Talent, not capital, will be the key factor linking innovation, competitiveness and growth in the 21st century

By | Ramesh Ranjan | Chief Editor – www.humanengineers.com


World Economic ForumThe World Economic Forum publishes a comprehensive series of reports which examine in detail the broad range of global issues it seeks to address with stakeholders as part of its mission of improving the state of the world. The Human Capital Index is one amongst them.

Human Capital ReportThe Human Capital Index seeks to serve as a tool for capturing the complexity of education, employment and workforce dynamics so that various stakeholders are able to make better-informed decisions. Last year’s edition of the World Economic Forum’s Human Capital Report explored the factors contributing to the development of an educated, productive and healthy workforce. This year’s edition deepens the analysis by focusing on a number of key issues that can support better design of education policy and future workforce planning.

A nation’s human capital endowment—the skills and capacities that reside in people and that are put to productive use—can be a more important determinant of its long term economic success than virtually any other resource. This resource must be invested in and leveraged efficiently in order for it to generate returns—for the individuals involved as well as an economy as a whole.

Talent, not capital, will be the key factor linking innovation, competitiveness and growth in the 21st century, and we must each understand better the global talent value chain. Better data and metrics are critical to this understanding. The Human Capital Index quantifies how countries are developing and deploying their human capital and tracks progress over time. This Report provides comprehensive information on the talent base in each country, including information on education levels of the employed, unemployed and the inactive members of the population as well as the specific qualifications of the latest entrants to the workforce.

Key Concepts

There are three guiding concepts underlying the second edition of the Human Capital Index. The first is a focus on learning and employment outcomes, rather than on inputs or enabling environment variables. The goal is to provide a snapshot of where countries stand today with regard to their success or otherwise in developing and deploying their people’s human capital potential across all backgrounds and ages.

The second is a focus on demographics. Whenever possible, the Index takes a generational view and disaggregates indicators according to five distinct age groups, highlighting issues that are unique or particularly crucial for the human capital development of each cohort. The resulting snapshot of where countries stand at each stage of the human capital development life cycle allows for more targeted policy intervention and human resource planning.

The third is that the Human Capital Index holds all countries to the same standard, measuring countries “distance to the ideal” state. By establishing an absolute measure of countries’ performance, the revised edition of the Human Capital Index allows for both intra- and inter-country comparisons year-to-year. Future annual editions of the Report will thus allow countries to track progress and changes in the level of their human capital investment and deployment gaps over time.


The Human Capital Index is among the set of knowledge tools provided by the World Economic Forum as part of its System Initiative on Education, Gender and Work. The System Initiative produces analysis and insights focused on forecasting the future of work and skills across countries and industry sectors as well as best practices from businesses that are taking the lead in addressing skills gaps and gender gaps. The System Initiative also creates dialogues and public-private collaboration on education, gender and work in several regions of the world and within industry groups.

The Human Capital Index ranks 130 countries on how well they are developing and deploying their human capital potential. The Index assesses Learning and Employment outcomes on a scale from 0 (worst) to 100 (best) across five distinct age groups to capture the full demographic profile of a country.

India was on Tuesday ranked low at 105th position globally on a worldwide Human Capital Index, which measures countries’ ability to nurture, develop and deploy talent for economic growth. Finland topped the list.

Among BRICS countries, India is ranked lowest as against Russia’s 28th, China’s 71st, Brazil’s 83rd and South Africa’s 88th.

Its a shame that countries like Bangladesh, Bhutan and Sri Lanka are also placed higher on the index released by Geneva-based World Economic Forum (WEF) in the Chinese city of Tianjin at its Annual Meeting of New Champions -also known as `Summer Davos’ summit.

Pakistan ranks further lower at 118th place. Giving India 105th rank out of the total 130 countries included in the index, WEF said the country has optimised just 57% of its human capital endowment -placing it in the top of the bottom quartile of the index.

India was ranked 100th last year out of total 124 countries.

It’s a pity that a country which aspires to be the Top 3 Global Economies and has the largest productive & young population is right at the bottom. Our Prime Minister kept harping on the Demographic Dividend but what dividend can we reap, if the quality of our Talents are at the lowest level.

Its a complete failure of our Political System, the Government, our Education System and our Corporate System, that India finds itself at the bottom on this very important parameter.

