Statsguru: India fares poorly in human capital

Human Capital Index in 2017: India ranks behind not only other developing economies but also Nepal, Serbia, and Ghana

India ranks 103rd among 130 countries on the World Economic Forum’s (WEF’s) Human Capital Index in 2017, behind not only other developing economies but also Nepal, Serbia, and Ghana (Chart 1).

The Human Capital Index measures a country’s performance on four key areas — capacity, based on past investments in education; deployment, which measures the application and accumulation of skills; development, which is the education of the next generation workforce and the continued skilling of the existing one; and know-how, which measures the breadth and depth of specialised skills used at work.

The report estimates the South Asian and Sub-Saharan African regions as having the largest gap on the development index, while the developed regions of North America and Western Europe have comparatively smaller gaps, as shown in Chart 2.

The relationship between the index and per capita income is not as straightforward, as seen in Chart 3. For example, despite similar income levels, the UAE significantly outperforms Kuwait.

Of the four areas, India scores highest on development, followed by know-how (Chart 4). On the development sub-index, the country’s better performance can be traced to the absence of any gender gap in the secondary enrolment levels and better perception among executives surveyed by the WEF about the education system meeting the needs of a competitive economy (Chart 5).

In the case of know-how, the country fares well due to higher scores on economic complexity and availability of skilled employees (Chart 6). The former is a measure of the degree of sophistication of a country’s “productive knowledge”, while the latter is based on an executive opinion survey carried out by the WEF in 2016-17.

Unless otherwise indicated by a superscripted note, “value” refers to percentage rates for the corresponding age group. The following exceptions apply;  1: Survey response on a 1–7 scale (1 = worst score, 7 = best score), 2: Data on a normalised 0.090 - 1.000 scale (0.090 = best score, 1.000 = worst score) and 3: Data from -2.33 (worst score) to 2.21 (best score)

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