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Applying export subsidies to skill development

2022-03-22

I love this post by Uri Bram on export subsidies and how they could be applied to personal skill development.

Here’s Uri on export subsidies:

South Korea is one of the greatest development stories rarely told. In just 60 years, they've taken 50 million people from largely rural poverty to a higher GDP per capita than Japan's - it's a bonkers achievement. How did they do it?

Through export subsidies. For the full story, read How Asia Works, but the short version is that Korea strategically brought its manufacturing sector up to scratch by subsidising firms conditional on them successfully exporting products; that is, on selling things abroad on the open market to people who had plenty of other options and no particular reason to buy Korean.

His really interesting idea is how you might apply this to skill development:

So paying your kid's costs while they do a writing degree is not an export subsidy, it's just a regular-subsidy. But promising to match any money they make from submitting freelance articles to magazines? This is what we'll call a Personal Export Subsidy. By supplementing the money they make from successfully placing freelance articles, you're letting an impartial external arbiter (the various magazines) decide whether your kid's work is actually worth something, while acknowledging that in the early days you'll need to increase that "something" for your kid to survive while climbing the ladder.

I’ll add to this that you think of things like the YouTube Shorts Fund as a sort of export subsidy for short form video creation. Another example of this is venture capital, particularly at early stages where funding is pretty directly tied to showing some form of commercial traction and the bar for company traction gets raised as the company matures.