An overview of Human Capital Index

An Overview of Human Capital Index

1. WEL COME 1

2. SEMINAR -I AN OVERVIEW OF HUMAN CAPITAL INDEX Presented By : Shrikantha T Mulimani PALB -3139 Sr.M.Sc ( Agri ) in AgMaco 2

3. Flow of Presentation INTRODUCTION ECONOMIC PERSPECTIVE OF HUMAN CAPITAL ROLE OF HUMAN CAPITAL FORMATION SOURCES OF HUMAN CAPITAL FOUR PILLARS OF HUMAN CAPITAL HUMAN CAPITAL INDEX FOR TOP TEN COUNTRIES STATUS OF HUMAN CAPITAL IN INDIA PROBLEMS OF HUMAN CAPITAL IN INDIA CONCLUSION REFERENCE 3

4. Introduction Human capital collectively represent the wealth of an individual or business. Human capital  is the stock of knowledge, habits, social and personality attributes, embodied in the ability to perform labour so to produce economic value. 4

5. Economic Perspective of Human Capital Economic perspective of Human Capital Refers to factors of production used to create goods or services. Thus, human capital is one of production elements which generate added-values. 5

6. Definition of Human Capital Theodore W. Schultz Human capital as knowledge and skills obtained by people as capital in the process of vocational and technical education. Such a capital is a product of well considered investments and it generates income. 6

7. Role of Human Capital Formation Increases production - Knowledgeable , skilled , qualified persons can contribute their maximum to the economy. They can increase production through optimum utilization of resources . Increases productivity – It promotes innovations , creativity and new technology so that maximum possible time and cost. 7

8. Role of Human Capital Formation Improve quality of life : Human capital formation focuses on quality of population , better the quality of population more will be the economic growth and development . Creates positive attributes – People with positive attributes are more open to creativity and innovations and are rational in their decision making . 8

9. Sources of Human Capital Education Health On-the-Job-Training Migration Information 9

10. Spending on education by individuals is similar to spending on capital goods by companies with the objective of increasing future income over a period of time. Likewise, individuals invest in education with the objective of increasing their future income. Education 10

11. Health Health is important for the development of an individual. Medicines, provision for clean drinking water and good sanitation are various forms of health expenditures. Health expenditure directly increases the supply of healthy labor force a source of human capital formation. 11

12. On-the-Job-Training Firms spend on on -the job-training to their workers, this may take different forms. The workers may be trained in the firm itself under the supervision of a skilled worker. The workers may be sent for off-campus training. Expenditure regarding on-the-job training is a source of human capital formation as the return of such expenditure in the form of enhanced labor productivity is more than the cost of it. 12

13. Migration People migrate in search of jobs that fetch them higher income than what they may get in their villages. Engineers and doctors, migrate to other countries because of higher salaries. The enhanced earnings in the new place outweigh the costs of migration; hence, expenditure on migration is also a source of human capital formation. 13

14. Information People spend money to acquire information relating to the labour market including education and health. This is necessary to make decisions regarding investments in human capital as well as for efficient utilization of the acquired human capital stock. Expenditure incurred for acquiring information relating to the labour market and other markets is also a source of human capital formation. 14

15. The Education pillar contains indicators relating to quantitative and qualitative aspects of education across primary, secondary and tertiary levels and contains information on both the present workforce as well as the future workforce. The Health and Wellness pillar contains indicators relating to a population’s physical and mental well– being, from childhood to adulthood. The four pillars of human capital 15

16. The Workforce and Employment pillar is designed to quantify the experience, talent, knowledge and training in a country’s working–age population. The Enabling Environment pillar captures the legal framework, infrastructure and other factors that enable returns on human capital. The four pillars of human capital 16

17. Sub-Pillar Indicator Weight 1. Access Primary enrolment rate (%) 2.08 Secondary enrolment rate (%) 2.08 Tertiary enrolment rate (%) 2.08 Education gender gap 2.08 2. Quality Internet access in schools 2.08 Quality of education system 2.08 Quality of primary schools 2.08 Quality of math and science education 2.08 Quality of management schools 2.08 3. Attainment Primary education attainment (% population age 25+) 2.08 Secondary education attainment (% population age 25+) 2.08 Tertiary education attainment (% population age 25+) 2.08 Total Pillar Weight 25.00 Table 1: Education Sub Pillars and Indicator Weights 17 Source : Human Capital Index 2013.

