Across centuries of trade from east to west, it was the ability to calculate, estimate, and negotiate along the Silk Road that formed the invisible infrastructure of economic exchange. This historical perspective reminds us that skills such as calculation, interpretation, and the ability to demonstrate understanding, now captured under the concept of functional literacy and reflected across various levels of Bloom’s Taxonomy, have always underpinned societal and economic progress, and that effective policymaking must balance current functional literacy gaps in the education system level with a focus of social and economic relevance.

It is not by coincidence that in summer of 2025 the UK Department for Education launched a national Curriculum and Assessment Review, prompting extensive public and professional debate on which skills should be taught and assessed in the country’s education system. In its response, the National Education Union (NEU) welcomed the review’s recognition that the current system is too narrowly focused on memorisation, stressing the need for a curriculum that prioritises broader competencies, authentic assessment, and the life skills required to succeed in a changing world (NEU, 2025). As reported by Whittaker (2025) in Schools Week, one of the agreed priorities following the public consultation was to ensure that subject experts emphasise the assessment of knowledge application during item reviews, particularly incorporating formulas and equations wherever appropriate. 

In early November 2025, the UK Department for Education released its final post-consultation report, identifying five areas that drew the most attention from young people, parents, carers, and other stakeholders: financial literacy, digital literacy, media literacy, climate and sustainability education, and oracy. As reported by Adams (2025) in The Guardian, one of the review’s final recommendations was to introduce a new diagnostic test in maths and English at Year 8 to help teachers identify knowledge gaps and support student progression, and the government additionally proposed national reading tests for Year 8 pupils. These discussions and high level proposals highlight a global shift: economies increasingly depend not on the accumulation of knowledge, but on the ability to apply it, making functional skills a core element of national competitiveness.

This article reflects on how functional literacy, assessment ecosystems, and evidence-driven policy together form the foundation for building skilled human capital and sustaining long-term economic growth, an agenda that every nation, especially those setting the tone for the accelerated modernization, should consider placing it at the centre of its development strategy.

Functional Literacy as an Economic Driver

Today, functional literacy, especially the basic reading and numeracy competencies stands as one of the most powerful impact factors of economic resilience, a relationship strongly evidenced by the research that indicates that “Our economic analysis suggests that the present value of lost world economic output due to missing the goal of global universal basic skills amounts to over $700 trillion over the remaining century, or 12 % of discounted GDP.” (Gust, Hanushek, & Woessmann, 2024, p. 7). 

Countries that consistently cultivate and measure real skills are the ones that build innovative, adaptable, and inclusive economies. High-income countries from North America offer an important lesson. Their national assessments (biennial NAEP cycles in the U.S. and triennial or quadrennial PCAP cycles in Canada) are only one layer of a much deeper ecosystem. The real strength lies in the continuous flow of evidence generated throughout the school year: formative assessments in classrooms, interim benchmarks, and state or provincial summative evaluations that inform stakeholders on student progress. As Marion et al. (2024) explains, “a balanced assessment system should consist of formative, interim, and summative assessments that teach and report on learning while providing multiple sources of evidence to support educational decision-making” (p. 9). However, even with these structures in place, recent developments show that maintaining high-quality functional literacy requires constant vigilance and timely, responsive data.

As reported by McManus (2025) in The Guardian, in the case of the USA, the 2024 NAEP results showed that high-school seniors’ reading and mathematics scores had fallen to their lowest levels in decades, prompting renewed calls for more frequent and responsive monitoring of foundational skills. A recent study from Canada finds out that using formative assessments more often helps teachers spot occurring learning gaps sooner, supporting more effective instructional intervention (Bulut et al., 2024). Both of these findings highlight a common insight that if you want to steer a ship through uncertain waters, you cannot rely on a map updated once every few years, you need real-time navigation.

Assessment Frequency: Continuous Data for Economic Planning

The report by the World Bank (2025), indicates that “two-thirds of the income gap between developed and developing countries can be attributed to disparities in human capital,” reflecting the reality that without continuous assessment and skill development, countries struggle to build the functional literacy that forms the foundation of a productive workforce. The purpose of conducting assessments more frequently in high-income systems is not to drive economic growth directly, but to generate the diagnostic insight needed for targeted, effective policymaking in government reforms. Formative assessments, interim benchmarks, and provincial or state-level assessments support creating a living flow of evidence in such reform-oriented governments, which allows educators and policymakers to monitor progress, identify occurring challenges, and intervene long before small gaps become systemic failures. In many ways, this approach functions like a heartbeat monitor for an entire education system: providing real-time signals that support students in developing the applied skills demanded by modern, fast-moving economies. In contrast, many developing countries, such as Ethiopia, the Kyrgyz Republic, and Pakistan, depend almost entirely on a single sample-based national assessment conducted every four or five years. With few structured assessment opportunities in between, education systems are left navigating years of uncertainty, periods where they cannot see whether students are acquiring the competencies required for productivity, technological adoption, and engaged participation in the global economy. 

Besides, the OECD’s recent analysis shows that when assessment systems generate timely data on literacy, numeracy, and problem-solving, education systems can better align with labour-market needs, particularly in STEM-intensive industries, leading to higher productivity and innovation (OECD, 2025). In this sense, assessment frequency aimed to regularly feed data to the education system is an economic lever, and nations that utilize it are better positioned to drive long-term competitiveness and sustainable growth, particularly in STEM-intensive industries. As an additional impetus for the growing use of micro-credentials in the labour market, the same OECD analysis reinforces a broader shift toward skills-based recognition. 

