The Human Capital Theory highlights the importance of human resource education for development. The more educated people are, not only can increases in their income and productivity be expected, but also in the human and physical factors that interact.
In this sense, it is necessary to invest in greater training and in the development of Human Capital, as well as in the permanent establishment of educational institutions that respond efficiently and in a timely manner to the needs of the productive sector.
Key Words: Human capital, Education, Productivity, University.
Introduction
The University as a generating and transforming factor of values, should serve as a promoter guide, so that new approaches in education are conceived as an alternative of social, cultural and ethical development that also serve for the development of capacities and skills essential for the competitiveness of the productive and labor apparatus. Consequently, Education and the generation of knowledge become a crucial instrument to face the external challenge that is competitiveness.
Human capital is the knowledge that each individual possesses. As the individual increases their knowledge, their human capital will grow. It is not necessary to be linked to an organization, in fact the company Yo SA, is a good business for those who choose to sell their knowledge and experiences to companies eager for what you know. They are aware that their future depends on mental strength and not on muscular strength.
Attitudes are based on all human capital. They see the behaviors of people and as all behavior can be modified, this others say that it is the most difficult task to modify, since the internal world of human resources comes to play an important role.
People's attitude is part of the internal world of the subjects. The external world is a faithful reflection of what happens in our internal world, therefore, if we want to modify the external world, we must first modify the internal world. For this reason, people's attitudes have a lot of internal aspects and that is why we place them at the base of the human capital pyramid.
The right attitude is the first step. Employees with higher performance and promotion in companies do so not only because they have unique and indispensable knowledge (high human capital), but that is the result of having adopted and had a correct attitude in relation to the environment.
Human capital
Etymologically "capital" comes from "caput" which means head: By analogy it means the best, the main thing. In Accounting, it refers to the net value, to the assets of a company after deducting all its obligations. With "human", from the Latin homo - inis the biological nature is determined. The terms put together produce the new paradigm. The term "capital" was actually used first in the individual field, then in the company, and later in reference to a country. Adam Smith (1776), in the Wealth of Nations speaks of the "social capital" of a company. Thus the concept went from the company to be applied in a nation. After many years and until the studies of Schultz, the influence had been of the company, later, with the obtaining of the Nobel prize,eyes turned to nations and then to its application in business again. This may be due to the weak and unconvincing philosophy of the gravitation of "human resources" on business success.
Human capital is considered as an enabling factor for development and economic growth, for its training various elements come into play, the most important are education and job training, because through them skills, talents, skills are discovered and developed. the skills and abilities of individuals.
Studies by Theodore Schultz (1959), had a lot of momentum, thanks to the theoretical developments made by Gary Beckerand Jacob Mincer. Human capital has been defined by the Organization for Trade and Economic Development as:
“…. the knowledge, skills and other attributes that individuals possess and that are relevant to economic activity…. ” (OECD: 1998).
According to this definition, human capital is considered to be the accumulation of previous investments in education, job training, health and other factors that increase productivity. Therefore, all human attributes must be taken into account, not only at the level of education, but also the degree to which a person is capable of putting into productive action a wide range of abilities and capacities, understood as capacity the power for the development of higher mental processes (memory, thought and language), by ability is understood the way in which higher mental processes are operationalized, which are manifested in the different forms of accumulated knowledge, which allow their possessor,effectively develop various activities to achieve productivity growth and economic improvement; understanding by economic all those activities that can create income or well-being. Becker (1983).
Human Capital constitutes an intangible set of skills and capacities that contribute to raising and conserving productivity, innovation and employability of a person or a community; Employability is understood as the possibility of people to find a job that compensates their work skills, through different influences and sources, such as: Organized learning activities through formal and informal education, through training developed in the different jobs of the organizations, according to each individual and the context of use. Schultz (1983) has pointed out five factors that have contributed to improving human capacity:
- Health equipment and services, broadly designed to include all expenses that affect the life expectancy, strength, endurance, vigor, and vitality of a people On-the-job training, including old-style learning, organized by the companies Formal education organized at elementary, secondary and higher levels Adult study programs that are not organized by companies, including outreach programs Migration of individuals and families to adjust to changing job opportunities.
For Schultz (1983), the acquisition of educational elements that allow complex learning in increasing degrees, is the starting point of a process of accumulation of human capital, where the complexity of the necessary knowledge and skills evolve according to progress. technological. In view of these approaches, it is necessary for Human Capital to find an economic applicability through the market, so that people, as a consequence of greater training, find opportunities that allow them, improve their performance at work, increase productivity and boost the growth of the economy. In this sense, economic policy must conceive of human capital as an asset that contributes to growth, and promotes the "employability" of the workforce,creating the necessary conditions for people to put into practice their "entrepreneurship". And that technological - economic progress leads to a dynamic of accelerated change of the characteristics of "employability", which rewards their labor capacities, which are transformed each time a technological cycle is completed in the economy.
