UNESCO says 739 million adults cannot read or write

The economic cost goes well beyond literacy rates. UNESCO said four in 10 students worldwide fail to reach minimum reading standards by the end of primary school, while 273 million children and young people remain out of school. For governments already facing fiscal strain, conflict exposure and rapid population growth, those numbers imply a widening gap between labor-market demand and the skills workers actually possess.

That gap matters for investors because it shapes the productivity ceiling for some of the world’s fastest-growing consumer markets and most important manufacturing and services hubs. Low literacy and weak foundational learning limit adoption of technology, reduce the returns on infrastructure spending and slow the buildout of formal employment, leaving economies more dependent on low-productivity work and vulnerable to social pressure.

UNESCO said it has stepped up support for governments by helping strengthen national strategies, improve data collection and train educators. Its literacy programmes reached more than 460,000 learners across 43 countries in 2024 and 2025, and helped 22 countries update education policies. But the scale of the challenge remains far larger than current interventions, especially as the agency also pushes digital skills and media literacy to prevent further exclusion in the transition to a more technology-driven economy.

The message for policymakers is that literacy is no longer just a social policy issue; it is a growth constraint and a competitiveness issue. For investors, the divide points to a long-run bifurcation between countries able to convert young populations into productive labor forces and those that risk remaining stuck with under-skilled workforces and slower returns on capital.