Human capital is the intangible part of capital apart from bank accounts, a production plant, or share stocks. Training courses, expenses on medical care, schooling, honesty, and punctuality are also types of capital, as they improve the income, promote health, and enhance the person’s lifestyle with time. Education, skills and knowledge, and healthcare cannot be disconnected from people in more the same way people can be disjoined from material and financial resources. In the human capital training, education and health are the key investments. This is because graduates and specialists have a higher income, as witnessed by college graduates in the United States who have high IQS (Mincer, 1999).
Individuals with higher education enjoy higher income, as witnessed in 1997, where the premium of having a college education was over 75%. Many professionals, including engineers, lawyers, and accountants saw their incomes increased during this period. The new concern, however, is the quality and quantity of skills, education, and training that is productive (Hsu, 2011). In fact, the USA is feeling threatened by the large numbers of the Indian graduates in mathematics, who present serious competition to middle class workers in the United States. Increasing the human capital needs, some companies in India such as 24/7 outsource from other countries, such as Philippines.
For sustained development, human capital is essential. Brazil is facing challenges in human capital. For example, students drop out of school before they join high school; and there have been no measures to avert the situation. Lack of capacity by Brazil Corporations to maintain skilled and talented workers due to the poor educational system has been a challenge (Mincer, 1999).
Human capital is vital in correct management of resources, and this is done within organizations. There is a gap between the work requirements in production firms and the skills graduates are getting. This has pushed some organizations to train and come up with specialized programs for their employees (Hsu, 2011).
The realization of how the society benefits from higher education is limited compared to private returns. This is due to the lack of literature on documenting social benefits in contrast to the massive volumes of literature on private benefits. The inadequacy in writing of the social benefits is attributed to the difficult nature in the quantification of social benefits of education, and there is no satisfactory justification for excluding them from the debate. The larger investment of higher education should be viewed through the benefits that university and college graduates bring towards the development of the society and the community (Mincer, 1999).
Graduates are more likely to engage in public participation, such as voting and taking part in voluntary activities. They also have better health status, where they drink less, exercise more, and eat better foods; hence, they are less obese and do not smoke that much. These are economic ways to lower the hospital bills on drugs and medication and invest the funds in other sectors of the economy. Graduates are the most economically productive individuals in the society, and they are less likely to engage in criminal activities. They engage in numerous social networks and are less likely to get depressed and hinder economic development (Picker, 2013).
Individuals with higher education in developing countries show a general trend in behavior and attitude adjustments. These learned people are more likely to be satisfied in midlife, more optimistic, and use health services more regularly. The increased number of higher learning institutions means that more individuals are graduating. These students show greater willingness to take part in civic life. Academic courses have a considerable impact on the socio-political issues in a society, which in turn influences the economic growth of the country. This can be associated with the expansion of higher education to developing countries, which are seeking to stabilize the social life of its citizens in order to concentrate more on development projects.
Numerous reports have consistently drawn comparison between health and educational attainment. This debate is in line with the health risks such as smoking, accidents, drug abuse, disease spread, contraction, and mortality, and the results have been similar; well-educated persons are healthier and have higher life expectancy. However, education is not the independent causal agent of a healthy population, although it has a stable, regular, and increasing impact on health (Leon, 2011). A positive correlation has been established between mass education and population health, especially in development studies, though in such studies, the control of economic development, which is more likely to influence health, was overlooked.
On the other hand, a healthy population is more likely to be well-educated. The social and economic conditions in which people live in determine their health status and, consequently, their education levels (Picker, 2013). The levels of education in a population determine the advancement in technology and science, as well as in specialized skills. This leads to inventions and innovations that promote development. The men and women who possess these skills, technology, and manpower make up the human capital that provides the drive for a country’s Gross National Product growth. High human capital in a country is likely to lead increase in the GNP. A high and healthy population, which has the skills and technology required in production of goods and services, is pivotal in national development (Huang, 2008).
Sometimes, an increase in human capital cannot lead into growth in the GNP, especially when resources are not available or when the value of the commodities is low. Again, if the products being produced are universal and not competitive, the GNP stagnates. China and India are some of the best examples whose GNPs have increased owing to the contribution of a productive human capital resource. Technology coupled with skills has led to mass production of goods in China and India which are in demand due to their quality and favoring prices. Also, the political atmosphere favors GNP growth. Countries like Syria and Turkey have plentiful human resources, but their GNP is stagnating due to terrorism and internal wars (World Bank, 2006).
It is agreeable that the leader should know the role of development towards self-sustenance, where financial aid will be no longer necessary. This is because the role of the World Bank is poverty reduction and economic development, as embedded in their quest for the realization of the Millennium Development Goals (MDGS). This is in the developing countries, which mostly rely on financial assistance to cater for basic necessities of life, such as food and drugs. This is true, because with the development and attainment of the MDGs, countries will not need help and will focus their attention on making earth a better place to live (Stern, 2001). That is an enormous task; therefore, President Jim Young Kim has a monumental task ahead of him to fulfill Obama’s words.
On his second statement, Obama says that development professionals need to lead the world development agency. This is essential, as the changing trends of world development need specific skills and professionalism. Tackling poverty was an easy task a decade ago, where aid was enough, but the rise in population has called for something ‘beyond aid”. The role of development is becoming professional; hence, the leaders of development agencies keep up with the pace starting with World Bank’s President Jim Young Kim. The president will need the professionalism in improving the Bank’s role in this dramatic time, where developing countries such as Brazil and India are coming up in a big way in global economic growth (Goldin, 2003).
Looking at the history of the World Bank on development assistance over the last five decades, aid has proven not to be the effective way of reducing poverty. After the Bank had realized this, it came up with a development blueprint in the form of MDGs. This is reflected in the Bank’s priorities of macro stability, governance, human development, and private sector development. Other areas include infrastructural and environmental development, since development is all round. Significant and disciplined professionalism is required in handling the great task of moving the world development agenda to the next level. This includes keeping in mind the ever changing global dynamics in countries’ economies (World Bank, 2006).