In the same order, Gary Becker (1983) defines human capital as the set of productive capacities that an individual acquires by accumulating general or specific knowledge that can be accumulated or used. It is an individual option, an investment. It is evaluated by the difference between the cost of education expenses and the corresponding expenses (purchase of books…), and the cost of productivity, that is, the salary that you would receive if you were immersed in active life, and your updated future income.
As a result, the individual makes an arbitrary assessment between working and continuing a training, which allows him to receive higher salaries than current ones in the future. He also takes into account the maintenance of his psychic capital (health, food); optimizing their capabilities and preventing them from depreciating too much, either because of the devaluation of their general and specific knowledge, or because of the degradation of their physical and moral health, and investing with a view to increasing their future productivity and income. The individual will have to act like all investments, since he has to face the law of diminishing returns, and the irreversible nature of these expenses.
In this context, the theory of human capital distinguishes two possible forms of training: General training, acquired in the educational system, training. Its transferability and its purchase, explains the fact that it is financed by the worker, since it can be enforced on the entire labor market. On the other hand, the company is not, obliged to bear the costs of training a person, capable of making that training prevail in another company willing to improve remuneration, which could encourage them to leave the organization. Therefore, the financing of the activity takes the form of a more reliable remuneration. Therefore, the agreement between the worker and the company consists of the purchase, by the company, of the "labor force" and the purchase of training for the worker, by another. Specific training,acquired within a production or service unit, allows the worker to develop his productivity within the company, but nothing, or little, outside it. ILO (2004).
It should be noted that the concept of human capital is associated with people's knowledge (capacity and commitment), and is related to competences (knowledge, skills and professional qualities). Likewise, it has to do with the ability to innovate and improve, and with commitment and motivation (dedication and quality of performance).
For the ILO (2004), the theory of human capital and the subsequent studies carried out, have shown that education is an essential good for the individual and for society as a whole, since it expands the possibilities of action and choice of individuals and society in general. Human capital, to the extent that it is an economic potential that is deposited in the capacities of people to perform economic acts, is strongly influenced, by the economic characteristics, of the person's environment, and in the specific market in which that the person unfolds.
It should be clarified that an increase in human capital due to the effect of education does not immediately translate into an increase in productivity and in the competitiveness of the workforce, unless the productive system uses this human capital efficiently. Therefore, it is necessary for individuals to receive training with solid knowledge bases, which allow them to be entrepreneurs and capable of gradually modifying the dynamics of demand for human capital and business dynamics.
Therefore, the university is considered as an important vehicle for the development of the human capital of a country, because through research, extension, and teaching, the generation of technological scientific ideas is promoted, which contribute to development. economic and social of the society in general. Now, given that human capital is a strategic resource for business productivity processes, it is necessary to resize it for the creation of economic capital in them and to favor the dynamics of integral development of the country.
The education
It can be said that education is a fundamental element in the formation of human capital, and therefore, encourages economic growth, promotes job qualification and technical production for solving problems, as well as physical and functional mobility because Whoever has degrees, experience and is fluent in languages is the one who has the best possibilities to compete in the labor market. This has been defined by CEPAL / OREALC (1992), as a process of intentional action on the members of a human community, mainly on the
young people, with the purpose of developing their personality, training them for work and adapting them for social life. It is a process that accompanies specific societies during their evolution and that in some way reflects changing structures of these organizations, their contradictions and problems, their constant growth and diversification. Likewise, education as a development strategy to increase competitiveness and social inclusion, makes knowledge a fundamental input of the production process, with which investment in human capital is “more than ever” necessary for technological progress, competitiveness and growth. On the other hand, education is also considered a privileged instrument for the development of social capital and social cohesion;helping to improve reciprocal relationships, trust, tolerance and social integration.
It is undeniable that the first and inescapable task of education is to teach knowledge capable of criticizing one's own knowledge, avoiding double alienation: that of the mind through its ideas and that of ideas through the mind. Thus, the first objective of the education of the future, will consist in equipping students with the ability to detect and correct errors and illusions of knowledge and, at the same time, teach them to live with their ideas, without being destroyed by them. For this reason, education has been considered as an element of social transformation to carry out and achieve structural modifications that allow society to evolve.
Now, given the breadth of education, the following types can be identified: social, cultural, political, moral, and professional.
