<< Chapter < Page Chapter >> Page >

Human capital formation – no panacea

Investment in Human Capital Formation is no panacea. It is one of the vital necessary conditions for economic growth and development. But it is not, by any means, a sufficient condition. There are many examples of nations who made large and continuing investments in Human Capital who have prospered mightily since 1950: South Korea, Malaysia, Ireland, Chile, etc.

But, there are nations who have stressed investment in primary and secondary education, and who have achieved high literacy rates etc., but have enjoyed very limited, or no economic growth over long periods. Examples from the past fifty years include North Korea, Russia, Bulgaria from 1950-1990, and China from 1950-1982. The latter were communist governments were rather successful in spreading education, especially primary and secondary. By 1990 just before the collapse of communism in Europe adult literacy rates in most communist states were nearly as high as Europe and the U.S.: This should have been a great platform upon which to build.

Consider literacy rates in 2009:
U.S. 99%, Italy 97%, Spain 96%, rest of Europe 99%
Hungary 99%, Czechoslovakia 99%, Poland 90%, China 68%

The economies of the communist Bloc nations, including China, grew slowly from 1950-1990. However after 1991 when markets were reintroduced, the formerly Eastern and Central European communist nations began to grow fairly rapidly, largely because the Human Capital base was already there, and it could now be used in combination with new types of investment in Physical Capital, new trade opportunities etc.

The Human Capital base by 2000 was wide and deep in Czechoslovakia, Hungary, and Poland. So much so that the author made special trips there to recruit scientists to come to Duke University.

Consider china

In China in 1985, literacy rates were 68%. By 2006, the male literacy rate in China was 96%, a 50% increase in only 20 years.

And Chinese economic growth? From 1990 through 2008, Chinese economic growth later averaged more than 10% per year. At growth rate of 10%, how long to double income? (Answer: about 71/2 years).

The Human Capital story is heartening, but there are some thorns among the roses.

One example. Although gross enrollment ratios for grades 1-5 in India reached 100% in India by 2008.

Jadgish Bhagwati&Arvind Panagariya, (2013), Why Growth Matters, Washington, DC: Council on Foreign Relations, p.190.

A government of India report Source: says that the percent of fifth graders who read on at least a second grade level has dropped from 58% in 2007 to 54% in 2011. (Half cann ot read at second grade level. And university education, the percent of population enrolled in college or university in 2007 was 13%, far lower than Brazil (30%) or China (22%).

Jadgish Bhagwati&Arvind Panagariya, (2013), Why Growth Matters, Washington, DC: Council on Foreign Relations, p.136.

A digression: technology, internet, cell phones and human capital

As we have noted, ordinarily a nation must have made sizeable previous investments in Human Capital Formation before experiencing any notable growth from technological progress.

Questions & Answers

anyone know any internet site where one can find nanotechnology papers?
Damian Reply
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
characteristics of micro business
for teaching engĺish at school how nano technology help us
Do somebody tell me a best nano engineering book for beginners?
s. Reply
there is no specific books for beginners but there is book called principle of nanotechnology
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
what is the actual application of fullerenes nowadays?
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
Mostly, they use nano carbon for electronics and for materials to be strengthened.
is Bucky paper clear?
carbon nanotubes has various application in fuel cells membrane, current research on cancer drug,and in electronics MEMS and NEMS etc
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
Do you know which machine is used to that process?
how to fabricate graphene ink ?
for screen printed electrodes ?
What is lattice structure?
s. Reply
of graphene you mean?
or in general
in general
Graphene has a hexagonal structure
On having this app for quite a bit time, Haven't realised there's a chat room in it.
what is biological synthesis of nanoparticles
Sanket Reply
what's the easiest and fastest way to the synthesize AgNP?
Damian Reply
types of nano material
abeetha Reply
I start with an easy one. carbon nanotubes woven into a long filament like a string
many many of nanotubes
what is the k.e before it land
what is the function of carbon nanotubes?
I'm interested in nanotube
what is nanomaterials​ and their applications of sensors.
Ramkumar Reply
Got questions? Join the online conversation and get instant answers!
Jobilize.com Reply

Get the best Algebra and trigonometry course in your pocket!

Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
Google Play and the Google Play logo are trademarks of Google Inc.

Notification Switch

Would you like to follow the 'Economic development for the 21st century' conversation and receive update notifications?