IN a fast modernizing world it has come to be increasingly recognized that human capital plays a more important role than material resources in the progress of a nation. Japan and Korea are prime examples of this phenomenon. In the last five decades, on the basis of better education and training they have gone ahead of other nations which command far more natural endowments. It is the consensus of opinion among experts that talent, not capital, will be the key factor linking innovation, competitiveness and growth in the 21st century. They describe the process as the ' global talent value chain' which is monitored by the World Economic Forum. WEF publishes an annual report titled Human Capital Index which makes a comparative study of how various nations develop and leverage their human capital resources.
The Human Capital Index ranks 124 countries on how well they are developing and deploying their human capital, focusing on education, skills and employment. This Index also provides comprehensive information on the talent base in each country, including information on education levels of the employed, unemployed and the inactive members of the population as well as the specific qualifications of the latest entrants to the workforce. The Human Capital Index presents country rankings that allow for effective comparisons across regions and income groups.
Finland tops the rankings of the Human Capital Index in 2015, scoring 86% out of a possible 100. Norway (2), Switzerland (3), Canada (4) and Japan (5) make up the rest of the top five. They are among a group of only 14 nations that have crossed the 80% threshold. Among other advanced economies, France is in 14th position, while the United States is in 17th position, scoring just under 80%. The United Kingdom holds the 19th spot and Germany 22nd. Among the BRICS, the Russian Federation (26) scores highest with a score of 78%, with China next at 64. The results for Asia and Pacific, the world's most populous region, lie mostly in the mid-range of the Human Capital Index 2015. India at the 100th rank is among other poor performers such as Nepal and Myanmar. Best performing countries in Asia and the Pacific region are Japan rank 5, New Zealand at 9, and Australia at 13. China and Indonesia come in the middle range of the index ranking 64 and 69, respectively.
Pakistan ranks at 113 out of 124 countries in the Human Capital Index. It scores lowest in Asia and Pacific and among the lowest in middle income countries. Pakistan ranks at the bottom of the region as a result of its poor performance on educational outcomes. Pakistan slipped one spot on the Human Capital Report 2014-15 to 113, and stays just out of the 10 worst countries in the 124- country survey. The major weaknesses in the case of Pakistan include the lack of social safety nets, and informal employment. With only two percent spending on the education system, Pakistan has miserably failed to develop its human capital.
The Human Capital Index seeks to serve as a tool for capturing the complexity of education and workforce dynamics so that various stakeholders are able to take better-informed decisions. Because human capital is critical not only to the productivity of society but also the functioning of its political, social and civic institutions, understanding its current state and capacity is valuable to a wide variety of stakeholders. In pointing to the education and employment outcome gaps, demographic trends and untapped talent pools, the Report's authors hope that they can help governments, businesses, education providers and civil society institutions identify key areas for focus and investment. We in Pakistan specially need to draw the right lessons from the Report and take necessary steps to develop and groom our unutilized human capital.