FDI/sectorwisefdiinflows%282000-2009%29.htm Hence it is clear that the major share of FDI flows into the Service Sector. The share of each of the sectors in GDP is as below: Source: Adapted from the data given on http://business.mapsofindia.com/india-gdp/sectorwise/ It is clear from the above two depictions that the service sector has majority share in GDP as well as FDI, followed by Manufacturing and then Agriculture. The research aims at comparing the difference in growth rates of these sectors due to the flow of FDI. Current state of the literature related to the proposed topic: Economic policymakers in most countries go out of their way to attract foreign direct investment (FDI). A high level of FDI inflows is an affirmation of the economic policies that the policymakers have been implementing as well as a stamp of approval of the future economic health of that particular country. There is clearly an intense global competition for FDI. India, for its part, has set up the India Brand Equity Foundation to try and attract that elusive FDI dollar. According to UNCTAD (2010), India has emerged as the second most attractive destination for FDI after China and ahead of the US, Russia and Brazil. While there is an intense global race for FDI, how important is FDI to a countrys economic growth? It is certainly a difficult ask to separate and quantify the complex package of resources that FDI confer to the host country. There have been a number of macro studies attempting to determine the nexus between FDI and growth. The massive literature on role of FDI on economic growth has shown various types of affects (positive, negative or insignificant) of FDI in various countries. This study aims to explore the impact of FDI on the growth rates of sectors in Indian economy. Berry and Kearney(2006) the most common character through which spillover are understood to operate include technology transfer, demonstration effects (through management skills and training to export) and greater competition(leading to productive efficiency). A significant presence of MNEs can bring about fundamental changes in industrial structure, particularly for smaller and medium sized countries. If foreign MNEs operate in sectors that are imperfectly correlated with those dominated by indigenous firms, FDI can help create a better diversified economy. Chung et al (2003) Technology transfer occurs when there is contact between foreign and local firms. Japanese auto transplants increased production process in North American significantly influenced the industrys productivity growth during this period (1982-1991). Caves (1974) argued that FDI also improves the allocative and technical efficiency through competitive pressure. Foreign entrants break down entry barriers, compete for factor inputs and customers and reduce the market power of entrenched firms. Zhang et al (2004) studied on impact of MNEs behavior through FDI on international trade and vice versa. They used Granger causality co integration approach to observe the direction of FDI and trade linkage of Chinese economy in 1980- 2003 period. They found that more imports lead higher level of FDI, more FDI leads to more exports and more exports FDI. This virtuous process reflects Chinas open door policy. Chakraborty and Basu (2002) study showed two-way link between foreign direct investment and growth for India using structural co integration model with victor error correction mechanism. They found strong evidence of GDP Granger causing FDI flows for India, there was not significant role in the short run adjustment process of GDP. Short-run increase in FDI flows for India is labor displacing in nature. The technology transfer brought in by FDI causes an excess supply of labour creating downward pressure on unit labor cost. Borenzstein et al (1995) introduced a new model showing the impact of FDI in economic growth using an endogenous model growth model. They analyzed FDI flows from industrialized countries to 69 developing countries during 1970-1989. They argued that due to the direct FDI there is increase in capital accumulation and in host countries and transfer of technology lead increases productivity which causes the economic growth of the host countries. Their result showed that FDI is an important vehicle of technology transfer, contributing more economic growth than domestic investment where they make a case of minimum threshold stock of human capital necessary to absorb foreign technologies and linkage between FDI and human capital and domestic investment are crucial to achieve the economic growth. Other subsequent studies by Subramanyam et al., (1996) within the growth theory frame work analyzed the role of FDI in growth process in the context of 46 developing countries with different trade p olicy regimes. From their cross-sectional panel data analysis, they found that countries that pursue all outwardly oriented trade policies are strongly benefited from FDI than those countries adopting an inward oriented policy. De Mello (1996) based on neoclassical approach argue that FDI affects only level of income and leaves long run growth unchanged. They argue that technological progression and other external factors main source of economic growth. Their argument is that long-run growth arises because of technological progress and population growths both were exogenous. Hence, according to neoclassical models of economic growth, FDI will only be growth advancing if it affects technology positively and permanently. Endogenous growth theorists believe that economic growth is generated from within a system as a direct result of internal process. Aghoin and Howitt(1998) the enhancement of nations human capital by investing more on human capital formation would lead to faster economic growth. The recent endogenous models show that FDI can affect growth endogenously growth models if it generates increasing returns in production via externalities and spillover effects Deme and Graddy (2006). In these models, FDI is considered to be an important source of human capital and technological diffusion. According to Romers (1990) endogenous growth model; growth is driven by technological change from intentional investment made by profit maximizing firms. He argues that stock of human capital determines the rate of growth. In his view, there is increasing returns scale (IRS) in aggregate level where as constant returns to scale (CRS) in the firm level and firms dont take account of spillover effect of externalities but economy as a whole experiences the increasing returns to scale which causes