China’s economic future looks in good shape, in part thanks to its investments in human capital – the population’s level of education and health.
“Measuring human capital”, a global study that was recently published in medical journal The Lancet, examined the relationship between human capital and economic growth and revealed significant improvements in emerging markets between 1990 and 2016.
Finland tops the global leaderboard, followed by Iceland, Denmark, Netherlands and Taiwan. China has moved up the world ranking from 69 in 1990 to 44 in 2016, giving it the second-highest rank among the world’s 10 most populous nations. The US still claims pole position within this grouping, with an overall rank of 27 in 2016, but this marked a significant drop from 6th place in 1990.
The study defined human capital as the “educational attainment, learning and health status of the workforce that contributes to economic productivity … it is workers’ collective skills, knowledge and other intangible assets that are needed for productive work”. It measured, among other things, how much education and healthcare people have had access to and how many years they can work for.
These findings are important for policymakers because they show how broad-based investment in education and healthcare help strengthen the overall nation. China, and many other emerging economies, have shown us that it works.
This sets this study apart from others that focus on the development of more specific areas, such as innovation. National funding of innovation and technology tends to attract the attention of policymakers and, although very important, brings benefits to a much smaller group of people.
Thailand has also improved in recent decades in terms of its human capital levels. We moved up from 103 in 1990 to 72 in 2016.
While this is good news, we must do more if we want to remain competitive and move out of the middle-income trap. Our education system continues to rank towards the bottom in regional studies at the primary, secondary and tertiary levels. Access to healthcare has improved, but it could be better.
Long-term investments are needed here, as they will deliver long-term results that will benefit both our people and the overall economy. I hope that by the time the next such study is conducted, Thailand will be among the leading Southeast Asian nations.
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