Results by Region and Income Group
The Human Capital Index shows that all countries can do more to nurture and fully utilize their human capital potential. Across the Index, there are only 19 nations that have tapped 80% of their human capital potential or more. In addition to these 19 countries, 40 countries score between 70% and 80%. A further 38 countries score between 60% and 70%, while 28 countries score between 50% and 60% and five countries remain below 50%.
At a global level, only one region—North America—narrowly passes the 80% threshold. Two regions—Western Europe and Eastern Europe and Central Asia—score in the 70% to 80% range and three others—East Asia and the Pacific, Latin America and the Caribbean, and the Middle East and North Africa—in the 60% to 70% range. Two regions—South Asia and Sub-Saharan Africa—have not yet crossed the 60% average threshold. However, as illustrated in Figure 2, there is a wide variety of effective human capital utilization in every world region, with both success stories and underperforming countries in each.
East Asia and the Pacific
East Asia and the Pacific, jointly with South Asia the world’s most populous region, scores towards the middle of the range of the Human Capital Index results, with an overall average score of 69.75. The gap between the best and worst performers in the East Asia and the Pacific region is the second largest of any region, reflecting in part the different stages of economic development of the 15 countries from the region covered in the Index, but also the varying degrees of human capital outcomes even between countries with similar income. Scores for the region’s 0–14 Age Group pillar are much higher relative to other pillars, reflecting the region’s remarkable progress between generations.
The best-performing countries in the region, such as Japan (4), Singapore (13) and the Korea, Rep. (32) are global strongholds of human capital success, while countries such as Cambodia (100), Lao PDR (106) and Myanmar (109) trail the region despite a relatively solid performance relative to their income levels. ASEAN economies such as Malaysia (42) and the Philippines (49) are not too far behind their northern neighbours, while China (71) scores near the regional and overall Index average with regard to its human capital performance.
Over half of the countries in the region have achieved near-universal primary school enrolment rates; yet, on average, over 20% of the region’s 0–14 age group is not enrolled in secondary education. Among its 25–54 age group core working population, the average labour force participation rate is 83%. Singapore (13) has the highest proportion of high-skilled employment, at 55% of its workforce (2nd in the world), with a regional average of 22%. The region includes five countries that are ranked in the top 10 for the highest healthy life expectancy.
Eastern Europe and Central Asia
The Index covers 22 countries from Eastern Europe and Central Asia. At an overall average score of 75.02, the region ranks in third place globally, after North America and Western Europe. It includes several remarkable success stories with regard to successful human capital potential maximization, including Estonia (15) and Slovenia (16), which both score above the 80% threshold, and the Czech Republic (25), Ukraine (26), the Russian Federation (28), Kazakhstan (29) and Poland (30), which all score within the top 30. Ukraine’s performance is particularly remarkable relative to its GDP per capita levels.
Most countries in the region are close to having achieved near-universal basic education enrolment; however, some, such as Macedonia, FYR (59) and Romania (38), still lag behind. The bottom-ranked countries in the region, Moldova (63) and Albania (70), are also held back by the persistence of issues such as child labour.
In general, countries in the Eastern Europe and Central Asia region benefit from formally well-educated older populations—a legacy of the region’s former heavily state-led school systems—but underperform with regard to labour force participation. Several countries in the region also have a relatively low healthy life expectancy.
Latin America and the Caribbean
The 24 countries ranked by the Index in the Latin America and the Caribbean region score in the middle range of the Index—just behind the East Asia and the Pacific region—with an overall average score of 66.95. However, scores for the region’s 65 and Over and 55–64 Age Group pillars tend to be much higher than for their peers in the East Asia and the Pacific region; are practically tied between the regions for the 25–54 age group; and lag behind the East Asia and the Pacific region’s younger population in terms of its human capital performance. To some extent, this hints at the rise of East Asia and some missed opportunities in the Latin America and the Caribbean region.
With the exception of Cuba (36) and Haiti (111), the gap between the best and worst performers in the region is much smaller than for any other region. The better performing countries in the region, such Chile (51) and Argentina (56), seem to share similar strengths and weaknesses, passing the 70% overall human capital maximization threshold. By contrast, Brazil (83) somewhat lags behind the regional average.
Several countries in the region have not yet achieved universal primary school enrolment, while, on average, 20% of the region’s children do not finish basic education. On the plus side, there is no observable gender gap in education. Many countries in the region are facing high youth unemployment rates in the 15–24 age group. More positively, unemployment in the 25–54 core working age group tends to be in the single digits, and high-skilled employment is in the range of 20%. Labour force participation in the region begins to decline markedly for the 55–64 age group, while at the same time there is also a relatively large share of people in the 65 and over age group that continues to work past their countries’ years of healthy life expectancy, indicating some challenges with the region’s social welfare net.