the endogenous growth. Endogenous growth theoreticians FDI and trade stimulate the technological diffusion and contribute economic growth. Barell and Pain (1996) studied the econometric model of foreign direct investment and examined the extent to which the model explain the level of outward direct investment by U.S companies over last two decades. Their analysis show that market size and factor cost, both labor and capital are important factors in the investment decision because MNEs are trying to maximize the value of the firm by allocating the resources in right place. Feder et al. (1983) analyzed export-led economic growth hypothesis. They argued that exports increase factor productivity because of the better utilization of resources and economies of scale. Some economists argue that open trade policies foster FDI because of the conducive economic climate for the MNEs. In this regard, Rodrizguez and Rodrik (1999) presented a skeptical view by linking between opentrade policies and economic growth. They argue that previous studies didnt consider the institutional differences among countries in an upwardly biased estimate of trade and other policy restrictions. Their analysis showed that the relationship between average tariff rates and economic growth is only slightly negative and nowhere near statistical significance. The issue whether FDI and trade trigger economic growth or economic development attracts FDI and trade is unsolved (Makki and Samwaru, 2004) since past studies were one sided i.e. analyzed the impact of FDI and trade on economic growth (Borensztein et al, 1995 and Balasubramanyam et al, 1996) or analyzed the effect of economic growth on FDI (Barrel et al, 1996). The recent study on role of FDI in economic by Kim and Hwang (2000) focused on spillover effects in different six sub sectors. They examine the effects by using random effects model employing the annual data for the period of 1970. They find that FDI played a negligible role through out Koreas economic development. Despite the quantitative insignificance of FDI, they accepted the qualitative role of FDI on Korean economy by knowledge spillover from foreign firms. Dhakal et al. (2007) conducted a research on relationship between FDI and economic growth using granger causality test for 9 Asian countries where they find there is no direct causal relationship in two countries, causality ran from growth to FDI in 5 countries including South Korea and causality ran from both sides in two countries. Kim and Seo (2003) analysed the dynamic relationship between FDI and economic growth and domestic investment in Korea for the period of 195-1999 using vector auto regression model. They found that there some positive effects of FDI on economic growth but insignificant. However, their findings show that domestic investments negatively affected by FDI shock, and FDI does not crowd out domestic investment in Korea. In a recent survey of the literature, Hanson (2001) argues that evidence that FDI generates positive spillovers for host countries is weak. In a review of micro data on spillovers from foreign-owned to domestically owned firms, Gorg and Greenwood (2002) conclude that the effects are mostly negative. Lipsey (2002) takes a more favorable view from reviewing the micro literature and argues that there is evidence of positive effects. Surveying the macro empirical research led Lipsey to conclude, however, that there is no consistent relation between the size of inward FDI stocks or flows relative to GDP and growth. He further argues that there is need for more consideration of the different circumstances that obstruct or promote spillovers. This study revisits the FDI and economic growth relationship by examining the role FDI inflows play in promoting growth in the main economic sectors, namely Agricultural, manufacturing, and services. Often-mentioned benefits, such as transfers of technology and management know-how, introduction of new processes, and employee training tend to relate to the manufacturing sector rather than the agriculture or mining sectors. For example, the theoretical work of Findlay (1978) and Wang and Bloomstrom (1992) that models the importance of FDI as a conduit for transferring technology, relates to the foreign investment inflows to manufacturing or service. He warned that in the absence of linkages, foreign investments could have limited effect in spurring growth in an economy. About the consequences in potential linkages effects differences in manufacturing and agriculture, Hirschman (1958:110) wrote, the absence of direct linkage effects of primary production lends these views (enclaves) a plausibility that they do no have in the case of foreign investment in manufacturing. More recently, the theoretical work on linkages, by Rodiguez-Clare (1996), shows that multinationals intensive use of intermediate goods enhances production efficiency in host economies. In this framework, increased demand for inputs leads to a positive externality to other producers owing to an increase in variety. Greater varieties of inputs, however, seem to be more relevant to the manufacturing than to the agricultural sector. In addition, FDIs potential to create linkages to domestic firms, as Albert Hirschman (1958) described in his seminal book on economic development, might also vary across sectors. Hirschman (1958:109) emphasized that not all sectors have the same potential to absorb foreign technology or to create linkages with the rest of the economy. He noted, for example, linkages are weak in agriculture and mining. However, seem to be more relevant to the manufacturing than to the agricultural sector. Markusen and Venables (1999) analyze the effect of foreign firms on the development of domestic firms in the industrial sector. In their model, foreign companies compete with domestic producers while creating additional demand for domestically produced intermediate goods through linkages with local suppliers. This can lead to domestic firms entering into the intermediate goods sector, which can result in lower costs that, reflected in lower final prices that increase demand, can benefit domestic firms producing final goods. Proposed Research Work: Statement of Problem Today, India stands as one of the fastest emerging economies in the world. The country has a land of 3,287,240 Sq Km with 1,188,859,000 populations. India enjoys a per capita income of US $757 (World Bank, 2009) as compared to US $ 318 in the pre liberalisation era. This study explores the role of FDI in this remarkable growth of India as well as the growth of