18. Sub-Pillar Indicator Weight 1. Survival Infant mortality (per 1.000 live births) 1.79 Life expectancy 1.79 Survival gender gap 1.79 2. Health Stunting and wasting (% in children under 5) 1.79 Unhealthy life year (% of life expectancy) 1.79 Deaths under 60 from non-communicable diseases 1.79 Obesity (% of adults with BMI ≥30) 1.79 Business impact of non-communicable diseases 1.79 Business impact of communicable diseases 1.79 3. Well-being Stress (% of respondents) 1.79 Depression (% of respondents) 1.79 4. Services Water sanitation and hygiene 1.79 Healthcare quality 1.79 Healthcare accessibility 1.79 Total Pillar Weight 25.00 Table 2: Health and wellness sub pillars and indicator weights 18 Source : Human Capital Index 2013.

19. Table 3: Workforce and employment sub pillars and indicator weights Sub-Pillar Indicator Weight 1. Participation Labour force participation rate, age 15-64 (%) 1.56 Labour force participation rate, age 64+ (%) 1.56 Economic participation gender gap 1.56 Unemployment rate 1.56 Youth unemployment rate 1.56 2. Talent Country capacity to attract talent 1.56 Country capacity to retain talent 1.56 Ease of finding skilled employees 1.56 Pay related to productivity 1.56 Capacity for innovation 1.56 Index of economic complexity 1.56 Firm level technology absorption 1.56 Scientific and technical journal articles 1.56 Median age of the working population 1.56 3. Training Staff training 1.56 Training Services 1.56 Total Pillar Weight 25.00 19 Source : Human Capital Index 2013. .

20. Sub-Pillar Indicator Weight 1. Infrastructure Mobile users 2.78 Internet users 2.78 Quality of domestic transport 2.78 2. Collaboration State of cluster development 2.78 Business and university R&D collaboration 2.78 3. Legal framework Ease of doing business 2.78 Social safety net protection 2.78 Intellectual property protection and property rights 2.78 4. Social mobility Social mobility 2.78 Total Pillar Weight 25.00 Table 3: Enabling environment sub pillars and indicator weights Source : Human Capital Index 2013. 20

21. Overall index Education Health and wellness Workforce and employment Enabling environment sl. Country no Rank Score Rank Score Rank Score Rank Score Rank Score 1. Switzerland 1 1.455 4 1.313 1 0.977 1 1.736 2 1.793 2. Finland 2 1.406 1 1.601 9 0.844 3 1.250 1 1.926 3. Singapore 3 1.232 3 1.348 13 0.762 2 1.345 5 1.471 4. Netherlands 4 1.161 7 1.106 4 0.901 8 1.150 4 1.484 5. Sweden 5 1.111 14 0.977 2 0.960 6 1.154 10 1.351 Table 4: The Human Capital Index for Top Ten Countries (2013) 21 Source : Human Capital Index 2013.

22. Overall index Education Health and wellness Workforce and employment Enabling environment Sl. Country no Rank Score Rank Score Rank Score Rank Score Rank Score 6. Germany 6 1.109 19 0.888 8 0.877 9 1.149 3 1.522 7. Norway 7 1.104 15 0.970 6 0.890 5 1.182 8 1.373 8. United Kingdom 8 1.042 10 1.031 17 0.682 10 1.072 7 1.384 9. Denmark 9 1.024 18 0.891 3 0.943 12 0.932 11 1.330 10. Canada 10 0.987 2 1.355 20 0.548 15 0.875 17 1.168 11 . India 78 -0.270 63 0.020 112 -0.868 49 0.005 67 -0.239 Source: Human Capital Index 2013. Table 5: The Human Capital Index for Top Ten Countries (2013) 22

23. Source : Human Capital Index 2013. Fig. 1 : Countries Coverage of the Human Capital Index in the World (2013) 23

24. Fig. 2 : Regional performance on the Education pillar in the World 24 Source : Human Capital Index 2013.

25. Fig. 3 : Regional Performance on the Health and Wellness pillar in the World 25 Source : Human Capital Index 2013 .

26. Fig. 4: Regional Performance on the Workforce and Employment Pillar in the World 26 Source: Human Capital Index 2013.