The bottom ranks of the region are made up of Venezuela (89)—whose performance is particularly disappointing in light of its level of economic development—and the group of Central American nations, such as Honduras (93), where incomplete primary education and child labour remain a problem.
Middle East and North Africa
The Middle East and North Africa region comprises 15 countries that had enough data for coverage in the Index. Out of these, only one—Israel (23)—makes it into the top 30 of the Index. The gulf states, Bahrain (46), Qatar (66), and the United Arab Emirates (69), outperform the rest of the region in terms of making the best use of their human capital potential and score in the mid-range of countries ranked in the Index overall. However, relative to their income levels these countries have additional opportunities to further boost their human capital performance.
The North African nations, Morocco (98), Tunisia (101) and Algeria (117), make up the lower end of the regional rankings, ahead of Yemen (129) and Mauritania (130).
The Middle East and North Africa is one of the most disparate regions in the Index—spanning three income group levels and ranging in age group average scores from those that are in line with other high-income economies in Western Europe and elsewhere to those more in line with the worst-performing countries in Sub-Saharan Africa. For example, Saudi Arabia (87), whose GDP per capita is nearly fivefold higher, performs at a comparable level to Egypt (86), highlighting that economic factors alone are an inadequate measure of a country’s ability to successfully leverage their human capital potential. While the region’s overall average score of 61.54 masks some of these significant differences in countries’ circumstances, it also points to opportunities for countries to learn from one other across the region.
Several critical issues affect the 0–14 age group in certain countries in the Middle East and North Africa region. Gender gaps in secondary school participation and high incidence of child labour in some countries of the region risk leaving a lasting impact on the workforce of the next generation. Youth unemployment continues to be widespread among the 15–24 age group in the region, reaching its highest levels at 33% in Jordan (81) and 38% in Tunisia (101). Additionally, due to low rates of female participation, the region’s 25–54 prime working age group exhibits some of the lowest labour force participation rates in the Index.
With an average score of 80.41, North America is the strongest regional performer on the Human Capital Index, with Canada (9) ranking in the top 10. The United States (24) lags behind its northern neighbour on the 0–14 Age Group pillar, revealing 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). In both Canada and the United States this trend is a continuation of the high proportion of those who have already attained tertiary education across the older age groups.
In both countries, more than 40% of the 25–54 age group is employed in high-skilled occupations (ranking 16th and 22nd, respectively), with the United States (24) trumping Canada (9) in economic complexity by leveraging more sophisticated knowledge and skills. Despite strong results in education outcomes, labour force participation indicators across all Age Group pillars rank in the middle range of the Index. However, with a 65 and over age group labour force participation rate of 14% and 19%, respectively, and a healthy life expectancy above 70, the region has a relatively high-skilled and productive ‘silver’ workforce.
The Index covers six countries from the South Asia region: Sri Lanka (50), Bhutan (91), Bangladesh (104), India (105), Nepal (108) and Pakistan (118). The overall average score for the region is 59.92—behind the Middle East and North Africa and ahead of Sub-Saharan Africa—and all but the top two have yet to reach the 60% threshold with regard to optimizing their human capital potential.
The bright spot for the region, Sri Lanka (50), benefits from strong educational enrolment and basic education completion rates as well as positive perceptions of the quality of its primary schools and education system overall (23rd on both). However, it underperforms when it comes to translating the potential of its young population to the workforce, with one in four young people not active in employment, education or training.
The region’s most populous countries—Bangladesh (104), India (105) and Pakistan (118)—are held back by insufficient educational enrolment rates and poor quality primary schools. The youth literacy rate in the three countries stands at 83%, 89% and 75% respectively, far behind other emerging markets as well as their own lower-middle income group’s average. All three countries’ educational performance is somewhat better at the tertiary level, despite rather low levels of skill diversity among their university graduates, indicating a strong specialization in a limited number of academic subjects. All three countries also exhibit significant employment gender gaps, exacerbating the difficulty of finding skilled employees, which is ranked low in all countries except India, which ranks 45th on this indicator.
On the Sub-Saharan African continent a cluster of countries, including Mauritius (76), Ghana (84), South Africa (88) and Zambia (90) score in the 60–70% range with regard to their effective overall human capital potential utilization—placing them ahead of the Middle East and North Africa regional average and on a par with the lower half of the Latin American and East Asia and the Pacific regions. Other economies, however, such as Ethiopia (119) and Nigeria (127) face a range of human capital challenges, including low survival rates for basic education. With an overall average score of 55.44, the Sub-Saharan African region is the lowest-ranked region in the Index.