With regard to professional education, it can be said that it is an education aimed at preparing people for professional life. Among its objectives is the training of individuals to face the environment inside or outside their organizations; In relation to this, Chiavenato I. (2001), affirms “professional training is….., which seeks to prepare and train man, for the exercise of the educational system, training, research and technological development, within the framework of the central elements of his proposal, that is, productive transformation, social equity and political democratization.
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of a profession, in a certain job market; Its objectives are broad. ….., qualify the man for a future profession ”. (p. 67).
As stated by the author, it can be inferred that universities are in charge of training professionals in various branches of knowledge, by offering a series of programs, courses, which must be adapted to the requirements of society and prevailing changes From the market.
Taking into account the above and understanding that knowledge is selective, it can be said that the ability to select and process information is related to a specific way of understanding social reality and acting on it. In this, higher education plays a preponderant role. It is considered as “the force of the future”, as it constitutes one of the most powerful instruments to make change. One of the most difficult challenges is modifying thinking in ways that cope with the increasing complexity, rapidity of change, and unpredictability that characterize the world. For this reason, it is essential to reformulate educational policies and programs in the medium and short term to favor future generations.
Morín (1999), points out that in the face of the flood of circulating information, it is necessary to discern which are the key information, while in the face of the extensive number of problems, it is necessary to differentiate those that are key problems. Therefore, the pertinent information, problems and meanings must be selected exposing the context, the global, the multidimensional and the complex interaction. As a consequence, education must promote a "general intelligence" capable of referring to the global, multidimensional context and the complex interaction of the elements. This intelligence must be built from existing knowledge and its criticism, whose fundamental configuration is the ability to pose and solve problems, for which,intelligence uses and combines all the particular abilities of the individual.
For Morín (1999), education consists of putting into practice the proper means to ensure the formation and development of a human being; where teaching allows the student to transmit knowledge so that he understands and assimilates it, however, its scope is limited, as it is only restricted to the cognitive aspect. Likewise, he affirms that teaching is an insufficient concept and the word education is excessive and lacking at the same time, which is why he coined the term “educational teaching”. Noting that the mission of this educational teaching, will be to transmit not pure knowledge, but a culture that allows understanding the human condition, helping to live, and at the same time, favor an open and free way of thinking. Porter (1993), establishes that education could be linked to the competitiveness of the company and its development phases,through three aspects:
- Education as a factor not separate from production Education as the criterion of learning by doing Education as a mutual relationship between technology, human capital and economic conditions.
It means then that this competitiveness implies knowledge, technology, information management and skill, that is, it means raising the quality of educational centers and the training of human resources, scientific development, technical progress and the accumulation of information, therefore that it is necessary to prioritize investments in education, technology and research, thus incorporating them into productive activity.
Similarly, Porter (1993) indicates that there are two fundamental aspects to consider around the competitiveness of a nation: on the one hand, the intervention of the State as a regulator of labor market policies, and on the other, the companies and educational institutions, guiding the latter towards the search for elements that allow the integration of the productive sector with the educational sector.
In relation to this, the World Bank maintains:
“… A comprehensive education must be sought that ensures the acquisition of significant knowledge and the development of capacities that allow the university student to participate in the social reality of which he is an active part and in front of which he performs, not only as an expert in the knowledge of a specific field, but as a competent citizen ”.
Conclusions
The evolution and relevance of the concept of human capital has allowed it to be considered as part of the set of intangible assets of companies based on knowledge, understanding by knowledge the new producer of economic and organizational capital. Conceiving that the added value of intellectual capital is given by its commercial application and social impact.
Although the term human capital presupposes an assessment of the human factor within the company, it should not be overlooked that all capital is depleted if it is not used appropriately; however, its proper use goes beyond its administration., the need for the management of human talent that leads to investment in the training of competencies that promote the growth of the company, both in its measurable indicators and in the intangible objectives associated with the business object, must be understood.
The Human Capital Theory highlights the importance of human resource education for development. The more educated people are, not only can increases in their income and productivity be expected, but also in the human and physical factors that interact.
Universities and the productive sector must seek binding mechanisms that allow universities to provide consulting services, training and technological development and train professionals who truly have an economic-social conscience that promotes competitiveness and sustainable development. that the country requires.
In this sense, it is necessary to invest in greater training and in the development of Human Capital, as well as in the permanent establishment of educational institutions that respond efficiently and in a timely manner to the needs of the productive sector.
It is necessary for universities to reorient their social role to address the issue of education for sustainable development, establishing the link between training, research on different social problems and the search for actions to overcome them through activities, that pose great challenges, and profound problems, for human coexistence and relationships with the environment that require the efficient and participatory design of community action policies and programs, therefore, they must promote studies and research activities that are essential to sustain an updated and empirically informed teaching that provides services to society in general to promote comprehensive development alternatives to local and regional communities.
