Human capital development and its impact on firm performance. The importance of human capital for the economic development. It is a source of both increased productivity and technological advancement. Human resource development edinburgh business school. Developing and promoting the adoption of relevant policies and strategies. On the general and specific human capital general human capital is to be defined by generic knowledge and skill, not specific to a task or a company, usually accumulated through working experiences and education alan at al. Human capital and regional development erepositori upf. A spatial equilibrium is a regional allocation of entrepreneurial human capital, workers human capital, and physical capital k i such that a entrepreneurs hire workers, physical capital, and land to maximize profits. One of the key determinants of economic success is human capital. This book makes original contributions to the literature on clusters, human capital, and regional development by focusing on the link between entrepreneurship and economic growth, aiming for a better understanding of the dynamics of growth determined by the entrepreneurs action in the regional space. This chapter aims at showcasing to a broad audience how the concept of human capital can add to our understanding of regional economic growth and development. Theoretical framework of human capital development of. In order to understand these issues we begin in section 2 by analysing the nonspatial impacts of human capital on economic.
A human capital strategy is a strategy that outlines the human resources and skills needed to allow an organization to achieve its goals. The underdeveloped countries need human capital to staff new and expanding government. Human capital and economic development simon appleton and francis teal 1. This means you should think ahead about what you are trying to achieve and what your desired results might look like. Jan 30, 2009 however, the links between human capital and national economic development may not necessarily be the same as those between human capital and regional economic development. Human capital and regional development andrei shleifer. Human capital, economic growth, and regional inequality in.
Human capital and regional development the quarterly. Ahhd leads the banks efforts to enhance human capital for africas economic transformation. We use secondary data from the world development report on a countrys overall human development to test for a relationship between human capital and innovation. However, the links between human capital and national economic development may not necessarily be the same as those between human capital and regional economic development. The african development banks human capital strategy aims to harness the potential of 1 billion africans through skills development and investments in new technologies to promote quality jobs and workforce competitiveness. What is the role of human capital in economic development. The role of human capital in industrial development. Insight report the global human capital report 2017. Rather they are likely to increase regional disparities. Human capital investment, however, generates higher or comparable return in lessdeveloped regions than that in developed regions. We investigate the determinants of regional development using a newly constructed database of. In fact, the major difference between the developed and developing countries is the rate of progress in human capital. Human capital development african development bank. The concept of human capital stems from the economic model of humanresource capitalism, which emphasizes the relationship between improved productivity or performance and the need for continuous and longterm investments in the development of human resources.
Human capital and regional development researchgate. Providing multisector expertise to the regional hubs and african countries. One index of human welfare, which incorporates income, education and health, shows that africas level of human development is the lowest of any region in. The longrun impact of human capital on innovation and. Pdf human capital in regional development, 1997 dumitru. The reason for this is that there are two quite distinct sets of human capital impacts on regions, the. It is based on workforce planning and is supported by talent management systems. Pdf human capital and regional development alessandra.
Plan ahead to assess results the objective of the human capital plan is to maximize the value of a companys investment in people. Equipped with education, skills and jobs, its youth. Human capital and regional development alessandra faggian and philip mccann school of geography, university of southampton, highfield. Jul 26, 2019 this chapter aims at showcasing to a broad audience how the concept of human capital can add to our understanding of regional economic growth and development. This model can be applied on a broad scale where investments in human capital are. The evidence points to the paramount importance of human capital in accounting for regional differences in development, but also suggests from model estimation and calibration that entrepreneurial inputs and human capital externalities are essential for understanding the data. However, the effect of human capital on sustainable industrial development in nigeria has not been adequately explored.
The report was completed in 2014 under the development partnership program for south asia. Risk, vulnerability, shocks and climate change 48 4. Addressing risk and vulnerability of the poor 48 4. The concept of human capital stems from the economic model of human resource capitalism, which emphasizes the relationship between improved productivity or performance and the need for continuous and longterm investments in the development of human resources. Pdf on jan 1, 2009, alessandra faggian and others published human capital and regional development find, read and cite all the research.
We combine the cross regional analysis of geographic, institutional, cultural, and human capital determinants of regional development with an examination of productivity in several. More specifically, each of the various components of human development is likely to have a distinct impact on economic growth. Evidence from developmental economics 267 concept as traditionally defined to say that expenditures on education, training, and medical care, etc. The results show that historical human capital is a significant determinant of todays regional levels of innovation and economic development in. The global human capital report 2017 vii how nations develop their human capital can be a more important determinant of their longterm success than virtually any other factor.