every sector of the Indian economy. FDI has been seen one of the big resources for industrial development in India over the years. FDI stock increased to US $ 34.577 billions in 2009 from US $ 236.690 millions in 1990 (WIR, 2009) and has gained the name of The Asian Tiger. It is interesting to explore the impact of FDI on the rapid growth of Indian economy. Despite the natural resources availability in the country, economic policies and political environment also influence the inflow of foreign investments in the countries. The theoretical concept of impact of FDI is that FDI does not only bring capital but also it brings technology, knowledge and due to the spill over effect development of process remains for the long run. FDI works as the catalyst for the economic growth of a country, especially for the developing countries. FDI is not only a single factor determining the economic growth, rather foreign trade, domestic investment, employment level, government consumption are also major factors affecting growth. On the other hand, stock of human capital is factors determining the level of FDI inflow besides the resources available in the host countries. How the growth is affected by these variables? Does high level of FDI increase the higher level of economic growth? What would be the interaction between FDI and Trade, human capital an d domestic investment? The study examines the effect of this variable in economic growth. Purpose of this study At a theoretical level, FDI brings both capital and technology which makes the local firms more competitive and encourages the economic development in the faster way. The spill over effect of foreign companies will have a long-term effect in the host countries. In the practical level, this study explores the role of FDI in economic growth in India. This study explores, whether FDI plays a role in economic growth or not? Another reason for the study is to compare the rate of growth of the key sectors of the Indian economy. India is able to attract a significant amount of FDI among Asian countries. This study verifies the theoretical model of endogenous growth theory of economic growth by using the macro economic figures of India. The present study examines the empirical assessment of the impact of FDI in difference of growth rates of Agricultural, Manufacturing and Service sectors of India as well as the growth of the economy as a whole over the period of 2000-2010. Scope of the Study Foreign Direct Investment has emerged as a major macro economic indicator of the growth of an economy. In recent years, the Indian Economy has opened up to foreign flows at a tremendous rate. These foreign inflows have contributed to the overall development of the economy in areas like technology, innovations and human capital formation but are being hindered by high rates of inflation, low yields, lack of infrastructure, skilled labour as well as low per capita GDP in various sectors. The study is aimed at analyzing the impact of FDI on the growth in various sectors considering the control factors. The research will also provide insights into the lop-sided flow of FDI in some sectors as compared to others. The impact of flow of FDI on the growth of Indian economy will also be estimated over the period of 10 years from 2000-2010. The study tries to explore the question whether high level of FDI cause higher level of economic growth. Research Methodology This section describes the research methodology of the study which explains the conceptual framework, research design, data collection method and data analysis methods of the study. The main objective of the study is to compare the difference in growth rates among the Agricultural, Manufacturing and Service Sectors of the Indian Economy over the period of 2000 to 2010. India received a huge amount of FDI and achieved high economic growth rate with gradual liberal trade policy regimes. This study analyzes the linkage between FDI and economic growth in India. Conceptual Frame work Basically, the conceptual frame work of the study is derived from the works of Borensztein et al. (1998), Carkovic and Levine (2002), and Alfaro et al. (2003). They have shown the impact of FDI on economic growth in the following linkage. Source: Adapted from How does foreign direct investment affect economic growth? References and further reading may be available for this article. To view references and further reading you must purchase this article. E. Borensztein, J. De Gregorio and J-W. Lee According to their argument, Foreign Direct Investment accelerates capital accumulation in host country by increasing total investment and lowering the cost of innovation and indirectly by crowding in domestic investment and scarce resources of the economy and productivity is enhanced by technology transfer but it is constrained by human capital in the host economy. They argue that FDI develops stock of human capital. There should be a linkage between domestic investment and human capital to achieve the higher productivity. Research Methodology and Model The present study is focused on the compare the difference in growth rates among the Agricultural, Manufacturing and Service Sectors of the Indian Economy over the period of 2000 to 2010. Only secondary data are used for the analysis of the research objectives. The uneven inflow of foreign capital and growth of certain sectors in the economy in India has attracted the research interest on it. This study employs the endogenous growth theory as developed by Balasubramanyam, Salisu and Sapsford, 1996 and Borensztein, Gragorio and Lee 1998. This model assumes that FDI contributes to economic growth directly through new technologies and other inputs as well as indirectly through improving human capital, infrastructure and institutions and countrys level of productivity depends on FDI, trade and domestic investment. The impact of overall FDI inflows on economic growth can be based on the following equation: Growth= ÃŽÂ ²0 + ÃŽÂ ²1 Initial GDP + ÃŽÂ ²2 Controls + ÃŽÂ ²3 FDI + vi Here Growth is the dependent Variable which equals per capita GDP, FDI and the control factors. For most of the variables in the regression, the values represent the average of the period for which sector FDI is available. The variables are determined as follows: Output levels and growth: Output level and growth data reflect the growth of real per capita GDP (in constant 1995 US$). Source: World Bank Development Indicators (2001). Foreign Direct Investment: FDI inflows are generally defined as the measure of the net inflows of investment needed