The knowledge, skills, and health humans accumulate during their lifetime is human capital. The words of Benjamin Franklin, “an investment in knowledge always pays the best return” demonstrates the importance of human capital. Does investment in human capital have positive impact, and it play any role to shape future workforce? Research suggests that 10 – 30% GDP per capita difference across countries is attributable to human capital. In current era, we have seen many examples of countries who prioritized human capital and able to pull people out of poverty, raised their living standards, and achieved unprecedented economic growth. A newly launched World Bank metric, Human Capital Index, shows the dominance of Asian countries including South Korea, Singapore, Hong Kong, and Japan are on top which signifies this fact.
Recently published, World Development Report 2019 emphasize the importance of human capital, and how investment in humans primarily in education and health should be the top priority of governments. The changing nature of work, globalization, technology, and skills needed in future workforce needs an immediate attention and investment in early childhood, youth, and current workforce. It further says, manual jobs are going to be replaced by robots, however, technology will create new jobs and opportunities in economies, specially in the developing world. To perform these jobs effectively and efficiently, “cognitive skills such as complex problem solving, socio-behavioral skills such as teamwork, and skills combinations that are predictive of adaptability such as reasoning and self-efficacy” will be required from future workforce.
According to latest estimates, more than 260 million children are out of school posing a serious threat on future global workforce. Subsequently, more than 60% children enrolled in primary schools in developing world fail to achieve minimum level of proficiency due to lack of quality and access. Nations who invested in early childhood development extracted more benefits in terms of human capital. North America and Europe, on average, invest 8.8% on preprimary, whereas this number is only 0.3% for sub-Sahara Africa. Benefits of about $ 6-17 can be attained if an additional dollar is invested in early childhood development. In short, globally the investment in human capital should be raised prioritizing developing countries. This is a wakeup call for us and investment in human capital is in dire need to address challenges of future posed by emerging technology, changing nature of work, and global connectivity.