In fact, education, as an economic category, is attributed to characteristics which are typical for economics but which used to be quite unusual for education. In this respect, it is important to lay emphasis on the fact that modern education involves basic market laws and principles which function within the modern education system, including the principles of demand and supply. At this point, it should be said that the demand for education is a relatively new concept because, in the past, education was viewed as a kind of privilege available to a few. In contrast, today, education has become a necessity that stimulates the growing demand for education.
What is meant here is the fact that the modern economy needs well-qualified, highly-educated professionals. In such a context, education is essential for employees since it ensures their larger job opportunities. On the other hand, education is essential for companies which need professionals able to meet strategic goals of companies and cope with new challenges the modern business environment imposes on them. At the same time, education is strategically important for a country too because it contributes to the stable economic development and maintain the balance within the society due to the provision of new job opportunities for employees and opportunities for the further development of companies. Hence, education is now universally recognized as a “form of investment in human capital that yields economic benefits and contributes to a country’s future wealth by increasing the productive capacity of its people (Woodhall, 2004, p.23).
At this point, it is worth mentioning the fact that the demand for education in the modern world is a two-fold process. On the one hand, there are employees, who need education to get a better, well-paid job compared to semi- or low-qualified employees, who have poor education or no education at all. On the other hand, there are companies, who need professionals to keep growing and taking advantageous competitive position in the market. Thus, both employees and employers stimulate the growing demand for education today. At the same time, neither employees nor employers can fully meet the existing demands without the assistance from the part of the state because they cannot afford educational costs which are too high for employees and which can become an unbearable burden for companies.
In this respect, the state cannot remain a neutral party since it also needs the development of the educational potential of the country. As it has been already mentioned above, education is strategically important for the state because it defines the future wealth of the state. This means that the education potential of a country defines its further development since well-educated people have larger opportunities to increase their productiveness and effectiveness of their work. Consequently, the state is interested in the high demand for education as well as it is interested in the normal supply of educational services to people. In such a way, the state plays an important role in the economics of education because through national educational programs and through the development of educational system it can meet the existing demand for education as well as stimulate the growth of the demand for education through the stimulation of the development of knowledge-based industries. The latter can be done through the fiscal policy of the state which stimulates companies to invest into the development of new technologies, which naturally imply the increase of demand for education because the introduction of innovations is impossible without professionals who are able and qualified to carry out the introduction of such innovations. In such a way, the state can stimulate the demand for education, which increases the economic potential of a country.
Finally, speaking demand for education, it is worth mentioning the fact that the modern education provides people not only with opportunities to get a good job but also with opportunities to start their own business. These opportunities are very important and increase the demand for education even more since people are willing to start their own business and to become independent of employers or to become employers themselves. In such a way, educational opportunities stimulate the demand for education. However, it is important to underline that, unlike the past, when the demand for education was mainly limited by professional education involving mainly the sphere of higher education, today, the demand for education is oriented on all levels of education, starting from school education to a life time education. What is meant here is the fact that the foundation of educational potential of an individual is laid in his/her childhood that means that school education is extremely important for both employees and employer. At the same time, the progress of modern technologies is rapid. Hence, even the higher education cannot fully prepare an individual to work in a constantly changing environment since he/she will need to work with new technologies. This means that an individual will need to keep learning even after the graduation from the University, for instance, that makes his/her education a life time education (Hanushek, 1992).
Moreover, today, the demand for individual capable to produce new knowledge is growing at an unparalleled pace.
Hence, demand for education is naturally extended from the traditional school and higher education onto the absolutely new form of education which is able to provide people with knowledge and develop their skills and abilities to learn independently and produce new knowledge.