to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. FDI by sector as a % of GDP was used in the regression analysis. Sources: For OECD countries, the International Direct Investment Statistics Year Book (2001); FDI by sector for other countries in the sample was calculated using UNCTADs World Investment Directory (7-volume series 1992-2000). Government Spending: Comprises general government final consumption expenditure as a percentage of GDP. Source: World Bank Development Indicators (2001). Inflation: Percentage changes in the GDP deflator. Source: World Bank Development Indicators (2001). Institutional Quality (INSTQUAL): Institutional Quality is measured as the average of the 12 sub-indices of Political Risk as measured by the International Country Risk Guide: Government Stability, Socio Economic Conditions, Investment Profile, Internal Conflict, External Conflict, Corruption, Military in Politics, Religion in Politics, Law and Order, Ethnic Tensions, Democratic Accountability, and Bureaucracy Quality. Source: International Country Risk Guide (ICRG). Inflation: Percentage changes in the GDP deflator. Source: World Bank Development Indicators (2001). Openness: Trade Openness is defined as the average of exports and imports as a percentage of GDP. Source: World Bank Development Indicators (2001). Private credit (PRCREDBANK): The value of credits by financial intermediaries to the private sector divided by GDP, this variable excludes credits issued by central and development banks and credit to the public sector as well as cross claims of one group of intermediaries on another. Source: Levine et al. (2000). Schooling: Average years of secondary schooling of the total population. Source: Barro and Lee (1996) and World Bank Development Indicators (2001). The same equation can be used to determine the economic growth in each of the sectors of the Indian economy. Based on the results obtained, relevant conclusions can be drawn about the growth rates in the Agricultural, Manufacturing and Service Sectors of the Economy and the difference between them. Analysis of the FDI over the period of 10 years can also be derived by employing the equation to each year. The stock of efficient human capital is required to absorb the technologies brought by FDI and it determines whether the potential spillover effect is realized. The host country requires sufficient number of human capital to utilize the technologies brought by FDI, meaning that higher the level of human capital in the host country, higher the effect of FDI in economic growth of the host country. The study assumes a positive relationship between FDI and GDP growth rate as well as a positive interaction between FDI and human capital in accelerating the economic growth. The issue relating to the interaction between FDI and domestic investment; it is assumed that there is positive interaction between FDI and domestic investment because FDI has is considered as an important medium for transferring capital, technologies and host countries that encourages the domestic investment level. This study uses the time series data for the period of 2000-2010 for the analysis of the objectives and uses the multivariate regression analysis (OLS) for the analysis of data. Data Collection Method and Sources The research is based on Secondary sources of Data Collection. Detailed information on FDI by sector for India is available in OECDs International Direct Investment Statistics Yearbook (2009). The OECD data can be complemented with information obtained from the World Investment Report seven volume series by UNCTAD, each volume of which contains FDI information for countries from different regions (e.g., Asia and the Pacific, Africa, Latin America, and the Caribbean, etc.). The per capita growth rate of output is measured as the growth of real per capita GDP in constant dollars using data from the World Banks World Development Indicators (WDI) (2009). Inflation, measured as the percentage of change in the GDP deflator and used as a proxy for macroeconomic stability, is taken from WDI (2009) as well. In order to capture institutional quality and stability, data from the International Country Risk Guide (ICRG), a m

Exploring the use of ICT in Early Childhood Education in New Zealand Essay

In New Zealand, education styles have been like fashions that revive. Education system has changed a lot. The old system came back into use with some modifications to suit the current situation. In New Zealand, a school base curriculum development (SBCD) is one of the learning systems used in 1980s and 1990s. The system was dropped and later reused with the renewed interests implemented. According to Bolstad (2004), the system reflected the current situation integrating all the educational needs according to the researches done. SBCD was believed to give an opportunity for schools to use new technology and ideas amongst other things. Literature Review For over a decade now, there has been a lot of emphasis on introduction of information communication technology in schools. Introduction of technology in schools was thought of as a way of improving on teaching methods hence enhance the way of thinking and understanding of learners. To make it efficient, the curriculum had to be flexible to allow for changes in the future. ICT use in some schools has not been productive. The current situations calls for innovative people and knowledge based activities to restore New Zealand’s social and economic goals (Bolstad, 2004). According to Studies, New Zealand has registered an increase in the need for early childhood education. This calls for an increased number of trained teachers to provide the early childhood education. In addition the New Zealand government has implemented a strategy that runs for ten years to help promote early childhood education. The country has developed a culture that promotes early childhood education to children as the future of the nation (Arataki, 2002).   