Results and Analysis
Long-term human capital investment and planning is not just crucial at the individual country level, but increasingly demands political leadership at the highest international level to move beyond zero-sum competition and prepare the world’s workforce for the challenges of the 21st century. Issues of global talent mobility and migration call for a coordinated approach to minimize risks and unlock opportunities for individuals and economies as a whole. Many education systems and skills accreditation standards remain primarily national in outlook. Moreover, equipping nations’ young and working-age populations with the education and skills to thrive in the Fourth Industrial Revolution will require collaboration beyond industry sectors and borders. The Human Capital Index seeks to serve as a benchmarking tool for such efforts so that various stakeholders are able to take better-informed decisions.
Detailed results for all 130 countries ranked by the Index are shown in Table 1. The appendix provides a full overview of the structure of the Human Capital Index. Please refer to the Report website, for comprehensive ranking tables by age group, regional group and income group. Also available on the Report website are individual Country Profiles providing detailed, indicator-level results and information for all countries included in the Index, as well as a Country Profile User’s Guide and Technical Notes on the Index methodology.
This year’s edition of the Human Capital Index sees no new entrants or dropouts to its top 10 list, although there are some notable rank changes. The Index continues to be dominated by smaller European countries, particularly the Nordics and Benelux states, with two countries from the East Asia and the Pacific region and one country from the North America region also making the cut. The leaders of the Index are high-income economies that have placed importance on high educational attainment and putting a correspondingly large share of their workforce in high-skilled occupations.
The top three remains unchanged from last year, with Norway (2) and Switzerland (3) almost drawing level this year and gaining ground on Finland’s (1) top position. All three countries are effectively developing and utilizing about 85% of their full human capital potential.
For the second year running, Finland (1) is the best-performing country in the world when it comes to building and leveraging its human capital potential, taking the top spot on the 0–14, 15–24 and 25–54 Age Group pillars, and scoring in the top 10 for the remaining age groups. The country benefits from a well-educated young population with a near-universal basic education survival rate and the highest score for the quality of primary schools. Its 25–54 age group core working population shows the highest tertiary educational attainment rate in the Western Europe region and fourth best overall in the world. Based on the World Economic Forum’s Executive Opinion Survey, Finland is also the country with the overall highest score on the Ease of finding skilled employees indicator, with even its 55-64 and 65 and over age groups possessing the world’s third highest attainment rate of tertiary education, highlighting the continuing long-term benefits of past human capital investments.
Norway (2) follows Finland in second place on the overall Index with a strong performance across all age groups, although it does not make it into the top 10 in the 0–14 Age Group pillar. The country possesses similar strengths as its Nordic neighbour and also the lowest unemployment rate in the Western Europe region for its 25–54 prime working age group.
The top three is completed by Switzerland (3), which benefits from the very high quality of its primary schools and of the education system as a whole—ranking first in the world this year on the latter—but also from a strong rate of vocational training and high level of skill diversity. Switzerland is also the best performing country on the Staff training, third best on the Economic complexity and third best in the world on the High-skilled employment share indicators.
Japan (4) rises one rank in this year’s Index on the back of its strong performance in the 55–64 and 65 and Over Age Group pillars—taking the top spot on both and boosted by the longevity and education of its older population. However, the country is held back by relatively low labour force participation in the prime working age group, in particular due to the country’s employment gender gap. It has achieved near-universal basic education and has a tertiary education attainment rate of over 50% for its working age population, ranking it first in the world. With the world’s highest aged-dependency ratio and second-highest healthy life expectancy, there is greater potential to be tapped by closing the gender gap and tapping into the skills of the older workforce, particularly as labour force participation falls from 85% in the 25–54 Age Group to 71% for the 55–64 Age Group.
New Zealand (6), the other country in the top 10 from the East Asia and the Pacific region, rises three ranks this year and places in the top 10 for all age groups except for the 25–54 Age Group pillar, due in particular to a comparatively lower Economic complexity indicator score and labour force participation rate. It ranks second on the 55–64 Age Group pillar due to its high educational attainment and the age group’s active participation in the labour force.
Sweden (5) also rises one rank in this year’s Index, slightly outperforming its neighbour Denmark (7), although both countries have strong results across all age group pillars.
The Netherlands (8) and Belgium (10) maintain their respective rankings. Both countries have strong scores in the younger age group pillars but are penalized by relatively low labour force participation and a relatively high unemployment rate among the 55–64 and 65 and over age groups, despite strong health and education results.
