page_title: Human capital
section_title: Background
hierarchical_section_title: Human capital / Background
caption_attribution_description: English: Clark's Sector model for industry sectors in the US economy from 1850 to 2009 Sources: Economic Report of the President: 2011 Report Spreadsheet Tables, B-46. Employees on nonagricultural payrolls, by major industry, 1965-2010, U.S. Government Printing Office [1] (12/29/2011) Economic Report of the President: 2011 Report Spreadsheet Tables, B-35. Civilian population and labor force, 1929-2010, U.S. Government Printing Office [2] (12/29/2011) Economic Report of the President: 2001 Report Spreadsheet Tables, B-46. Employees on nonagricultural payrolls, by major industry, 1950-2000, U.S. Government Printing Office [3] (12/29/2011) Historical statistics of the United States, colonial times to 1970, Volume 1, Chapter D, Labor Force (Series D 1-682), U.S. Bureau of the Census, 1975 [4] (12/29/2011)
context_page_description: Human capital is the stock of habits, knowledge, social and personality attributes embodied in the ability to perform labour so as to produce economic value.
  Human capital is unique and differs from any other capital. It is needed for companies to achieve goals, develop and remain innovative. Companies can invest in human capital for example through education and training enabling improved levels of quality and production.
  Human capital theory is closely associated with the study of human resources management as found in the practice of business administration and macroeconomics.
  The original idea of human capital can be traced back at least to Adam Smith in the 18th century. The modern theory was popularized by Gary Becker, an economist and Nobel Laureate from the University of Chicago, Jacob Mincer, and Theodore Schultz. As a result of his conceptualization and modeling work using Human Capital as a key factor, the 2018 Nobel Prize for Economics was jointly awarded to Paul Romer, who founded the modern innovation-driven approach to understanding economic growth.
context_section_description: Human capital is a collection of traits – all the knowledge, talents, skills, abilities, experience, intelligence, training, judgment, and wisdom possessed individually and collectively by individuals in a population. These resources are the total capacity of the people that represents a form of wealth which can be directed to accomplish the goals of the nation or state or a portion thereof. The human capital is further distributed into three kinds; 
  (1) Intellectual Capital 
  (2) Social Capital
  (3) Emotional Capital
  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.
  It was assumed in early economic theories, reflecting the context – i.e., the secondary sector of the economy was producing much more than the tertiary sector was able to produce at the time in most countries – to be a fungible resource, homogeneous, and easily interchangeable, and it was referred to simply as workforce or labor, one of three factors of production (the others being land, and assumed-interchangeable assets of money and physical equipment).  Just as land became recognized as natural capital and an asset in itself, human factors of production were raised from this simple mechanistic analysis to human capital.  In modern technical financial analysis, the term "balanced growth" refers to the goal of equal growth of both aggregate human capabilities and physical assets that produce goods and services.
  
  The assumption that labour or workforces could be easily modelled in aggregate began to be challenged in 1950s when the tertiary sector, which demanded creativity, begun to produce more than the secondary sector was producing at the time in the most developed countries in the world.  
    Accordingly, much more attention was paid to factors that led to success versus failure where human management was concerned.  The role of leadership, talent, even celebrity was explored.
  Today, most theories attempt to break down human capital into one or more components for analysis Most commonly, social capital, the sum of social bonds and relationships, has come to be recognized, along with many synonyms such as goodwill or brand value or social cohesion or social resilience and related concepts like celebrity or fame, as distinct from the talent that an individual (such as an athlete has uniquely) has developed that cannot be passed on to others regardless of effort, and those aspects that can be transferred or taught: instructional capital.  Less commonly, some analyses conflate good instructions for health with health itself, or good knowledge management habits or systems with the instructions they compile and manage, or the "intellectual capital" of teams – a reflection of their social and instructional capacities, with some assumptions about their individual uniqueness in the context in which they work.  In general these analyses acknowledge that individual trained bodies, teachable ideas or skills, and social influence or persuasion power, are different.
  Management accounting is often concerned with questions of how to model human beings as a capital asset.  However it is broken down or defined,
  human capital is vitally important for an organization's success (Crook et al., 2011); human capital increases through education and experience. Human capital is also important for the success of cities and regions: a 2012 study examined how the production of university degrees and R&D activities of educational institutions are related to the human capital of metropolitan areas in which they are located.
  In 2010, the OECD (the Organization of Economic Co-operation and Development) encouraged the governments of advanced economies to embrace policies to increase innovation and knowledge in products and services as an economical path to continued prosperity.  International policies also often address human capital flight, which is the los
caption: Clark's Sector model the for US economy 1850–2009[13]
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