Global Human Capital Report 2017
Human capital is a key factor for growth, development and competitiveness. This link works through multiple pathways at the individual, firm and national level. Learning and working provide people with livelihoods, an opportunity to contribute to their societies and, often, meaning and identity. Workers’ skills lead to productivity and innovation in companies. At the national level, equality of opportunity in education and employment contribute to economic development and positive social and political outcomes.
The Global Human Capital Index featured in this Report aims to provide a holistic assessment of a country’s human capital—both current and expected—across its population. It enables effective comparisons across regions, generations and income groups. The methodology behind the rankings is intended to serve as a basis for time-series analysis that allows countries to track progress, relative to their own performance as well as that of others.
By “human capital” we mean the knowledge and skills people possess that enable them to create value in the global economic system.1This focus has been chosen specifically so that the Index quantifies key concepts and provides a practical tool to policy-makers and business leaders.
There are several distinctive aspects to the notion of human capital as conceptualized and understood in this Report (Figure 1).
Figure 1: Elements of Human Capital
First, the Global Human Capital Index regards relevant skills as a dynamic asset people have and develop over time, not as innate talent that is fixed. This means people’s human capital in the form of relevant skills is likely to produce higher returns if invested in optimally, starting early in life, and may also experience depreciation if not kept current and developed continuously. Formal education enhances people’s capacity, and while applying and acquiring skills through work further develops people’s human capital. Therefore, maximizing opportunity for all entails lifelong access to acquiring education and skills and working-age access to deploying and developing skills through work.
Second, the Report’s understanding of human capital—and the scoring criteria of the Index—are based on the notion that it is neither through “cheap labour” nor through attracting a narrow set of the “best and the brightest” and winning a “war for talent” that countries can optimize their long-term human capital potential, but through building up deep, diverse and resilient talent pools and skills ecosystems in their economies that allow for inclusive participation in good quality, skilled jobs by the largest possible number of people.
Too many countries, especially in today’s developing economies, are still pursuing pathways to economic value creation based on “cheap labour” alone—that is, in the framework of the Index, by solely focusing on maximizing deployment of their people’s current human capital with little regard to skill diversification and acquiring more advanced know-how. The technological changes brought about by the Fourth Industrial Revolution entail a very real possibility of disrupting such economic development pathways beyond all viability. Conversely, economic value creation in a growing number of advanced economies is based on highly specialized know-how—but the jobs and sectors driving these trends risk leaving behind a growing share of the workforce.
Third, implicit in the above is an assumption by the Report of the intrinsic value of human productivity and creativity and a human-centric vision of the future of work that recognizes people’s knowledge, talents and skills as key drivers of a prosperous and inclusive economy. Even if, in the long term, technological and social changes should give rise to a world in which work and earning are not as closely tied as in the past through tools such as a basic income, equipping the largest possible number of people, regardless of age, gender or origin, with the know-how, skills and opportunity to contribute and thrive in such a technology-enabled, human-centric economy—in short: maximizing their human capital—ought to be, and remain, a top priority for business and policy leaders.
This Report consists of two parts. Part 1 of the Report contains three sections. Section one introduces the Global Human Capital Index and the core concepts underlying its methodology. Section two covers the overarching results of the Global Human Capital Index, paying particular attention to global trends and distinctive features of high-performing countries. This section also examines the results through the prism of regional and income groupings, placing countries’ performance in context. Section three reviews the results across the four thematic subindexes of the Index—Capacity, Deployment, Development and Know-how—and considers their variation by age group and generation. Specifically, this section explores generational gaps between the human capital outcomes of younger and older generations in the workforce and considers different strategies for expanding and nurturing human capital potential as well as hiring pools. This section of the Report also features a range of unique and illuminating data on the global human capital landscape obtained in collaboration from the Forum’s research partnership with LinkedIn.
Part 2 of the Report, provides detailed, indicator-level results and information for all countries included in the Index in the form of individual Country Profiles. The Report also includes a practical User’s Guide and an appendix with Technical Notes on the Index methodology. In addition, the Report website (http://reports.weforum.org/global-human-capital-report-2017) features an innovative Data Explorer tool, providing the possibility to compare countries as well as comprehensive ranking tables by age group, region and income group.
Because human capital is critical not only to the productivity of society but also to the functioning of its political, social and civic institutions, understanding its current state and capacity is valuable to a wide variety of stakeholders. It is our hope that this Report can support governments, businesses, education providers and civil society institutions in identifying key areas for focus and investment. All of these entities have a stake in human capital development, whether their primary goal is to power their businesses, strengthen their communities or create a population that is better able to contribute to and share in the rewards of growth and prosperity. The Report also aims to foster public-private collaboration between sectors, ultimately reframing the debate around employment, skills and human capital—from today’s focus on problems and challenges towards the opportunities for collaboration that fully leveraging the human capital potential residing in people’s skills and capacities can bring.
Measuring Global Human Capital
The Global Human Capital Index, revised in 2017, assesses the degree to which countries have optimized their human capital for the benefit of their economies and of individuals’ themselves. It is based on four underlying concepts and is constructed using four subindexes.