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What Is Global Human Capital?

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  • Written By: Terry Masters
  • Edited By: Shereen Skola
  • Last Modified Date: 21 August 2016
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Global human capital is the combination of education, experience, personal attributes and competencies that are represented in workforces around the world contributing to worldwide economies. The notion of workers as important assets that have measurable economic value drives the development policies used by international organizations in lesser developed countries. Much of international law revolves around the rights of workers and the recognition of the importance of creating high-value human capital to a country's health and stability.

Analysts and international economic development organizations measure a developing country's potential and the success of investment efforts through economic indicators, such as the rate of human capital formation. Though it appears a difficult thing to measure, economists have found that the elusive concept of global human capital formation is actually a function of the development of more easily measured factors. The relevant index that determines the rate of human capital formation is the Human Development Index (HDI) which includes information on life expectancy, educational attainment and average individual income.

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As the world becomes a smaller place and corporations are able to tap workforces in developing countries with lower standards of living, the concept of global human capital becomes increasingly important. Much of the philosophy that forms international labor law revolves around the rights of workers to grow and improve their lives, to increase their skills and properly benefit from the use of their talents. What international law seeks to prevent is the establishment of a permanent underclass, where workers in one country get paid a pittance to support the extravagant lifestyles of people in other countries. It also seeks to prevent permanent human development discrepancies, where some countries can afford to invest in the education and health of their workforce while such investments are beyond the capabilities of other countries.

Basically, the concept of global human capital attempts to put a quantitative value on workforces in various countries so they can be compared and evaluated against each other. This information is also collected to determine the rate of global change and whether our civilization is progressing or remaining stagnant. Human capital formation in any one country can be effected by investments in education, the health care system or strengthening the fabric of civic and family life. Many international non-governmental organizations make it their mission to educate and train people so the opportunities that people have to work increase. This may happen because the people have more advanced competencies, or a greater ability to do things that generate economic value.

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