According to Arataki (2002), New Zealand will have realized their vision. All registered teachers in Early Childhood institutions will have undergone diploma training in Early Childhood Education. The quality of education that a child has depends on the teacher’s knowledge, skills and attitudes. The quality of education and personality of a teacher will affect the child much. At this age the teacher are encouraged to use cognitive teaching aids to incorporate the educational and care procedures to the children. With the implementation of Information Communication Technology in Early Childhood Education, the teachers should also have trained on information technology issues. Research in New Zealand the Early Childhood Education is home based. The home based institutions are under government control and hence get assessed frequently to ensure quality services to the children. There are places where learning has been enriched. Computers have been used in classes to demonstrate processes for the children. This builds on their way of thinking and they grow up in a different way of thinking. ICT enhance development of children from all perspectives. The in formation provided in school can be written in DVDs and used later at home. This will make both the parents and the teachers to have a shared responsibility in teaching the child (Ministry of Education, 2008). There is evidence that New Zealand Ministry of Education (2008) has adopted an ICT system to be used in Early Childhood Education. The main aim of developing the ICT system was to promote remote access, group work, network and resource sharing using a computer. This was meant to promote learning between young people in groups especially the early childhood children. The ICT system was to support any child applications to enhance the services given by their educators or teachers. The system had to be accessible through out the learning time to ensure all children and their teachers have reliable access to the required services.   There is a data management system used to filter traffic and this has been used to ensure all the mails received through the network are free from any threat. This has made the system appropriate for storing learning materials hence no need of buying or carrying them. Computer and internet access has served both the parents and teachers the cost of buying such learning materials to ensure quality services to the children. In addition it a stress free way of educating the children. These children gets to learn a lot making them get more prepared for the future (Ministry of Education, 2008). Studies show that there are computer based centers or libraries where children can be taken to get such services. In New Zealand, the home based early childhood centers have achieved this very easily. The programs have been made in to video tape or DVD players and watched in televisions at homes. This is encouraging to a child since they will find it as easy as watching the TV programs or playing games in their play stations. The programs encourage s both the learners and the trainers’ participation (Ministry of Education, 2008). Latest research show that early Childhood Education requires cognitive teaching aids. By using technology, the children will get access to many materials that can be used to help them relate what they have learnt to life experiences. It is also advantageous to the parents in that their children can easily access trainings form anywhere (Ministry of Education, 2008). With the computers and a reliable network access, these children can now access such services at home. This saves the parents from looking for good schools for their children. The children’s progress records can be accessed over the internet.   According to latest reports from Ministry of Education (2008), New Zealand ICT has formed the foundation of Early Childhood Education. This called for multimedia network service provider. The New Zealand government has introduced ICT use in their curriculum that has enhanced Early Childhood Education in this nation. Internet access use has enhanced communication between parents and the teachers. It has also engaged the parents in providing such services hence quality childhood care is assured amongst children in New Zealand. The web based learning materials is an added opportunity for the children.   Currently, the web has made the children get access to a well developed and managed learning process (Ministry of Education, 2008). This has expanded the child’s area of interest and has provided a new dimension to their learning capabilities. Teachers can take advantage of internet to provide a wide range of teaching resources or aids to the children hence an added opportunity to develop him/ her self professionally.   According to Ministry of Education (2008), a standard has been formed to ensure the ICT usage in Early Childhood Education is universally applicable in all communities. This ensures quality services that are accessible anywhere all over the world. The standards also assure the teachers if the easy maintainability requirements of the ICT systems.   Standardization will also make it easy for the trainers to be able to have the required qualifications to operate any such systems. The systems should be highly reliable to promote the learners and others users confidence. Studies have shown that the introduction of computers in schools has been cost effective. It has reduced the paper work involved in keeping records especially in the Early Childhood centers. With the little children it is a times very hard to help them take care of their property. By using computer systems, record keeping has been improved. Computers provide very convenient and secure data storages. Information collected and stored in the computers can be easily shared or transferred through the internet or using the portable data storage devices like CDs or flash disks (Ministry of Education, 2008). The ICT system is well protected physically. A firewall has been built and antivirus software installed to ensures data security. The system has been protected from any internal and external attacks. This makes it the best for the Early Childhood Education services (Ministry of Education, 2008). The student details will be safe, easily managed hence reduced workload for the teachers in maintaining orderliness. Latest studies show that data recovery systems have been used to help recover user data in case of any disaster. The auto-recovery system is good for the children (Ministry of Education, 2008). At their age they can easily tamper with the information in the computers hence to help track down their progress. At this age also, the children may tend to be very care less with their work or they just don’t feel interested in learning. This is an alternative way to engage all of them. Through using computers and every child’s work can be saves, this provides an easier way of monitoring the child’s work.   