[Economy Pulse] The Success of Productive Finance Depends on Redesigning Financial Education

Supplying Funds Alone Is Not Enough for Productive Finance
Strategic Investment in Financial Education Is Needed

Joonyoung Jung, Chairman of the Finance and Happiness Network

Productive finance means redirecting the flow of money toward innovation, growth, local communities, and the future. However, changing policy direction does not immediately alter people’s investment decisions or choices about where to allocate their funds. The ability to determine which industries have growth potential, which companies possess sustainable competitiveness rather than fleeting trends, and which financial products contribute more to long-term asset building and real economic growth than to short-term gains ultimately comes from the judgment of financial consumers. In other words, the success of productive finance depends on the capabilities of financial consumers.

The problem is that the financial capability to support this policy direction is still insufficient. As the OECD has repeatedly emphasized, financial literacy is not just about individual financial stability; it is directly linked to the foundation for national economic growth. However, the reality of the domestic investment market is still more influenced by speed and prevailing sentiment than by fundamentals. The reason that long-term, diversified, value-oriented capital flows have failed to take root is not a lack of funds. Rather, it is because the ability to judge where and how to allocate capital has not yet matured sufficiently. Such judgment does not develop automatically. Now, it is time to redesign the goals, content, and methods of financial education so that the capabilities of financial consumers can become the foundation of productive finance.

First, what we teach must change. Financial education for productive finance should be redefined to cultivate the ability to identify which industries and companies have growth and sustainability, to understand why capital should flow there, and to distinguish between short-term profits and long-term value. In addition, it is necessary to systematically teach the principles of diversification and the structure by which capital markets support corporate growth and innovation, thereby redefining the standards for “good investment.” To achieve this, education should include easy-to-understand explanations of the structure of future industries such as semiconductors, biotech, AI, and climate technology; foundational training to analyze business models and market positions of companies; and lessons on diversified investment, including ETFs and bonds. Without such education, funds will inevitably revert to familiar short-term speculation. Therefore, the design of specialized educational modules tailored to each life stage and linked to productive finance is urgently needed.

The way we teach must also change. It is difficult to change financial behavior with one-off, lecture-based education. Financial education must now go beyond explanation and become experiential and hands-on, allowing learners to practice real-life choices and judgments. Training should include reading disclosures, checking the constituent assets of ETFs, applying policy finance products to real cases, and practicing how to identify investment fraud and misleading advertisements. The benefits of long-term investment should also be internalized by simulating compound interest and diversified investment. The UK FCA pointed out that many young investors make investment decisions within a short period and some invest impulsively by following trends, which illustrates the importance of delaying decisions and verifying information. Financial education should not remain a one-time event. It must be established as a continuous learning system that is repeated and deepened according to life stages and changes in the financial environment.

The criteria for assessing the outcomes of education must also change. Rather than counting how many people received education, we should look at whether long-term diversified investments have increased after the education, whether understanding and utilization of policy finance products have improved, whether short-term chasing and financial fraud damages have decreased, and whether the financial decision-making of youth and the elderly has become more stable. Financial education for productive finance should not be about teaching more, but about education that actually changes where and how funds are allocated.

The success of productive finance is not determined by how much funding is supplied alone. Just as important as redirecting the flow of capital is investing strategically in the financial capability of consumers and in financial education itself. If productive finance is a national agenda, then the financial education supporting it should also be elevated from an ancillary program to essential national infrastructure.

Joonyoung Jung, Chairman of Finance and Happiness Network

This content was produced with the assistance of AI translation services.