The potential for individuals and countries to benefit from this emerging knowledge economy depends largely on their education, skills, talents and abilities, that is, their human capital. As a result, governments are increasingly concerned with raising levels of human capital, chiefly through education and training, which today are seen as ever more critical to fuelling economic growth.
However, formal education, which usually runs from about the age of 4 or 5 to the late teens or early 20s, is only one part of forming human capital. In many ways it is more useful to think of human capital formation as a life-long learning process rather than as education.
From an economic and employment perspective, this human potential for lifelong learning is assuming ever greater importance. Old jobs are migrating to places where labour is cheaper. Meanwhile, fast-changing technologies are creating new jobs unheard of only recently or radically altering what workers need to know to perform their existing jobs. Consequently, people now need to continue developing their skills and abilities throughout their working lives.
This Policy Brief looks at the concept of human capital, its increasing importance to economic growth, and how governments and societies can work to develop it during early childhood, the years of formal education and adulthood.