In total, the Index covers 26 countries from the region, of which five are from the upper-middle income group, eight from the lower-middle income group and the remaining 13 from the low-income group. Despite this high regional diversity the Sub-Saharan African region exhibits a number of similar patterns across all age groups.
Ghana (84) and Zambia (90) owe their comparatively strong performance in large part to the significantly improved educational attainment of its younger generations. However, both countries still have room for further improvement in primary school enrolment and even more so with regard to Ghana’s 21% and Zambia’s 40% incidence of child labour—some of the worst in the region and globally.
Uganda (99) illustrates a number of trends that are also shared by its East African neighbours Kenya (102), Rwanda (110) and Tanzania (116). With a very low NEET rate as well as low tertiary enrolment, the majority of Uganda’s 15–24 age group has an early start into the workforce, having a high labour force participation rate (4th globally). The possible downside to this is indicated by the country’s 73% incidence of undereducation, the second highest measured in the Index. Encouragingly, there has been an increase in vocational enrolment in recent years.
The region has high labour force participation in the 65 and over age group, with all but four countries ranked in the top 30. Yet given the age group’s low educational attainment and a healthy life expectancy below 60 years for all countries in the region except Mauritius, this almost certainly reflects activity due to economic necessity and lack of an adequate welfare or pension system. Before discounting this observation as a pure negative, however, it should be noted that this older generation nevertheless continues to provide its younger peers with its knowledge and experience.
Rankings in Western Europe are dominated by the Nordic and Benelux countries—Finland (1), Norway (2), Sweden (5), Denmark (7), Netherlands (8) and Belgium (10)—as well as Switzerland (3)—which collectively take the region’s top spots. Finland’s performance is particularly remarkable, given the much higher GDP per capita levels of the region’s two runners-up.
Germany (11), France (17) and the United Kingdom (19) make up the mid-range of the regional league table, and the Mediterranean countries—Italy (34), Portugal (41), Greece (44) and Spain (45)—the bottom ranks.
The overall average score of the region is 79.86, the second highest after North America, and 12 out of the 20 Western European countries covered by the Index have crossed the threshold of effectively utilizing at least 80% of their full human capital potential. The region shows fairly high homogeneity in human capital in contrast to regions such as East Asia and the Pacific or Middle East and North Africa.
Generally, most of the region is performing below the world average for the 15–24 Age Group pillar on four indicators: Labour force participation rate, Unemployment rate, Long-term unemployment rate and Incidence of overeducation, highlighting some of the structural challenges facing the region. The Mediterranean countries, in particular, continue to be affected by high levels of youth unemployment—reaching 52% in Greece (44) and 53% in Spain (45), the third and second highest rates measured in the world—but also by high levels of unemployment among the 25–54 prime working age group. About half of the youth unemployment in both countries is long term, risking a lasting impact on the workforce of the next generation. More positively, the long-term human capital potential of the Western Europe region is nevertheless substantial, encompassing a well-educated older population with high tertiary attainment among its 55–64 Age Group as well as a high healthy life expectancy.
Hosted in 2016 by China, the G20 group of countries continues to place efforts to promote and deploy human capital high on its agenda. The private sector, too, continues its efforts under the umbrella of the B20 Employment Taskforce.7 Among the G20, Japan (4) is the country with the highest human capital performance, followed by Canada (9) and Germany (11). Saudi Arabia (87), South Africa (88) and India (105) make up the lower ranks of the group. With a group average score of 73.09 the G20 as a whole has ample opportunity to learn from each other’s diversity of experiences across member states. Six of the G20 countries are effectively utilizing 80% of their human capital potential or more, five are scoring in the 70% to 80% range and seven are scoring in the 60% to 70% range. Japan (4), the highest-ranked country, has maximized 26 percentage points more of its human capital potential than India (105), the lowest-ranked one.
The 28 member states of the European Union collectively achieve a group average score of 78.48, with 12 member states passing the 80% threshold and 16 member states making use of 70% to 80% of their full human capital potential. With the Nordics and Benelux states making up the top five, Germany (11) and Austria (12) are the highest-ranked countries behind the top group. The highest-scoring new members states are Estonia (15) and Slovenia (16), taking 9th and 10th place in an EU-only ranking, behind Ireland (14) and ahead of France (17). The other new member states make up the lower half of the European Union human capital league table, marginally ahead of Greece (44) and Spain (45). Despite generally strong overall human capital performances, many European Union countries are experiencing structural difficulties with regard to high youth unemployment. Perceptions also vary regarding the quality of member states’ education systems, staff training and ease of finding skilled employees (median rank: 42nd). In June 2016 the European Union launched a new Skills Agenda for Europe, stating that “90% of all jobs will soon require some level of digital skills; yet, today, 40% of Europeans have none.”8