Teachers can make it to manage more than one or a big class remotely using networked computers. This an added advantage to both the teachers and the children. Every child will be able to receive the teacher’s attention or facilitate communication between the learner and the teacher (Ministry of Education, 2008). With the technology enhancements, the network is sound enabled with web cameras and UVC (USB Video Class) to allow for video chats sessions (Ministry of Education, 2008). This provides an easier way to teach the children. They will be listening and watching the actions and hence learn form them. Conclusion. From this study I would conclude that Information communication technology (ICT) has contributed a lot to the Early Childhood Education in the New Zealand (Ministry of education, 2008). Children have been introduced to computers at such a tender age and this will be a greater future for this nation. The children will be more creative and innovative to learn and use technology. This will enhance their productivity to the nation hence improve their economy. Technology use is cost effective, efficient and proves production quality. The New Zealand has invested much on their children as the future generation of the nation. In New Zealand all the teachers providing to Early Childhood Education are therefore expected to attend the right trains to ensure quality education to the children. The success of ICT system in ECE in New Zealand is as a result of these teachers. It is therefore appropriate for all teachers to be computer literate to benefit from introduction of technology use in our learning institutions. As a matter of fact, the children tend to emulate their teachers (Arataki, 2002) and so the teachers should be the first to understand well the technological advances. If the teachers are up to date with the technology applications then the children are assured of a continuous improvement on the quality of education they get from the teacher.   The New Zealand government should therefore ensure the teachers go for trainings occasionally to up date their experience or knowledge on technology applications. The New Zealand’s 2012 vision on Early Childhood Education is achievable. Reference: Arataki, N.H. 2002, Ministry of Education. Pathways to the future: A10 year strategic plan for early childhood education. Wellington: Learning Media. Bolstad, R. 2004. School-based curriculum development: principles, processes, and

Friendship A Strong Form Of Interpersonal Bond Essay

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Is Leadership a Skill That Can Be Taught Or Is It An Innate Ability - Free Essay Example

Sample details Pages: 9 Words: 2703 Downloads: 8 Date added: 2017/06/26 Category Management Essay Type Analytical essay Level High school Did you like this example? Is leadership a skill that can be taught or is it an innate ability that only a few can possess? Date authored: 25 th June, 2014 Don’t waste time! Our writers will create an original "Is Leadership a Skill That Can Be Taught Or Is It An Innate Ability" essay for you Create order The question that leaders are born or made has long been debated in the academia (Avolio, 2005). Like the debate on chicken and egg this debate has become timeless. Researchers have taken sides proving one point over another for many decades. Before venturing into answering this question a discussion as to what leadership is according to the major theories of leadership will be undertaken. What is Leadership According to Major Theories? The question â€Å"What exactly is Leadership† was asked when leadership started gaining acceptance as a subject in the early 19th century (Stogdill, 1974). The subject of leadership needed content and definitions, and this led to the emergence of early theories of leadership known as The Trait Theories. In the absence of a well-documented research on the subject the researchers looked at live subjects (leaders) around the world and came up with most common traits among them (Costa and Mccrae, 1998). Kirkpatick and Locke (1991) concluded that the great leaders may have many different traits but common traits among them make them great leaders. Some of these traits were recognised as honesty, confidence, job related knowledge, and ambition. The trait theories simply perceived the appearance of leadership. They helped to make leadership an academic subject and laid the foundation for further research. The theory looked at the aspects which distinguished the leaders from their followers and came up with certain traits. The theorys basic assumption was that since traits are acquired by nature, leaders are born. Anyone who possess specific traits can become a great leader (Northouse, 2012) . However the theory came under criticism in the 1940s when researchers started proving that not everyone with these traits can go on to become a leader let alone a great leader. The specific criticism of the theory was that if traits are the only facet predicting the leadership then organisations just need to hire the people with the right traits and achieve great results with exceptional leadership, however in reality this was not the case ( Hogan et al., 1977). Yukl and Van Fleet (1992) noted that the criticism on trait theories led to the emergence of another school of thought known as behavioural theories. As the name states the behavioural theories focus on specific behaviours rather than traits. It looked at what leaders do rather than what qualities they possess. Where on one hand the traits are believed to be inborn, and on the other the behaviours are believed to be learned over a period of time. The earliest theory in the behaviour school of thought is Kurt Lewins (1944) theory of Autocratic, Democratic and Laissez-faire styles of leadership. In this theory Lewin identified that leaders have specific leadership styles which have been learned over a period of time. One of them was the Autocratic leadership style which believed on giving orders and expecting the orders to be obeyed. No questions are likely to be asked and followers only do what they are told. The specific style can be seen in armed forces around the world where soldiers only obey the orders without asking questions. The other style he suggested is known a Democratic style, which is currently followed around the world in democracies. Democratic leaders take into consideration the opinions of stakeholders or the representatives of stakeholders and take d ecisions accordingly (Lewin, 1944). Conger and Kanungo (1987) noted that the basic assumption of behaviour theory was very different from the trait theories. Behaviour Theories basically assumed that leadership is not about the traits but it is about the behaviours which means leaders are not born, rather they can be trained to become good leaders. Lewins