Global Human Capital Index 2017

The World Economic forum published Global Human Capital Report every year. The Global Human Capital Index provides a means of measuring the quantifiable elements of the world’s talent potential so that greater attention can be focused on delivering it. By measuring countries’ talent resources holistically according to individuals’ ability to acquire, develop and deploy skills throughout their working life rather than simply during the formative years, we hope to foster a true revolution in educational systems where education is geared to meeting the needs of the future workforce. Human capital is a key factor for growth, development and competitiveness.The top ten countries are Norway, Finland, Switzerland, United States, Denmark, Germany, New Zealand, Sweden, Slovenia and Austria. The report was prepared on following four key element:

Capacity: A more educated population is better prepared to adapt to new technologies, innovate and compete on a global level. The Capacity subindex features four common measures of formal educational attainment, disaggregated across age groups in the workforce. These capture the percentage of the population that has achieved at least primary, (lower) secondary or tertiary education, respectively, and the proportion of the population that has a basic level of literacy and numeracy.

Deployment: Beyond formal learning, human capital is enhanced in the workplace through learning-by-doing, tacit knowledge, exchange with colleagues and formal on-the-job learning. The Deployment subindex measures how many people are able to participate actively in the workforce as well as how successfully particular segments of the population—women, youth and older people, those who tend to be particularly inefficiently engaged in labour markets—are able to contribute. Including both those currently employed as well as people actively looking for work, a country’s labour force participation rate is the broadest measure of the share of its people participating in the labour market. Unemployment rates capture the subset of this group that is currently out of a job but would like to work. The underemployment rate is the share of those currently employed who would be willing and available to work more. A measure of the gender gap in economic participation is also included as it remains a critical weakness in most labour markets around the world.

Development: This subindex concerns that formal education of the next-generation workforce and continued upskilling and reskilling of the current workforce. Access to education for today’s children and youth—the future workforce—is captured using net adjusted enrollment rates for primary school and net enrollment rates for secondary school, as well as through gross tertiary enrollment ratios and a measure of the education gender gap at the secondary enrollment level, for the under 15 and 15–24 age groups. As young adults with completed secondary education face a choice between tertiary studies, acquiring further specialized vocational skills or entering the labour market, the Index includes a measure of enrollment in vocational training programmes, without making a value judgement between these three options in terms of index scoring.5 The Index also includes two qualitative indicators on the quality of primary education and on how well the education system as a whole meets the needs of a competitive economy, as assessed by a country’s business community. The Index includes an assessment of the skill diversity of a country’s recent graduates as a proxy for the range of expertise available to a country.6 Finally, outcomes on lifelong learning among the adult workforce are captured through a measure of formal staff training from the World Economic Forum’s Executive Opinion Survey.

Know-how: Know-how concerns the breadth and depth of specialized skills use at work. Economic complexity is a measure of the degree of sophistication of a country’s “productive knowledge” as can be empirically observed in the quality of its export products.7 In addition, the Index measures the current level availability of high- and mid-skilled opportunities and, in parallel, employer’s perceptions of the ease or difficulty of filling vacancies.

The Human Capital Index 2017 ranks 130 countries on how well they are developing their human capital on a scale from 0 (worst) to 100 (best) across four thematic sub-indexes: Capacity, Deployment, Development and Know-how—and five distinct age groups or generations—0–14 years; 15–24 years; 25–54 years; 55–64 years; and 65 years and over—to capture the full human capital potential profile of a country.In total, the Index covers 21 unique indicators, out of which eight have been fully disaggregated by generation, resulting in 44 distinct data points. To be included in the Index an indicator must have available data for at least half of the sample countries. Values for each of the indicators come from publicly available data originally compiled by international organizations such as the International Labour Organization (ILO) and the United Nations Educational, Scientific and Cultural Organization (UNESCO). In addition to hard data, the Index uses qualitative survey data from the World Economic Forum’s Executive Opinion Survey. As many of the concepts measured by the Global Human Capital Index are expressed as percentage rates, final scores can be roughly interpreted as a percentage reflecting the degree of effective human capital utilization in a given country relative to the ideal outcome.

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