Clusters and Three Arenas of Human Capital Development

The OECD defines human capital, "Human capital consists of the knowledge, skills, and health that people invest in and accumulate throughout their lives, enabling them to realize their potential as productive members of society" (OECD, 2019, para 3). A nation's strength is often characterized by the ability to develop its human talent and putting it to good work improving the economy. Clusters offer an opportunity to more rapidly develop human capital. 

Research indicates that clusters have a strong impact on human capital development and often increase the efficiency of that human capital (Natalia, A.; Sakka and Ghadi, 2024). Because there are certain skills needed to further a clusters interest there is naturally a push to develop those skills to further business interests. In the case of clusters around a few industries there are often other opportunities for training and education. 

From a broad sense one might consider three arenas of human capital development.

Skilled Occupations: Skilled occupations help feed a cluster system through a supply of workers that have additional skills that feed the cluster. For example, if you want to build a ship then you will need skilled workers to do that. If you want to run a papermill and become the leading edge manufacturer of new types of paper then your going to have to hire, train or partner with skilled trades colleges. It is the needed input that builds the ideas.

Intellectual Capital: Intellectual capital are the scientific and thinking skills of society. Such people research topics and understand them in more depth. Typically this comes from higher education, new intellectual/philosophical thoughts, stronger executive management skills, so on and so forth. It is a needed input to manage larger systems. 

Innovation & Creativity: Industries adapt and change as new discoveries are created and the infrastructure and human capital are developed. The personality traits that develop new tools, methods and ideas come from our creative side and that requires finding people that have that capacity and grooming them to achieve bigger things. 

Key Points:

-Clusters can enhance and create efficiencies of human capital.

-Three arenas of human capital development are skilled occupations, intellectual capital, and innovation & creativity.

-The pace of human capital development can increase in clusters. 

Alina Natalia POP, 2019. "Analyzing the Efficiency of Human Capital in Clusters through Continuing Vocational Training," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 2, pages 101-106. https://ideas.repec.org/a/ddj/fseeai/y2019i2p101-106.html

OECD (2019, para 3). The Human Capital Project: Frequently Asked Questions. https://www.worldbank.org/en/publication/human-capital/brief/the-human-capital-project-frequently-asked-questions#

Sakka, F., & Ghadi, M. Y. (2023). Human Capital Development, Special Economic Zones, and Dubai as Case Study: a Literature Review. International Journal of Professional Business Review, 8(4), e0613. https://openaccessojs.com/JBReview/article/view/613