Human
capital is a popular notion, which comprises knowledge,
skills and attributes derived from education, training
and experience. It represents some of our most valuable
resources. The term "human capital" first
appeared in 1961 in an American Economic Review
article, "Investment in Human Capital", by
NobelPrize winning economist, Theodore W Shultz, Economists
Gary Becker and Theodore Schultz had established global
reputations by recognizing the importance of including
human knowledge and skills in models to explain economic
development. Gary Becker added personality, appearance,
reputation, and credentials to the list of human capital.
Others, like management guru Richard Crawford, equate
human capital with its owners, suggesting human capital
consists of "skilled and educated people"
(Baker, WE 2000).
Thomas
O Davenport, in his book Human Capital: What It Is
and Why People Invest It (1999) looks
at how a worker's performance depends on the ability
and behavior. For him, the choice of tasks also requires
a time allocation definition. The combination of ability,
behavior effort, and time investment produces performance,
the result of personal investment. Some questioned the
wisdom of encompassing human attributes and skills in
an economic metaphor. Other questioned whether it would
ever be possible to arrive at meaningful measures of
human capital alongside those of physical capital.
Early
work by economists in the field of human capital analysis
recognized the importance of a variety of human attributes,
including health, to the understanding of human capital,
and not just skills and knowledge acquired through formal
education or onthejob experience (Becker, 1993:545).
Moreover, they recognized the important contribution
of education and human capital more generally to various
aspects of human wellbeing. |