Measurement of human capital is realised by human capital index, which in determination of the european union is based on four group of areas. Generally, human capital represents the assets each individual develops to enhance economic productivity. Methodology for a world bank human capital index aart kraay1 jel codes. Policy in this area is focusing on early childhood development, improving quality and choice in schooling, creating excellence in tertiary education, and widening access to adult learning. We argue that empirical models that treat institutions and human capital as exogenous are misspecified, both because of the usual omitted variable bias problems and because of. Second, it is difficult that human capital itself independently contributes to individual development and national economy growth. We investigate the determinants of regional development using a newly constructed database of 1569 subnational regions from 110 countries covering 74 percent of the worlds surface and 96 percent of its gdp. Human capital planning is a systematic process for identifying the resource pool and its capabilities to meet organization goals and developing the strategies to meet the requirements to fulfill those goals. In short, the human capital theorists argue that an educated population is a productive population. This is followed by a discussion of the regional aspects of the relationship between human capital and growth, focusing on the drivers and. The success of the policy is largely determined by the identification of factors that contribute to such disparities. Further, human capital is concerned with the wholesome adoption of the policies of education and development.
This then, restricts even further the prospects of using the worlds accrued technical, capital and human resources for the establishment of a viable. The intangible human capital, on the other hand, is an instrument of promoting comprehensive development of the nation because human capital is directly related to human development, and when there is human development, the qualitative and quantitative progress of the nation is inevitable. If they can become more productive on an individual level through development, the organization in turn will begin seeing productivity gains. Human capital and regional development, the quarterly journal of economics, oxford university press, vol. Pdf we investigate the determinants of regional development using a newly constructed database of 1569 subnational regions from 110 countries.
Usually regions with higher human capital endowment have higher per capita output, lower unemployment rate and higher wages than regions with lower level of human capital. These are not simply costs but investment with valuable returns that can be calculated. Introduction health and education are both components of human capital and contributors to human welfare. In this initial growth work, human capital was simply measured by school attainment, or s. International labour mobility and uneven regional development. The people that make an organization run are an asset to be invested in. Human capital and regional development tuck dartmouth. Pdf human capital and regional development researchgate. The authors examine the effects of two forms of capital, i.
Human capital and regional development the quarterly journal. Pdf on jan 1, 2009, alessandra faggian and others published human capital and regional development find, read and cite all the research you need on researchgate. This is followed by a discussion of the regional aspects of the relationship between human capital and growth, focusing on the drivers and consequences. Human capital is the fundamental source of economic growth. Pdf human capital and regional development semantic scholar. Nov 18, 2012 a spatial equilibrium is a regional allocation of entrepreneurial human capital, workers human capital, and physical capital k i such that a entrepreneurs hire workers, physical capital, and land to maximize profits. Therefore, although both policies have a high impact on growth, investing in human capital would be a more effective policy to reduce regional income gaps. Entrepreneurship, human capital, and regional development. Williams, vladimir balaz, and claire wallace european urban and regional studies 2004 11.
Human capital development is seen as a focal point for pivoting industrial development, for reducing the level of unemployment and increasing the supply of entrepreneurs in any economy. Regional variations in human development performance 28 3. Issues and realities 41st isocarp congress 2005 2 with political and ideological issues. The eu designs its cohesion policy with the primary purpose of reducing disparities in regional development. International labour mobility and uneven regional development in europe allan m. Introduction we investigate the determinants of regional development. To organize the discussion, we present a new model of regional development that introduces into a standard migration framework elements. The impact of human capital on economic growth sciencedirect. This course is designed to provide a complete, integrated introduction to the process, practices and perspectives of this important area of people management.
Human capital development is vital to the growth and productivity of the organization. Raising human capital has emerged as a key policy priority, particularly for lowskilled individuals, who are at risk of being left even further behind. Human resource development edinburgh business school x course rationale human resource development hrd at work is now a prominent and central part of human resource management hrm. Innovative strategies for accelerated human resource development in south asia ta6337 reg. We combine the crossregional analysis of geographic, institutional, cultural, and human capital determinants of regional development with an examination of productivity in several. With a population bigger than any other continents, africa has a huge asset and a strong competitive advantage. By human capital we mean the knowledge and skills people possess that enable them to create value in the global economic system. Thus, equation 1 could be estimated by substituting s for human capital and estimating the growth relationship directly. Human capital is regarded to be one of the major sources of economic growth and also as one of important determinants of national and regional differences.
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