What is human capital?

What is the essence of the concept of "human capital"?

No matter how developed a state is, at whatever level its economy and NTP is, all this would not have been possible without the most important element of all processes - man. In the advanced countries of the world, more and more development in the economic and social spheres of life is accompanied byhuman capitalstrengthening the role of the human factor. When the resource base is exhausted, the human resource becomes the key point that ensures the further development of the economy. The scientific literature presents a huge variety of interpretations of this category, which can be summarized into one: human capital is the totality of all acquired knowledge, experience, skills and health of a person, which he applies in his professional activity. This concept does not mean the number of people involved in the production, as many think.

human capital investmentScience Responses

Realizing the importance of this factor, many scientists of the world decided to understand the basic principles on which the theory of human capital should be based.Many different options were offered, each of which had the right to exist. At the heart of the modern understanding of the concept of human capital are the provisions put forward by Nobel Prize winner G. Becker. They boil down to the following:

  • human capital turns into capital when it comes to working at the expense of knowledge, skills, creativity, innovation of a person;
  • the growth of this factor should be the key to the success of the growth of the main indicators of the company;
  • the use of capital properly and rightly leads to an increase in the well-being of workers;
  • Growth of well-being is an incentive to invest money in yourself, in your skills, enhance skills and professionalism, in order to further use them in your work.

Becker stressed that a purely individual approach is needed when choosing the option to improve their skills and abilities in order for human capital to pay for itself and contribute to the development of the company and the whole country.

human capital theoryGrowth conditions

Human capital is part of one large developing system; therefore, its development is a natural process.Of course, the person himself must be aware of the usefulness of his own development in the professional, spiritual and other areas of his life. Without the desire to achieve something, the desire to know oneself and the world around us, the very idea of ​​development is impossible. The important role in this process is played by the motivation and conditions created for this development. Many firms consider investment in human capital, along with investments in high-yielding assets. It mainly refers to investments in the education and health of its employees. That is, conditions must be created for continuous learning of new techniques, techniques, and opportunities for obtaining higher professional education. In addition, measures to maintain and care for the health of the employee contribute to the increase in the use of his useful knowledge and skills, which again increases his human capital.

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