Canada (9), the only North American country in the top 10, drops five ranks this year—due to a multi-year data update concerning the country’s 15-24 Age Group pillar—but maintains a strong showing particularly in the three older age groups. With the world’s highest tertiary education attainment rates in the 55–64 and 65 and over age groups, a 65 and over age group labour force participation rate of 14%, and a healthy life expectancy above 70, Canada enables older workers who choose to remain active to do so, pointing to a high-skilled and productive ‘silver’ workforce in the country.
While the Index demonstrates that many smaller economies perform exceptionally well with regard to nurturing and deploying their human capital potential—in fact dominating the top 10 of the Index—a sizeable share of the global workforce lives and works in a comparatively small number of major economies. Between them, the countries featured in this section of the Report make up 75% of the world’s population and contribute 85% of global gross domestic product (GDP). Like the wider geographic regions in which they are located, these countries exhibit a broad range of overall success in leveraging their human capital potential.
Following Japan (4) and Canada (9), Germany (11) and Singapore (13) are two notable risers in this year’s Human Capital Index on the back of strong performances on staff training, high rates of high-skilled employment and economic complexity, low rates of young people not in employment, education or training (NEET) and high healthy life expectancy among their older populations. While Germany ranks high on the Skill diversity (8th) indicator and the overall quality of its education system, it is held back by a low ranking on its basic education survival rate (89th). Both countries are tapping about 80% of their human capital potential.
Though France (17) performs strongly on the core working age 25-54 Age Group pillar (12th), it suffers from a high youth unemployment rate (placing it 95th in the world) and a 35% drop in labour force participation between the 25–54 and 55–64 age ranges. It is immediately followed in the Index by Australia (18), which ranks 5th in the world on the 15–24 Age Group pillar due to high tertiary enrolment rates and low numbers of young people not in employment, education or training. More than 90% of its employment share is in medium- and high-skilled occupations.
The United Kingdom (19) exhibits a high tertiary attainment rate (33%) and high-skilled employment share (48%) for its 25–54 core working age group, but ranks 46th on the Incidence of overeducation indicator and 33rd for its vocational enrolment rate, indicating that there might be room for improvement with regard to recognizing alternative education paths.
The United States (24) trails Europe’s three biggest economies largely due to relative weaknesses in primary and secondary enrolment rates and the quality of primary education. However, the United States also records an impressive tertiary enrolment rate (4th globally), a continuation of the high proportion of those who already attained tertiary education across the country’s older
The Russian Federation (28), too, benefits from very high levels of primary, secondary and tertiary education attainment across all of its age groups, but has a low healthy life expectancy of only 61 years (86th globally) and underperforms with regard to the employment dimension.
Korea, Rep. (32) ranks second in the world for its near-universal tertiary enrolment rate. Unlike for the other top performers in the East Asia and Pacific region, however, business perceptions of the overall quality of its education system are undistinguished (59th), and the country also ranks comparatively low in the ease of finding skilled employees and its labour force participation rate, due in part to a rather large employment gender gap. Like the major economies ranked ahead of it, the Republic of Korea scores in the mid-70% range of the Index.
Italy (35) is held back by a low youth labour force participation rate (123rd) and high youth unemployment rate (122nd) for its 15–24 Age Group pillar, and scores poorly on the quality of its on-the-job staff training (119th). The country does, however, perform rather better on the secondary enrolment and basic education survival rates of its younger 0–14 age group as well as on the skill diversity of its graduates. Spain (45), shares the overall human capital profile of its Mediterranean neighbours and reports the second highest 15–24 age group unemployment rate measured in the Index (53.2%), despite its exceptionally high level of graduates’ skill diversity (1st globally).
Several of Latin America’s major economies are in the mid-range of this year’s Index. Chile (51) benefits significantly from a well-educated and healthy older population that remains economically active well into the age of 55–64, compared to other countries in the region. Its 25–54 prime working age group also boasts the highest tertiary education attainment rate in Latin America (10th globally), with one in three people in this age group having completed university. In line with this, Chile’s 15–24 age group continues to have a very high university enrolment rate (8th), with a diverse range of subjects studied. Argentina (56) shares the former’s high tertiary enrolment rate. Both countries, however, also exhibit a rather high unemployment rate in the 15–24 age group.
