Topics: United Nations, Investment, Education Pages: 8 (3002 words) Published: April 7, 2014


Economists and development experts have always maintained that human resource is a significant factor for achieving high economic growth and improve the standard of living in any country. They assert the undisputed fact “the real treasure of any country is its human resource”. According to Harbison (1973), human resources are the energies, skills, talent and knowledge of people which are, or which potentially can or should be applied to the production of goods or the rendering of useful services. Harbison & Myers (1964) posits that "human resources development is the process of increasing the knowledge, the skills, and the capacities of all the people in a society. In economic terms, it could be described as the accumulation of human capital and its effective investment in the development of an economy. In political terms, human resources development prepares people for adult participation in political processes, particularly as citizens in a democracy. From the social and cultural points of view, the development of human resources helps people to lead fuller and richer lives, less bound by tradition. In short, the processes of human resources development unlock the door to modernization". Human resource development (HRD) can therefore be explained as the use of training, organization and career development efforts to improve individual, group and organizational effectiveness. From the foregoing explanation, it could be said that education is imperative if the goals of HRD is to be achieved. Harbison regards human resource as constituting the ultimate basis for the wealth of nations. Adam Smith, who is cited as the “father of modern economics”, states that the capacities of individuals depended on their access to education. Returns on investment in education based on human capital/resource theory have been estimated since the late 1950s and this led to series of United Nations (UN) sponsored conferences to sensitize governments on the need for universal basic education. In a study covering Latin America and the Caribbean, a one per cent decline in the illiteracy rate was found to increase foreign direct investment (FDI) by about 2.6 per cent (Daude, Mazza & Morrison, 2003). A joint OECD/UNESCO study has also found, for instance, that investment in human capital over the past 2 decades has accounted for about ½ a percentage point in the annual growth rate of 17 emerging market economies and among OECD member countries one more year of schooling can increase GDP per capita by 4 to 7 per cent (OECD, 2003). This discussion seeks to unearth the reasons that justify the government’s huge investment in human resource development particularly in the area of education. There are numerous benefits that can be derived from investing in HRD but only five of them are going to be examined here.

To begin with, it is an indisputable fact that human beings are active agents of production and for that matter many a government would not compromise on the capacity development of her people. Harbison argues that human beings are the active agents (of production) who accumulate capital, exploit natural resources, build social, economic and political organizations, and carry forward national development programmes. It is not an understatement to state that human beings create resources, in that it is only when the human mind is trained to find use for something that the thing becomes a resource. It is through human ingenuity that we are able to exploit the established natural resources. Explaining further, it is human beings who are able to develop the technology vital for exploiting and processing the natural resources such as space exploration and deep shaft gold mining (as is the case in Obuasi gold mines in the Republic of Ghana). If we see big and well established institutions in the country, be it public or private, let us not forget the fact that it is human beings who are able to...

References: Alsam, M., Bloom D. & Canning D. (2004). The effect of population health on foreign direct investment. NBER Working Paper, No. 10596.
Chinn, M. D. & Fairlie, R. W. (2004). The Determinants of the Global Digital divide: A cross- country analysis of computer and internet penetration. Economic Growth Centre. Retrieved February 15, 2014 from
Daude, C., Mazza, J. & Morrison, A. (2003). Core labour standards and foreign direct investment in Latin America and the Caribbean: does lax enforcement of labour standards attract investors? IADB mimeo.
Harbison, F. (1973). Human resources as the wealth of nations. London: Oxford University Press.
Harbison, F. H. & Myers, C. A. (1964). Education, manpower, and economic growth: strategies of human resource development. New York: McGraw-Hill.
OECD (2003). The sources of economic growth in OECD Countries. Paris.
United Nations (2003). World population prospects: The 2002 Revision, New York.
World Bank (2004). World development report 2004: Making Services Work for Poor People. Washington D.C..
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