27. Fig. 5 : Regional Performance on the Enabling Environment Pillar in the World 27 Source : Human Capital Index 2013.

28. Fig. 6 : Regional Performance on the Human Capital Index in the World Source : Human Capital Index 2013 28

29. Low income Lower-middle income Upper-middle income High income Rank country score Rank country score Rank country score Rank country Score 81 kenya -0.306 50 Sri L anka 0.020 22 Malaysia 0.644 1 Switzerland 1.455 92 Kyrgyz Republic -0.440 53 Indonesia 0.001 35 Costa Rica 0.320 2 Finland 1.406 96 cambodia -0.505 63 Ukraine -0.124 42 Panama 0.207 3 Singapore 1.232 103 Malawi -0.629 66 Philippines -0.161 43 China 0.186 4 Netherlands 1.161 104 Tanzania -0.680 70 Vietnam -0.202 44 Thailand 0.158 5 Sweden 1.111 105 Madagascar -0.725 73 Armenia -0.218 45 Kazakhstan 0.124 6 Germany 1.109 106 Uganda -0.727 77 Georgia -0.258 47 Mauritius 0.099 7 Norway 1.104 110 Bangladesh -0.782 78 India -0.270 52 Jordan 0.005 8 United Kingdom 1.042 Table 6 : Rankings by Different Income Groups of the World Source: Human Capital Index 2013. 29

30. Human Capital Index 2013 Rank/122 score Overall Ranking 78 -0.270 Education 63 0.020 Health and wellness 112 -0.868 Workforce and employment 49 0.005 Enabling environment 67 -0.239 Table 7 : India Rankings of Human Capital Index (2013) Source : Human Capital Index 2013. 30

31. Fig. 7 : Spread of Scores for Human Capital Index for India and Asia Pacific (By Pillar And Overall) Source: Human Capital Index 2013. 31

32. Fig. 8 : Relationship between the Human Development Index and Human Capital Index in the world Source : Human Capital Index 2013 32

33. Figure 9: Relationship between Global Competitiveness Index and Human Capital Index In the World Source : Human Capital Index 2013. 33

34. Fig. 10 : Relationship between GDP per capita and Human Capital Index in the World Source: Human Capital Index 2013. 34

35. Fig. 11 : Relationship between the Global Gender Gap Index and Human Capital Index in the World Source: Human Capital Index 2013. 35

36. 36 1 3 2 4 5 Source: Karnataka Human Development Report 2005 Fig. 12 : The Human Development Index for top five districts of Karnataka (2001)

37. District Indicator HDI Health Education Income Index Rank Index Rank Index Rank Value Rank Bangalore Urban 0.705 5 0.887 1 0.666 1 0.753 1 Dakshina Kannada 0.707 3 0.823 4 0.636 2 0.722 2 Udupi 0.713 1 0.842 2 0.588 5 0.714 3 Kodagu 0.638 18 0.833 3 0.621 3 0.697 4 Shimoga 0.707 4 0.766 6 0.547 10 0.673 5 Source : Karnataka Human Development Report 2005 Table 8 : The Human Development Index for top five districts of Karnataka (2001) 37

38. Table 9 : Five top and bottom ranking districts in HDI: 2001 and 1991 Source : Karnataka Human Development Report 2005 38

39. Problems of Human Capital in India Increase in population Flawed investment in education Lack of health facilities Lack of on the job training 39

40. Conclusion The Human Capital Index seeks to create greater awareness among a global audience of human capital as a fundamental pillar of the growth, stability and competitiveness of nations. Human Capital is the backbone of Human Development and economic development in every nation. Human Capital need motivation to raise their value and performance. 40

41. Reference http://en.wikipedia.org/wiki/Human capital http://www3.weforum.org. frcatel.fri.uniza.sk/ hrme /files. Karnataka Human Development Report 2005 http://reports.weforum.org/human-capital-index-2013. 41

42. Thank You 42