Human capital development is related to development of one's labor force and the capacity of people to move upwards and receive the rewards for their efforts. This is why I usually advocate for the benefits of training and development but also for the universalization of our institutions and opportunities. According to a publication the Brookings Institute entitled The contribution of human capital to economic growth employers should be hiring graduates based on their performance within universities, ability to conceptualize issues/problems, think clearly and originally on issues.
College Preparedness and Company Hiring Practices
Ensuring graduates have the right skills is one things but the employers ability and willingness to hire and groom exceptional talent is another. My experience in the past indicates that most positions 70% are hired by people who know each other and that isn't always based on people's skills (I did a quick search to see if that was in the ball park Network Statistics 2022). That would create a problem for high performing students that aren't given a chance to succeed and must struggle to fully maximize their exceptional talent.
Thus colleges can encourage these behaviors but employers but be willing to move outside of their social networks to recruit higher quality candidates. That is unlikely to happen unless we are forced through challenge to change existing patterns to find and promote the best, brightest, and most qualified. (I once created a variable course tract sequencing system that allows students to move through different courses based on their learning and interests in a way that tests and reinforces their knowledge through individualize competency development based on their natural abilities and interests. It was kind of a next stage on competency implementation.)
That leads us to 1.) Company hiring practices and 2.) College preparedness.
Its important to change how companies hire and how colleges prepare students because according to that publication the average contribution of labor productivity growth has been minimal for the U.S. at a stagnant .2% (Baily, Bosworth & Kennedy, 2020). Its an indication that we are not maximizing our national resources well and social nepotism is holding us back. (An argument for knowing someone's abilities through experience is one thing but not looking at qualified candidates because they are not within one's social circle is another thing. One must always be open to more qualified people from other networks and places to take a chance on the highest corporate/national performance.)
We learn that 3.) Social networking and nepotism could have a negative impact on human capital growth if exclusive.
Human Capital Calculations
Reading through the paper I also found an interesting human capital calculation that may be of benefit to someone who is concerned with how education and personal development are calculated. Remember that these are formulas and could easily be developed with different variations. They are not facts but just ways of understanding the components that allow for quantitative analysis.
Mincer (1974) developed the Mincerian function ln Y= α +β‧S + g(A)
(Y is a measure of labor earnings, S is years of schooling, A is age or preferably years of work experience, and g is a higher order polynomial that reflects the concaveness of the age earnings) function.)
What we find is that education (I would include many forms of higher skilled trades) impact human capital development over a persons life in a way that improves the resources available to a country. Thus, education is so important for development that with the right infrastructure and investment environment could determine the economic path and resilience of an entire nation over time.
It also brings up another important concept for countries that are aging in what we often see in developed nations. Education mixed with other forms of productivity enhancements (i.e. wearable tech, innovative clusters, etc.) could be a net positive when that education mixes with knowledge, experience, and pro growth policies to create real value and development opportunities.
The work further discusses inventors, entrepreneurs and industrial research laboratories for maximization of benefits. 200 innovation. 4, 2010). I have advocated for economic clusters (i.e. Delta County Model) as places to improve upon human capital development because it puts the right inventors, investors, and entrepreneurs in the same location to enhance each other. It also allows for the creation of pools of cluster research that improves multiple industries at the same time (i.e. military, outdoor equipment, metals, auto-space, etc.).
Suggestions and Recommendations
Based on the paper and my own research I would consider the need to ensure our schools are truly functioning at their best to improve on slow growth in human capital development. Likewise, education (and skilled trades) have become part of a life long learning opportunities that pays dividends for a nation and for the people who engage in them. That requires a level of easy access and mobility of education as seen in some of our transition to online schools and more inclusive educational frameworks.
Business and industry should always consider that they do not currently associate with the best candidates and are neglecting a huge untapped resource because they don't want to step out of their comfort zones. They should consider working with universities to design curriculum that enhances needed skills (i.e. competency model) and allow promising individuals (based on skill and not race, religion, or social network) to be selected for corporate grooming (mentoring would likely be helpful here).
While hiring people we know may feel safe it also carries a long term risk for the highest performance levels needed in a global society because people with the highest skills (i.e. best and brightest) are not always considered. Often they are not part of those "connected" groups. To find such unexplored gems one must be willing to look at other markers and tools that lead to discovery, recruitment and enhancement.
Mixed with the right pro investment policies, clusters, and universalized institutions we can unlock our diverse human capital that is unique to the U.S. (each country will have their own mix) that will determine what skills and resources are available for their own industry development. I advocate for the U.S. to use its diverse background and abundant financial, natural, and political capital to place itself at the highest/valuable within the supply chain in a way that leads to maximizing of value for ourselves and our allies.
Investments and maximization of returns is important for growth. Top down policies don't work unless they spark wider growth and greater return. Our economic system should consider methods of creating rapid innovation and investment value to help our nation push its development upwards into the Digital Era where maximum economic and social performance is possible in a way that sustains future capital. See Foster New Discoveries, University-Industry Research, Delta County Invest.
Baily, M., Bosworth, B & Kennedy, K. (September 2020)The contribution of human capital to economic growth: A cross-country comparison of Germany, Japan, and the United States. Brookings Institute. Retrieved September 19, 2022 from https://www.brookings.edu/wp-content/uploads/2021/09/20210928_BailyBosworthKennedy_Returns_to_education_final.pdf
Mincer, Jacob (1974). Schooling, Experience and Earnings. New York: National Bureau of Economic Research.
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