Importance of Human Capital in National Competitiveness

Economic and governance institutions of society 4. Infrastructure or those dealing with the physical aid to production especially energy. Efficiency of markets: . Human Capital or factors dealing with the human agents 2. transport system.Introduction • Broadly at the core of national development and competitiveness are five sets of factors namely: 1. Finance.goods. labour and financial 5. ICT backbone. water and sanitation 3. capital and technology .

• All the other factors are the products of human capital including the development of infrastructure and institutions. • The role of human capital becomes clearer when nations are compared in terms of their ability to produce at lower costs. . innovate vis-à-vis other nations which is the essence of national competitiveness.• Among these the most critical is human capital given that it is: • Both an input and output.

Twelve Pillars of Competitiveness • Basic requirements (Key for Factor Driven Economies) – Institutions – Infrastructure – Macroeconomic environment – Health and primary education • Innovation and sophistical factors: key for innovation driven economies – Business Sophistication – Innovation • Efficiency enhancers: Key for efficiency driven economies: – Higher education and training – Good market efficiency – Labour market efficiency – Financial Market development – Technological readiness – Market size .

scientific and professional categories of labor but also the all important categories of: .Managers . .Leaders .Entrepreneurs Each of the above plays a different role in assuring national competitiveness.Literate workforce .Human Capital: Nucleus of National Competitiveness • A nation’s stock of human capital does not comprise only .Good percentage of technical.

Education plays a key role in the ability of country to absorb modern technology and to develop the capacity for self-sustaining growth and development.Determinants of Quality Human Capital • Education: Broadly defined to include education in schools. plus formal and on the job training. .

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they constitute major determinants of the productivity of labour and national competiveness. Combined with education especially of females. .• Health: Health conditions greatly affect the productivity of the labour force of the country.

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In that regard. risk taking and innovation make all the difference. beliefs. the mode of education –whether the emphasis is on rote learning or development of thinking capacity.• Culture: Come to think of it. A body of knowledge points to the fact that culture matters in the quality and productivity of human capital. norms and attitudes shape work ethic and productivity. .

people will respond to them. If you reward creativity and technical skills.• National Incentive system: In that connection. even a single spine wage and salary system is halfway. . an economy gets what it rewards.

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India’s Global Competitiveness .

creative abilities. talents and attitudes obtained in the population.Human Capital as competitiveness of a firm • From the national point of view. . they represent the total of the inherent abilities. acquired knowledge and skills as exemplified in the talents and aptitudes of its employees. human resources are knowledge. skills. whereas from the viewpoint of the individual enterprise.

Significance • Activation of non-human resources • Means for developing competitive advantages • Source of creative energy .

career development ensures that the employee is well developed before he moves up the next ladder in the hierarchy. .Techniques to enhance human resource • Career planning and development – it involves identification of individuals and charting out their career paths and designing an organisational system of career movement and growth opportunities for employees.

Training and development For attaining technical. Methods On-the-job methods • Job instruction training • Apprenticeship • Coaching/ understudy • Mentoring • Job rotation Off-the-job methods • Vestibule training • Lectures and conferences • Syndicate • Brainstorming • Simulation training • Sensitivity training • Transactional analysis . human and the conceptual skills.

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