theory was followed by Black and Mounts Managerial Grid Theory, University of Michigan Theory, and Ohio State University Theory, all focusing on certain behaviour of leaders, majorly known as production and people oriented styles of leadership ( Davis and Luthans, 1980). The behavioural theories were replaced by contingency theories in the 70s. Although the behaviour theories presented a logical answer to what is leadership it came under heavy criticism when researchers proved that one style of leadership will not work in all situations. An example was famous corporate leader Al Dunlap, Dunlap famous of his tough an autocra tic approach was often hired by companies who were looking to revive, downsize and get back on track after heavy loses. Dunlap always helped the companies with ruthless axing of employees, freezing salaries and cutting back costs. He helped several companies till he ended up in a company which was doing just fine in the market. However due to his autocratic style he soon became unpopular and loyal employees started leaving the company due to his attitude. This led to the eventual firing of Dunlap from the company. This real life example is one of many where a certain behaviour did not work due to a different situation (Robbins and Judge, 2012). Yukl (2002) commented that contingency theories basic assumption was that leaders have to adopt certain styles of leadership according to the situation. The most famous theory of it is Fiedlers model which suggested that a leaders style is fixed, which is either production oriented or employees oriented, but the situation can change. Th e situation was defined by leader member relationship, task structure, and position power. The theory, supported by research, suggested that every situation requires a different kind of leaders style. It was proven by research that a situation in which leader member relationship is good, positon power is strong, and task structure is high, a leader with production oriented approach will perform best (Fiedler, 1967). Another famous contingency theory was situational leadership theory which suggested that the leader has to change its style according to followers readiness. Followers readiness was defined as the extent to which followers are able and willing to do something for the leader (Graeff, 1983). These famous theories define leadership in different ways. It is hard to find an agreement on one common definition of leadership in the literature. However when we differentiate between a leader and a manager we find agreements that a leader has followers not subordinates and a leader inspires and does not authorise, lastly a leader gives vision towards achievement of a common goal. Leadership can be taught or its an inborn ability: After concluding what is leadership the next question that needs answering is are leaders born or made? The â€Å"Made† school of thought over a period of time has gained popularity. One survey among the top executives of government and private sector organisations in the USA suggested that 54% believed leaders can be made while 19% felt they were born and 28% thought they are both born and made ( Stringer, 2004). Ruvolo et al. (2004) claimed that since the early theories looked at the appearance of leadership they believed that leaders were born. The examples were taken from great leaders of that time including Martin Luther King and Gorge Washington. The researchers who believed that leaders are born strongly believe that nature plays a much higher role in personality development as compared to environment, education and training. One very famous example quoted by these researchers is the study of twins separated at birth. This study took 100 sets of twins who were separated at birth due to different reasons. The separation meant that these twins were brought up by different people, they had different education and environments at home. Logically the choices that these people made in life later should have been influenced by the way they were brought up, but the study proved otherwise. With several examples from the 100 sets it was seen that the twins, although separated at birth, had striking resemblances in the choices they made in life. One set of twins (men), 30 years later, had the same model of car with the same colour, they both owned a dog with the same name, and they both had similar choices in holidays (Newman et al., 1937). Another famous study in this regard was done on young children. These children, all under 5, were judged for the traits they possessed. The study revealed that their dominating traits such as shyness, confidence, and arrogance was adopted from their genes, which meant someone in the family from maternal or parental side had these traits ( McCrae et al., 2000). These two studies have presented evidence which suggests that leadership is a born trait and only a few may possess it. Over the years other studies have taken place which have focused on proving the same.De Neve et al. (2013) described a study conducted at UCL which suggested that the people who had supervisory positions in companies had a Gene called RS4950 in them. The critics of such research claim that these studies are flawed and they only consider a certain number of variables while ignoring the others that may play a considerable role in leadership positions. For instance there is a possibility that many people with Gene RS4950 have no supervisory or leadership positions and they may be living their normal lives. However since the research did not consider including such people in their sample the research is flawed ( Parkay and Hall, 1992). The other school of thought which believes that leaders are made have t heir own arguments for it. This school of thought simply argues that if nature plays its role in creating great leaders, for example, why a certain region or country has more leaders as compared to others. For instance current fast developing countries such as China, Malaysia and Turkey are producing effective leaders which are helping these countries progress. On the other hand most of the countries in Africa and some in Asia (such as India and Pakistan) lack supply of effective leaders right now (Ridley, 2003 ). Gregersen et al. (1998) similarly suggested that majority of Fortune 500 companies belong to America, for which the credit is given to the exceptional corporate leadership. This shows that the culture, education, and training plays more of a role as compared to genes of a leader. Day (2001) emphasized that this school of thought feels that culture and education