Human Capital and Technology Development

Abstract

The relevance of ‘human capital’ to technological competence and development is universally accepted in the literature. However, human capital may have many ramifications, each of which should be considered separately. A firm has a stock of skills given by the background and training of the entrepreneur or business leader, the production manager (who is generally the most important person, after the entrepreneur, in deciding the technical course of a firm), and other technically qualified personnel hired from the labour market (locally or abroad). In addition, it has workers of different levels of quality and education. Over time, it adds to this stock by investing in training its employees, in-house or externally (locally or abroad); it also loses skills as employees leave the firm to set up on their own or join other firms. These broad components of human capital are considered separately below.