India drops further down to 105th position in the global Human Capital Index released by the World Economic Forum recently. Ranking last among its G20 partners, India still needs to make a lot of ground to match the human capital strength of developed or emerging economies.
The World Economic Forum (WEF) ranked 130 countries in its annual report called the Human Capital Index, which determines a country’s aptitude to inculcate, enhance and utilize its human resources for a comprehensive socio-economic growth. India was ranked 78th in 2013. Last year’s edition of the Human Capital Index ranked India at 100 out of 124 countries.
“The Human Capital Index seeks to serve as a tool for capturing the complexity of education, employment and workforce dynamics”, said Klaus Schwab, the Founder and Executive Chairman of World Economic Forum, at the Annual Meeting of New Champions — also known as ‘Summer Davos’ summit in Tianjin, China.
“The Human Capital Index quantifies how 130 countries are developing and deploying their human capital and tracks progress over time. It takes a life course approach to human capital, evaluating the levels of education, skills and employment available to people in five distinct age groups”, explained Schwab in the preface of the report.
Poor youth literacy rate in India
The WEF report praised India’s improvement in educational attainment over the different age groups but pointed out its poor youth literacy rate of 90% (103rd globally) – way behind the developed and emerging global markets.
However, India has shown significant improvement in quality of education system (ranked 39th), staff training (46th) and ease of finding skilled employees (45th). Although these suggests a primary avenue for improvement for the country and its expanding access to its numerous learning and employment opportunities, India is still poorly place in labour force participation, due to the huge employment gender gaps persistent in the country.
Countries such as Finland (1st in the index) have developed and deployed their human capital across both dimensions, maximizing their human capital potential, according to the report, E economies such as Vietnam (68th) are doing well on deploying their workforce but could radically improve their Index performance and boost their human capital potential by further improving Learning outcomes, to keep pace with the requirements of a complex modern economy.
However, in economies such as India (105th) and Nigeria (127th) efforts are needed to simultaneously improve the development as well as deployment of the nation’s human capital potential across the Learning and Employment dimensions for all age groups. Even Bangladesh, Bhutan and Sri Lanka being much smaller players in the world economy, are placed higher in table than India. India should quickly focus on understanding the factors contributing to the development of an educated, productive and healthy workforce.
India ranks last among G20 members
Among the G20 group of developed economies who continues to put in significant effort to promote and deploy human capital high on its agenda, Japan (4th) is the country with the highest human capital performance, followed by Canada (9th) and Germany (11th). China (71st), Saudi Arabia (87th), South Africa (88th) and India (105th) make up the lower-middle and lower ranks of the group. Japan, has maximized 26 pc points more of its human capital potential than India, the lowest-ranked one in the G20.