What Are the Different Types of Human Capital Technology?

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  • Written By: B. Turner
  • Edited By: W. Everett
  • Last Modified Date: 04 October 2019
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Economy theory is based on the idea that businesses use three basic production factors, or resources, needed to produce goods and services. These three resources include land, equipment, and human capital in the form of labor. Human capital technology refers to the various techniques used to help labor become more efficient. Improvements in human capital technology allow workers to produce goods more quickly or cheaply, resulting in greater profits for the company and a more productive economy that benefits all of society. The different types of human capital technology generally include public health, education, and on-the-job training.

Health-related improvements represent one of the most basic technologies used to make workers more efficient. Take for example an underdeveloped country, where people struggle with hunger, and basic diseases are a major health threat. Under these types of conditions, it's no surprise that the workforce as a whole is relatively unproductive, and that the economy struggles to expand. Businesses can invest in free vaccinations and health care, or simply provide free meals to workers to transform humans into effective laborers.


Education serves as another vital form of human capital technology. Education levels and productivity are closely related throughout much of the world, and countries with greater educational resources generally have healthier economies. The more education a person has, the greater the skills he brings to the workforce. In societies where most people receive a basic education, companies are able to install more complex machinery and equipment that increases production rates even further. Without education, workers would not have the skills or understanding to operate this type of machinery, leading to lower production rates and weaker economies.

Training programs, both in and outside of the workplace also act as a type of human capital technology. Training employees helps to build their skills, leaving them better equipped to handle tasks in the workplace. Companies with extensive training programs for new workers benefit from this investment with fewer errors, greater efficiency and ultimately, greater profits. Hands-on training programs offered by municipalities or private agencies can also build worker skills and experience, resulting in more efficient human capital.

Some economists also point to the potential for another type of human capital technology, which relates to adaptation strategy or competence. This theory focuses on the idea that no matter how well-educated an employee is, or how well trained, he may not be capable of performing certain types of work at maximum efficiency. This is often related to how new equipment or methods are implemented in the workplace. If the technology was not designed well, it can hinder employees rather than helping. This highlights the need to design technologies well-suited to workers, and to prepare a well-crafted strategy for effective training and implementation.


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