Furthermore, according to Education at a Glance 2025, across countries and demographic groups, individuals with higher proficiency in literacy, numeracy, and adaptive problem-solving consistently achieve better economic and social outcomes, even when their formal qualifications are lower (OECD, 2025). This finding highlights a key trend: actual competencies, demonstrated through assessment, matter as much as, or more than traditional credentials. It is precisely this insight that underpins the growing global interest in micro-credentials, which validate specific, applied skills through targeted assessment and provide a more agile response to evolving labour-market demands. As economies become increasingly skills-intensive, these assessment-anchored micro-credentials offer a practical pathway for individuals to upgrade competencies and for employers to identify job-ready talent.

In the final note on this section, the economic value of frequent assessment depends on whether its insights are transformed into consistent, timely policy decisions, which is where the role of evidence-driven governance becomes the next level priority.

Evidence-Driven Policy: Turning Data Into Economic Outcomes

According to Levy-Feldman (2025, p. 12), “assessment evidence is indispensable for identifying system weaknesses, guiding instructional improvement, and promoting social mobility,” a message that resonates strongly with the broader global transition toward data-anchored decision-making. Therefore, around the world, nations that systematically monitor functional literacy and skill development are better positioned to detect urgent gaps early and respond with precision. So, when timely evidence guides reforms, policymakers gain the ability to refine curricula, elevate teaching practices, and direct resources to the schools and regions where support is needed most, which will surely help education systems evolve in step with the competencies required by a rapidly changing global economy.

When an education system receives national assessment results only once every four or five years, critical learning gaps can remain hidden until they become deeply entrenched. This delay weakens the connection between education policy and economic planning, constraining human-capital development and slowing the nation’s forward momentum. Ultimately, evidence-driven policy is more than a technical exercise, it is a strategic instrument of national development. When a minister of education uses assessment data to inform reforms, accelerate skill development, and elevate the quality of schooling, such leadership lays the foundation for a resilient and competitive workforce. In the same way that a compass guides a nation through shifting global currents, data-anchored policy ensures that every learner is equipped to contribute meaningfully to long-term economic progress.

Building the Future Through Data, Skills, and Shared Purpose

In today’s transforming world, the nations that will lead are those that recognise a simple truth: human capital is the most strategic asset of the 21st century. The combination of functional literacy, modern assessment ecosystems, and evidence-driven policy is a strategic matter for ministries or experts alone, turned into a national development priority, defining whether a country can compete, innovate, and prosper in a volatile global landscape. As we move deeper into the skill-based innovative economy, the speed at which countries identify learning gaps, respond with targeted reforms, and align education with future labour-market needs will define their trajectory. The lessons from high-performing systems are clear: real-time data, assessment, and a culture of continuous improvement create education systems that do not just react to global trends, they shape them. These systems are capable of producing citizens who think critically, solve complex problems, and adapt to emerging technologies with confidence.

For countries undergoing accelerated modernisation, this moment presents both a challenge and an opportunity. The challenge lies in closing existing skill gaps and modernising outdated assessment structures. But the opportunity is far greater: to leapfrog traditional models, adopt advanced assessment technologies, strengthen policy feedback loops, and build an education system designed for the future rather than the past. This requires leadership that understands that education reform is economic reform. It requires strategic investments guided not by intuition, but by evidence. And it requires a clear national commitment to ensuring that every learner, regardless of region, background, or starting point, has the skills to thrive in a competitive global economy.

Looking ahead, countries that centre their strategies on functional literacy, continuous assessment, and data-anchored governance will be the ones that generate impactful, sustained growth. They will cultivate workforces capable of driving innovation, attracting investment, and contributing to the scientific, technological, and cultural advancements of tomorrow.

The future belongs to those who measure wisely, act timely, and invest boldly in their people.

About the Author 

Vali Huseyn is an educational assessment expert and quality auditor, recognized for promoting excellence and reform-driven scaling in assessment organizations. He mentors edtech & assessment firms on reform-aligned scaling by promoting measurement excellence, drawing on his field expertise, government experience, and regional network.

He holds a master degree in educational policy from Boston University (USA) and Diploma of Educational Assessment from Durham University (UK). Vali has supported national reforms in Azerbaijan and, through his consultancy with AQA Global Assessment Services, works with Kazakhstan and the Kyrgyz Republic to align assessment systems with international benchmarks such as CEFR, PISA, and the UIS technical criteria. He also works as a quality auditor in partnership with RCEC, most recently audited CENEVAL in Mexico. Fluent in Azerbaijani, Russian, Turkish, and English, he brings a deep contextual understanding to cross-country projects.

References

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Bulut, O., Donauer, S., & Thomas, S. (2024). Formative assessment frequency and early identification of learning gaps in Canadian classrooms. Canadian Journal of Educational Research, 67(1), 45–62. https://doi.org/10.1037/cjer0000123 

Gust, S., Hanushek, E. A., & Woessmann, L. (2024). Global universal basic skills: Current deficits and implications for world development. https://www.cesifo.org/en/publications/2024/working-paper/global-universal-basic-skills-current-deficits-and-implications-world 

Levy-Feldman, I. (2025). The role of assessment in improving education and social mobility. Education Sciences, 15(2), 224. https://doi.org/10.3390/educsci15020224 

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Summers, D. (2023). Teachers’ use of assessment data to improve student achievement. Literature Reviews in Education and Human Services, 2(2), 21–49. https://doi.org/10.51363/lrehs.v2i2.67 

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