Role of Human Capital in Economic Development
CHAPTER ONE INTRODUCTION
a) BACKGROUND
Kenya is one of the less Developed countries that are endowed with relatively good levels of resources and labor. However, there are still a lot to be done to tap those resources into viable productivity and industrialization levels. One way of achieving this is by maximizing the use of both physical and human capital. In or case we shall consider human capital. Human capital, according to Adam Smith refers to 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 in his person. Those talents, as it makes a part of his fortune, so do they likewise to that of the society to which he belongs. The improved dexterity of a workman may be considered in the same light as the machine or instrument of trade which facilitates and bridges labor and which, though it costs a certain expense, repays that expense with a profit. Therefore, the greatest improvement in the productive power of labor and the greater part of the skill, dexterity and judgment with which it is anywhere directed or applied, seem to have been the effects of division of labor.
Other types of capital being equally important, they can be provided with ease if the private sector and the government, through public expenditure can use the existing human capital to develop and widen the capital stock base, both in domestic production and production of industrial goods. Human capital is therefore a vital factor of production, seemingly the most prominent of all the other types of Capital.
Owing to increasing population growth in Kenya, labor is not a hindrance to development. In fact, people export their workforce to the United States of America through the famous Green card lottery. There is more than this in economic development process.
a) BACKGROUND
Kenya is one of the less Developed countries that are endowed with relatively good levels of resources and labor. However, there are still a lot to be done to tap those resources into viable productivity and industrialization levels. One way of achieving this is by maximizing the use of both physical and human capital. In or case we shall consider human capital. Human capital, according to Adam Smith refers to 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 in his person. Those talents, as it makes a part of his fortune, so do they likewise to that of the society to which he belongs. The improved dexterity of a workman may be considered in the same light as the machine or instrument of trade which facilitates and bridges labor and which, though it costs a certain expense, repays that expense with a profit. Therefore, the greatest improvement in the productive power of labor and the greater part of the skill, dexterity and judgment with which it is anywhere directed or applied, seem to have been the effects of division of labor.
Other types of capital being equally important, they can be provided with ease if the private sector and the government, through public expenditure can use the existing human capital to develop and widen the capital stock base, both in domestic production and production of industrial goods. Human capital is therefore a vital factor of production, seemingly the most prominent of all the other types of Capital.
Owing to increasing population growth in Kenya, labor is not a hindrance to development. In fact, people export their workforce to the United States of America through the famous Green card lottery. There is more than this in economic development process.
References: Hafiz Pasha, M. Aynul Hasan, Aisha Ghaus and M. Ajaz Rasheed, Pakistan”, Pakistan Development Review - 579., 1996b. “An integrated planning model and expenditure on social development: the case of Pakistan,” 2) Romer, Paul, 1986. “Increasing returns and long-term capital”, Journal of Political Economy, Vol. 94, pp. 1002-1020. Wishart, M.D., Principles of Microeconomics, 4e, 2005. Stamford, Thomson publishing. Robert, L.H., The Economic Problem, 2e, 1970. New Jersey, Englewood. http//:www.ciafactbook.com http//:www.gisdevelopment.net Republic of Kenya (1965). African Socialism and its Application to Planning in Kenya, Nairobi. Government press. Todaro, M.P., Latest edition, Introduction to Economics for a Developing World. Oxford. Chapter 24.