JUSTIFICATION OF GOVERNMENTS HUGE INVESTMENT IN HUMAN RESOURCE (EDUCATION) BY: AGYARE A REGINALD
National development is the key to every nation’s survival. For a nation to develop, there are some critical factors that should be taken into consideration, one of such crucial factors is human resource development. It is against this backdrop that this paper exacts the importance of human resource development and the investment that governments are making in that direction.
Economists all over the world have determined that investing in education to develop human resource or capital can provide organisations with an efficient workforce capable of providing high productivity which can subsequently enhance economic growth and national development. This is evident in submissions made by renowned economists such as Theodore W Schultz, Adam Smith, Bontis et al, Frederick Harbison, Scarborough and Elias. Schultz (1981) elaborated the concept of human capital as considering all human abilities as being either innate or acquired, ie, attributes which are valuable and can be augmented by appropriate investment.
Adam Smith defined human capital as the acquired and useful abilities of all the inhabitants or members of the society. The acquisition of such talents, by the maintenance of the acquirer during his education, study, or apprenticeship, always costs a real expense, which is a capital fixed and realized, as it were. Those talents, as they make a part of his fortune, so do they, likewise that of the society to which he belongs. The improved dexterity of a workman may be considered in the same light as a machine or instrument of trade which facilitates and abridges labour, and which, though it costs a certain expense, repays that expense with a profit. Bontis (1999) defines human capital as the human factor in an organisation; the combined intelligence, skills and expertise that gives an organisation its distinctive character. The human elements of the organisation are those that are capable of learning, changing, innovating and providing the creative thrust which if properly motivated can ensure the long-term survival of the organisation. According to Wikipedia the free encyclopedia, Human capital is the stock of competencies, knowledge, social and personality attributes, including creativity, cognitive abilities, embodied in the ability to perform labour so as to produce economic value. It is an aggregate economic view of the human being acting within economies, which is an attempt to capture the social, biological, cultural and psychological complexity as they interact in explicit and/or economic transactions. Many theories explicitly connect investment in human capital development to education, and the role of human capital in economic development, productivity growth, and innovation has frequently been cited as a justification for government subsidies for education and job skills training.
The contribution that people make to an organization is always emphasized by the human capital theory. This theory recognizes people as assets and argues that any investment in people by the organization will yield line with the resource – based view of the firm as put forward by Barney (1991) who suggests that the organization can achieve sustainable competitive advantage when it has human resource pool that cannot be imitated by competitors. This scenario is describes by Boxall (1996) as “human capital advantage”. Boxall also recognizes a clear difference between “human capital advantage” and “human process advantage”. To him, human capital advantage results from employing people with competitively valuable knowledge and skills, much of it tacit. Human process advantage however follows from the establishment of difficult to imitate, highly evolved processes within the firm, such as cross-department cooperation and executive development. Here, again, Boxall sees the combination of human capital and human process...
References: 1. Michael Armstrong, (2006), Human Resource Management And Practice, Tenth Edition
2. Wikipedia the free encyclpedia
3. Dr Baafi Frimpong, MELS 561 lecture manual
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