IJCISS Vol.2 Issue-08, (August, 2015) ISSN: 2394-5702
International Journal in Commerce, IT & Social Sciences (Impact Factor: 2.446)
Human Capital: The Tool for Economic Growth and Development
Dr. Mahesh U. Daru
Associate Professor & HOD, Accountancy,
Smt. C.D.J. Rofel Arts & I.S.R.A.Rofel Commerce College, Vapi (Gujarat) India.
Abstract:
The key for the future of any country and any institution lies in the talent, skills and capabilities of its
people. A Country’s human capital endowment—the skills and capacities that reside in people and
that are put to productive use—can be a more important determinant of its long term economic
success than virtually any other resource. This resource must be invested in and leveraged efficiently
in order for it to generate returns, for the individuals involved as well as an economy as a whole.
Talent shortages is one the burning problems of developed and developing countries. If this problem
is not solved quickly, then it may lead to many social as well economic problems. Therefore it is
essential to pay attention to how these shortages can be met in the short term and prevented in the
long term. This paper focus on importance of human capital in the growth and development of the
countries as well also discuss different barriers in the formation of human capital.
Key Words: Physical Capital, Human Capital, Education, Training
A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories
International Journal in Commerce, IT & Social Sciences
http://www.ijmr.net.in email id- Page 50
, IJCISS Vol.2 Issue-08, (August, 2015) ISSN: 2394-5702
International Journal in Commerce, IT & Social Sciences (Impact Factor: 2.446)
Introduction
Capital refers to already produced durable goods which further contribute to the production of
goods and services. In simpler words, capital refers to any produced good/service which enables an
individual/organization to deliver high quality output. Capital acts as a catalyst to increase
productivity in organizations. A nation can convert physical resources like land into physical capital
like factories; similarly, it can also turn human resources like students into human capital like
engineers and doctors. Sufficient human capital is needed in the form of competent people who
skills, knowledge and talent for overall development of the country. In other words, we need good
human capital to produce other human capital like doctors, engineers scientists teacher etc. There is
need to investment in human capital to produce more human capital out of human resources. Every
organization invests its money and resources to train new employees. Employees in turn work hard,
upgrade their existing knowledge and contribute in their own way to increase the productivity of
their organization. Investment in education and health is unproductive if it does not enhance output
of goods and services.
Human capital considers education and health as a means to increase labour productivity. Human
capital is defined as the collective stock of skills, attributes, knowledge, and expertise of employees
which further plays an integral role in increasing the productivity of the organization.
The four pillars of human Capital
The four pillars of the Index are:
• The Education pillar contains indicators relating to quantitative and qualitative aspects of
education across primary, secondary and tertiary levels and contains information on both the
present workforce as well as the future workforce.
• The Health and Wellness pillar contains indicators relating to a population’s physical and mental
well– being, from childhood to adulthood.
• The Workforce and Employment pillar is designed to quantify the experience, talent, knowledge
and training in a country’s working–age population.
• The Enabling Environment pillar captures the legal framework, infrastructure and other factors
that enable returns on human capital.
A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories
International Journal in Commerce, IT & Social Sciences
http://www.ijmr.net.in email id- Page 51
International Journal in Commerce, IT & Social Sciences (Impact Factor: 2.446)
Human Capital: The Tool for Economic Growth and Development
Dr. Mahesh U. Daru
Associate Professor & HOD, Accountancy,
Smt. C.D.J. Rofel Arts & I.S.R.A.Rofel Commerce College, Vapi (Gujarat) India.
Abstract:
The key for the future of any country and any institution lies in the talent, skills and capabilities of its
people. A Country’s human capital endowment—the skills and capacities that reside in people and
that are put to productive use—can be a more important determinant of its long term economic
success than virtually any other resource. This resource must be invested in and leveraged efficiently
in order for it to generate returns, for the individuals involved as well as an economy as a whole.
Talent shortages is one the burning problems of developed and developing countries. If this problem
is not solved quickly, then it may lead to many social as well economic problems. Therefore it is
essential to pay attention to how these shortages can be met in the short term and prevented in the
long term. This paper focus on importance of human capital in the growth and development of the
countries as well also discuss different barriers in the formation of human capital.
Key Words: Physical Capital, Human Capital, Education, Training
A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories
International Journal in Commerce, IT & Social Sciences
http://www.ijmr.net.in email id- Page 50
, IJCISS Vol.2 Issue-08, (August, 2015) ISSN: 2394-5702
International Journal in Commerce, IT & Social Sciences (Impact Factor: 2.446)
Introduction
Capital refers to already produced durable goods which further contribute to the production of
goods and services. In simpler words, capital refers to any produced good/service which enables an
individual/organization to deliver high quality output. Capital acts as a catalyst to increase
productivity in organizations. A nation can convert physical resources like land into physical capital
like factories; similarly, it can also turn human resources like students into human capital like
engineers and doctors. Sufficient human capital is needed in the form of competent people who
skills, knowledge and talent for overall development of the country. In other words, we need good
human capital to produce other human capital like doctors, engineers scientists teacher etc. There is
need to investment in human capital to produce more human capital out of human resources. Every
organization invests its money and resources to train new employees. Employees in turn work hard,
upgrade their existing knowledge and contribute in their own way to increase the productivity of
their organization. Investment in education and health is unproductive if it does not enhance output
of goods and services.
Human capital considers education and health as a means to increase labour productivity. Human
capital is defined as the collective stock of skills, attributes, knowledge, and expertise of employees
which further plays an integral role in increasing the productivity of the organization.
The four pillars of human Capital
The four pillars of the Index are:
• The Education pillar contains indicators relating to quantitative and qualitative aspects of
education across primary, secondary and tertiary levels and contains information on both the
present workforce as well as the future workforce.
• The Health and Wellness pillar contains indicators relating to a population’s physical and mental
well– being, from childhood to adulthood.
• The Workforce and Employment pillar is designed to quantify the experience, talent, knowledge
and training in a country’s working–age population.
• The Enabling Environment pillar captures the legal framework, infrastructure and other factors
that enable returns on human capital.
A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories
International Journal in Commerce, IT & Social Sciences
http://www.ijmr.net.in email id- Page 51