Its time that we woke up and took urgent & concrete steps to address this issue and truly leverage our Demographic profile of this Country to its maximum advantage.

  • While we have formulated a Right to Education (RTE) Act, it only remains on paper and the ground realities are far from removed. Education must be truly guaranteed and every child must be provided access to free quality education upto the 10th Standard. Some states like Tamil Nadu & Gujarat have some very good mid-day meal schemes to woo children to schools. Private organisations like Akshaya Patra & Azeem Premji Foundation in Karnataka are also doing their bit to encourage school going children and improve the quality of education.
  • The conditions of our Government Schools are a lot to be desired. Most of them are in pathetic conditions and the Government needs to seriously work on a war footing to improve the conditions of the Schools, the infrastructure and the environment.
  • The quality of our Teachers especially in the Government Schools are sub-standard. The Government needs to work on Attract, Develop, Reward & Retain School Teachers if the quality of education has to drastically improve.
  • Even in the Private Schools & Colleges, the quality of Teachers / Professors are not up to the standard. They are not able to attract the best of the Professionals to Schools & Colleges because of poor Compensation and other selection parameters.
  • We need to seriously re-think on the Caste based Reservations system and work out a totally new Inclusive Policy probably based on Economic disparity rather than caste based.
  • Our Employment policy while being inclusive must be based on Merit and not on the basis of Caste, Religion, Region & Gender
  • Our Education System must be totally revamped to keep pace with the changing times. The plethora of Exams and the criteria for selection into Universities must be streamlined and have one common National Education System and a criteria for Enrollment/Selection. This will ensure standardization & consistency in our Education System and also lessen the misery of the Students aspiring for higher education. They should also ensure a periodic review of the Syllabus to keep pace with the changing dynamic economy and technology advancement.
  • Corporates must invest more Time, Money & Effort in the Academia and work closely with them and partner with them on a continuous basis to ensure that what is taught in the Schools, Colleges & Universities are relevant to the Corporate World and adds value to the Business, when the students join the main stream Corporate World.
  • The Government could consider extending the CSR tax concessions to Corporates who are willing to invest in Education.
  • Lastly every one of us must equally work towards upgrading our skills on a continuous basis and not rest on past laurels.

All of us are happy and proud that India is the fastest growing economy with a GDP growth of 7.5%, imagine the potential that India has. With a HCI of ranking of 105, we are growing at 7.5% GDP growth rate. If we were to move to the TOP, how much more we could grow.

J Rosow & J Hickey in Strategic Partners for High Performance have said,“Natural resources can be bought, capital can be borrowed, & technology can be copied. Only the people in the workforce, with their skills & commitment, & how they are organised, are left to make the difference between economic success & failure.

Knowledge capital represents the only remaining source of competitive advantage for organisations. Most other major components of competitiveness are universally available” 

Its high time our Politicians, Corporate Leaders realise this and channelize their Time, Money & Effort in nurturing, developing and deploying our Human Capital.

Well, will we treat this as a wake up call and pay heed to this ignominy or will it be Business as Usual, only time will tell….

RanjanLRamesh Ranjan is the Founder & Chief Editor of Human Engineers  an organization being formed to help Organization’s to make the most of its People” and co-creating value thro’  People”. 

He is a certified CEO / Leadership Coach, Mentor for Startups, Blogger & a Speaker. In a career spanning nearly 3 decades, he has been Head of HR and held leadership positions in India & globally in organisations like Schneider Electric India, American Power Conversion (APC), Chevron Texaco/Caltex India, Praxair India, Co Systems India, Indian Herbs & ITI.

He was the Honorary Secretary of the National HRD Network, Bangalore Chapter – 2000-2002, Cluster Lead – NHRD Bangalore Chapter (Whitefield & ORR) in 2014 and currently the Vice President – NHRD Bangalore Chapter. He was the member of the India HR Council of the AMCHAM, New Delhi, Panelist on the Roundtable of HR Directors of Petroleum Companies, ISP Mumbai and Member of the India HR Council of Conference Board.

He strongly believes that HR is not for faint hearted professionals. He believes that “when the going gets tough, the tough gets going” and can be reached at rameshranjan@humanengineers.com




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