What is Human Capital?

A measure of labour’s capabilities, including skills, working capacity, education, health, and intelligence, is referred to as Human Capital. The concept of human capital emphasises the idea that not every resource is created equal, but that this difference may be covered with the right training and funding. For a business, an employee’s education, experience, and talents are crucial since they add value to the company and the economy as a whole. 

It is the sum total of the skill and expertise of engineers, doctors, professors, and workers of all types who are engaged (or have the capacity and expertise to be engaged) in the process of production.

Since they assist in boosting productivity, which contributes to profitability, human capital is regarded as crucial for businesses. Therefore, according to the human capital principle, a company can increase its profitability by investing more in its personnel.

Human Capital and Human Development are two different concepts. The former is a measure of labour’s capabilities, including skills, working capacity, education, health, and intelligence. However, Human Development is the process of enhancing human potential in terms of skills and rights.