Importance of Human Capital in National Competitiveness

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

 Among these the most critical is human capital given that it is:
Both an input and output. 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--vis other nations which is the essence of national competitiveness.

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

Human Capital: Nucleus of National Competitiveness

A nations stock of human capital does not comprise only - Literate workforce - Good percentage of technical, scientific and professional categories of labor but also the all important categories of: - Leaders - Managers - Entrepreneurs Each of the above plays a different role in assuring national competitiveness.

Determinants of Quality Human Capital

Education: Broadly defined to include education in schools, plus formal and on the job training. 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.

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

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

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

Indias Global Competitiveness

Human Capital as competitiveness of a firm

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

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

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. career development ensures that the employee is well developed before he moves up the next ladder in the hierarchy.

Training and development For attaining technical, human and the conceptual skills. 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