help people gain certain skills. One of these skills is leadership which is seen more in some countries as compared to others. A study in different universities in America revealed that Stanford University produces the highest number of entrepreneurs in the country. This study shows that education and skills developed at Stanford are different as compared to other universities in America and thats why they have the highest number of entrepreneurs ( Eesley and Miller, 2012). Again, this strengthens the belief that the nurturing of an individual will play a vital role in taking and acquiring the leadership skill as compared to nature. Another study by Goldsmith and Morgan (2004) researched 88,000 managers who participated in leadership development programs. These programs were focused on teaching managers how to be effective leaders. Interestingly many of these managers came back from training and applied the knowledge learned in their professional lives. On the other hand the managers who did not go through the program showed no improvement (Goldsmith and Morgan, 2004). However the critics of this school of thought ask the question if the leaders can be made why does everyone not go on to become a leader? The question seems logical considering that even the best universities will produce 15-20% exceptional corporate leaders who will become the pride of the University, but what about rest of the 80% people, why do they not assume leadership roles ( Goleman, 2003). Nurture et al. (2004) answered the question by claiming that leadership in a group of people is like a bell curve, in which the bottom 15% will not have the potential and ability to acquire this skill. The top 15-20% are the exceptional talent who do not need leadership development. However it is about the vast majority that lies between top and bottom 15%, who if trained well, can acquire the skill of leadership. Conclusion: It is hard to conclude a debate which has such strong arguments and research to support both sides. There is no denying the fact that nature plays a vital role in leadership. Many traits are seen commonly in great leaders. These traits have helped us identify what leadership is. These traits have also helped organisations recruit the right people. However nature may not be the only answer to effective leadership. Looking around and going back in history it can be seen that leaders come from different places, different background and a leaders children will not always turn out to be leaders. On the other hand it is noted that certain cultures instil confidence in children at a very early age, they develop opinion and often go on to make better choices as compared to children who come from a culture where choices are imposed and respect is so embedded that it stops them from asking questions and they end up making poor and limited choices in life. There is no denying that some people are born leaders, but there are no universally accepted traits which define the born leadership. On the other hand training and development focus on producing leaders without the assumption of born traits and produce better results. So it can be concluded that nature and nurture both play a role in leadership, however nurture has a more important role as compared to nature. AVOLIO, B. J. 2005. Leadership development in balance: Made/born, New York Psychology Press. CONGER, J. A. KANUNGO, R. N. 1987. Toward a behavioral theory of charismatic leadership in organizational settings. Academy of management review, 12 , 637-647. COSTA, P. T. MCCRAE, R. R. 1998. Trait theories of personality, New york, Springer. DAVIS, T. R. LUTHANS, F. 1980. A social learning approach to organizational behavior. Academy of Management Review, 5 , 281-290. DAY, D. V. 2001. Leadership development:: A review in context. The Leadership Quarterly, 11 , 581-613. DE NEVE, J.-E., MIKHAYLOV, S., DAWES, C. T., CHRISTAKIS, N. A. FOWLER, J. H. 2013. Born to lead? A twin design and genetic association study of leadership role occupancy. The leadership quarterly, 24 , 45-60. EESLEY, C. E. MILLER, W. F. 2012. Stanford Universitys economic impact via innovation and entrepreneurship, California: Stanford University. FIEDLER, F. E. 1967. A theory of leadership effectiveness, New York, McGraw Hill. GOLDSMITH, M. MORGAN, H. 2004. Leadershop Is a Contact Sport. Strategy+ Business , 70-79. GOLEMAN, D. 2003. What makes a leader? Organizational Influence Processes (Porter, LW, et al. Eds.), New York, ME Sharpe , 229-241. GRAEFF, C. L. 1983. The situational leadership theory: A critical view. Academy of management review, 8 , 285-291. GREGERSEN, H. B., MORRISON, A. J. BLACK, J. S. 1998. Developing leaders for the global frontier. Sloan Management Review, 40 , 21-32. HOGAN, R., DESOTO, C. B. SOLANO, C. 1977. Traits, tests, and personality research. American Psychologist, 32 , 255. KIRKPATICK, S. A. LOCKE, E. A. 1991. Leadership: do traits matter? The executive, 5 , 48-60. LEWIN, K. 1944. The dynamics of group action. Educational leadership, 1 , 195-200. MCCRAE, R. R., COSTA JR, P. T., OSTENDORF, F., ANGLEITNER, A., H?EBà ?KOVà , M., AVIA, M. D., SANZ, J., Sà NCHEZ-BERNARDOS, M. L., KUSDIL, M. E. WOODFIELD, R. 2000. Nature over nurture: temperament, personality, and life span development. Journal of personality and social psychology, 78 , 173. NEWMAN, H. H., FREEMAN, F. N. HOLZINGER, K. J. 1937. Twins: a study of heredity and environment, Chicago University of Chicago Press. NORTHOUSE, P. G. 2012. Leadership: Theory and practice, California, Sage Publications. NURTURE, N. V., GENES, E. HUMAN, W. M. U. 2004. Nature versus Nurture. Am J Psychiatry, 161 , 1933. PARKAY, F. W. HALL, G. E. 1992. Becoming a principal: The challenges of beginning leadership, California Allyn Bacon. RIDLEY, M. 2003. Nature via nurture: Genes, experience, and what makes us human, HarperCollins Publishers. ROBBINS, S. P. JUDGE, T. A. 2012. Organizational Behavior 15th Edition, New York, Prentice Hall. RUVOLO, C. M., PETERSON, S. A. LEBOEUF, J. N. 2004. Leaders Are Made, Not Born em The Critical Role of a Developmental Framework to Facilitate an Organizational Culture of Development/em. Consulting psychology journal: practice and research, 56 , 10. STOGDILL, R. M. 1974. Handbook of leadership: A survey of theory and research, Free Press. STRINGER, E. T. 2004. Action research in education, Pearson/Merrill/Prentice Hall Upper Saddle River, NJ. YUKL, G. VAN FLEET, D. D. 1992. Theory and research on leadership in organizations, Consulting Psychologists Press. YUKL, G. A. 2002. Leadership in organizations, California, Pearson.