Discussions about economic outlook tend to revolve around GDP growth. Human capital – people who keep the machine running – is seldom considered. In an attempt to assess how well countries around the world are making use of their respective work forces, the World Economic Forum has compiled the first-ever Human Capital Index. And based on a brief glance at the report – with the exceptions of Singapore, Japan and Australia – the Asia-Pacific region has some work to do.
Ranked third of the 122 countries in the study, Singapore is the only state in the region to make it into the top 10, surpassed only by Switzerland and Finland. As we’ve noted in the past, Singapore is no slouch when it comes to rankings, from its airport to its knack for innovation. Other nations in the region should take note of Singapore’s success.
“The key for the future of any country and any institution lies in the talent, skills, and capabilities of its people,” the WEF’s executive chairman Klaus Schwab wrote in the report. “By providing a comprehensive framework for benchmarking human capital, the Report highlights countries that are role models in investing in the health, education, and talent of their people and providing an environment where these investments translate into productivity for the economy.”Enjoying this article? Click here to subscribe for full access. Just $5 a month.
Overall, Europe appears to be leader in the realm of human capital. Countries in the fourth through ninth slots, respectively, are as follows: The Netherlands, Sweden, Germany, Norway, United Kingdom, and Denmark – with Canada placing tenth. Following not too far behind are Japan (no. 15) and Australia (no. 19). (The United States came in at 16th.)
A tad farther down the list are Malaysia and South Korea – nos. 22 and 23 – and China, which came in 43rd. Thailand followed just behind in 44th, followed by Sri Lanka (no. 50), Indonesia (no. 53), and the Philippines (no. 66), and Vietnam (no. 70). India came in at no. 73, followed by Pakistan at a dismal 112th.
A nation that wishes to hone its populace into a more smoothly operating economic machine apparently needs to focus on four factors: health and wellness, education, workforce and employment, and fostering an “enabling environment” (infrastructure, legal framework, social mobility). Some countries score well in one or two categories but flounder in another – such as China, the world’s largest economy that struggles with obesity and stress.
Read the full report here.