Colombia (64), performs best when it comes to the educational attainment and tertiary and vocational enrolment of its 15–24 age group. However, the country also exhibits a big skills mismatch, with one in three 15–24 year-old Colombians currently classified as overeducated for their work. The country comes in one rank ahead of Mexico (65), which rounds out the better-performing countries in the region, although with some distance behind the top group. This is mostly due to a relatively less well-educated population across all age pillars. More positively, Mexico reports a relatively low level of unemployment, even among its youth. Both countries are falling just short of maximizing 70% of their human capital potential.
The United Arab Emirates (69) ranks well ahead of other major economies in the Middle East and North Africa region, benefitting significantly from the strong perceived quality of its primary schools (13th) and overall education system (12th); but it also reports some of the lowest tertiary and vocational enrolment rates in the Index in the 15–24 age group.
China (71) similarly ranks in the mid-range of the overall Index scores, well ahead of the other BRICS nations except for the Russian Federation. Its younger population fares significantly better than its 55–64 and 65 and over age groups as a result of increasing educational attainment in the population. It also scores comparatively well on the Ease of finding skilled employees (39th), Vocational enrolment (29th) and Economic complexity (18th) indicators, setting the country up well for the future.
Rounding off the upper midfield of the Index with scores in the high 60% range are Indonesia (72), which has exhibited a rapid expansion of educational attainment similar to China across its younger age groups and good grades for local staff training (31st globally), and Turkey (73), which has strong tertiary and vocational enrolment rates among its 15–24 age group. Both countries are held back, however, by comparatively low labour participation rates for their 25–54 prime working age population (ranking 100th and 120th, respectively), due in large part to significant employment gender gaps.
Brazil (83), the Latin American region’s largest economy, ranks in the lower half of the Index, with a poor performance on the Basic education survival rate (98th) and Quality of primary education (118th) indicators for its 0–14 age group in particular. Local businesses perceive it as very difficult to hire skilled employees (114th), although the country scores comparatively better on the quality of its on-the-job staff training and a low unemployment rate for its core 25–54 and older age groups.
Egypt (86) and Saudi Arabia (87), the Middle East and North Africa region’s two most populous economies, are nearly tied in the Index. While Egypt ranks somewhat better on vocational enrolment, the overall quality of Saudi Arabia’s education system (42nd) is perceived as much better than Egypt’s (126th), which ranks near the bottom on this indicator. Both countries suffer from high youth unemployment rates and have high employment gender gaps, despite good rankings for tertiary enrolment and attainment and skill diversity, pointing to both countries’ additional untapped human capital potential.
Immediately following is South Africa (88), the Sub-Saharan African region’s second largest economy. The country has the highest share of its workforce in high-skilled occupations on the continent (49th overall). However, based on business executives’ perceptions in the country, South Africa is ranked 101st for its ease of finding skilled employees and also receives poor marks for the quality of its education system (125th) and struggles with achieving universal primary and secondary school enrolment. While staff training in the country is well regarded (19th globally), the country ranks third in the region overall, four ranks behind Ghana (84), with an overall human capital score in the lower 60% range.
India (105) ranks at the top of the bottom quartile of the Index. Although the country’s educational attainment has improved markedly over the different age groups, its youth literacy rate is still only 90% (103rd globally), well behind the rates of other leading emerging markets. India also ranks poorly on labour force participation, due in part to one of the world’s largest employment gender gaps (121st). More positively, it receives solid rankings on Quality of education system (39th), Staff training (46th) and Ease of finding skilled employees (45th) indicators, suggesting a primary avenue for improvement for the country consists in expanding access to its numerous learning and employment opportunities.
Joining India at the bottom-range of the Index are South Asia’s two other most populous nations, Bangladesh (104) and Pakistan (118), due to poor performances on educational outcomes throughout all the Age Group pillars, and despite a comparatively high tertiary attainment rate among the former’s older population.
The lowest-ranked major economy in the Index—ranked fourth from the bottom, ahead only of Chad, Yemen and Mauritania—is Nigeria (127), Sub-Saharan Africa’s largest economy and most populous country. It suffers from the second lowest primary school enrolment rate globally (65%), and a high incidence of child labour. At 15%, the tertiary attainment rate (65th overall) of its 25–54 age group is a relative highlight, as are the business perceptions of the quality of its staff training (59th).