References
- Becker, Gary (1993). Human capital. University of Chicago Press, Becker Gary S. (1983a), Human Capital. A theoretical and empirical analysis referring fundamentally to education, Alianza, Madrid.Becker, G. "Human Capital", Columbia University Press for NBER. New York, 1964. “Investment in Human Capital: a theoretical analysis”. Journal of Political Economy.Vol 70. University of Chicago Press. Chicago, 1972. pp 9-49.Blaug, Mark. "The correlation between education and earnings: what does it signify?" Higher education. Vol 1, Number 1. Netherlands Springer Netherlands Editor, 1972. pp 53-76. "The empirical status of human capital theory: a slightly jaundiced survey". Journal Economic Literature. Vol 14, issue 3. USA. Roger H Gordon Editor and John McMillan, 1976, pp 827-855.CEPAL / OREALC. (1992), “Education and knowledge:axis of productive transformation with equity. " Chiavenato, I. (2001) Human Resources Administration: Higher Education and Society. Editorial McGraw Hill, Interamericana, Fifth Edition. Santa Fé, Bogotá, Colombia Delors, Jacques. (1997) "Education contains a treasure" UNESCO Mexico Editions. Morín Edgar (1999.) The seven knowledge of the education of the future Unesco. Paris, 13 France.Morín, Edgar (2001) “Introduction to complex thinking” Fourth impression, Editorial Gedisa. Barcelona, Spain, OECD (1998), Human Capital Investment. An international comparison. Center for educational research and innovation, France.OIT (Cintefor) (2004) “Social dialogue and professional training”. Porter, Michael (1993), “The competitive advantage of nations”, Editorial Vergara. Buenos Aires.Schultz, TW (1983). " Investment in human capital,education and society ”, volume 8.UNESCO (1998),“ World Education Report ”/ Unesco Editions. Madrid.
In 1979, the Nobel Prize in Economics was awarded to Theodore Schultz of the University of Chicago and Sir Arthur Lewis of Princeton University for their groundbreaking theories on labor costs. The Chicago Tribune obituary on Schultz, who died February 28, 1998, declares him the "Father of Human Capital." One of the few and most significant books on the subject is entitled "Investing in people" (1982).
The Theory of Human Capital must be considered within the framework of the analysis of neoclassical theory. From the works of Becker (1962,1964) and Mincer (1974), it is considered that the productivity of an individual depends on his endowment of human capital, ceteris paribus. It predicts that, on average, higher levels of education can expect higher incomes and that the demand for education depends on direct and indirect costs and future income. Schultz (1961) and Denison (1962) showed that education contributes directly to national economic growth by improving the quality and productivity of the labor force.
In 1992, Gary Becker received the Nobel Prize in Economics for his theories on Human Capital, which added further interest to the concept. According to G. Becker (1983), the human being inverts himself. Answer questions like: What is the value of time? What are the differences between the various types of education? Who pays for education? It also explains why women have lower incomes than men and how wealth is distributed.
The law of diminishing returns establishes that the marginal product of a variable factor of production decreases, beyond a certain level, as the quantity of that factor used increases. In other words, to the extent that a company uses more than one variable input with a quantity of fixed inputs, the marginal product of the variable input ends up decreasing.
“Transferable skills and qualifications that enhance people's ability to take advantage of educational and training opportunities available to them with a view to finding and keeping decent work, advancing in the company or changing jobs and adapting to evolving technology and labor market conditions ”(art. 1, d)
There are opposing theories related to the role of education and its influence on income generation. Bowles-Gintis (1976) developed a theory in which the main role assigned to education is to socialize individuals and not to develop their cognitive and psychomotor abilities. In a capitalist economy, the school favors the development of the same values that exist in the labor market and in the productive system, such as obedience, competition, conformity and acceptance of group work. Education is seen as a method used by the ruling classes to perpetuate their power. The authors argue that the main factor of income inequality resides in social origin and not in the endowment of human capital.
In its proposal entitled Productive Transformation with Equity, the Economic Commission for Latin America and the Caribbean (ECLAC) upheld a central idea, around which the others were articulated: the deliberate and systematic incorporation and dissemination of technical progress constitutes the pivot of productive transformation and its compatibility with political democratization and growing social equity. The proposal makes clear the difference that separates an international competitiveness that allows raising the standard of living of the population by increasing productivity, and another form of competitiveness that is based on the depredation of natural resources and the reduction of actual wages. In the case of the first, it is technical progress that allows the convergence between competitiveness and social sustainability,and, fundamentally, between economic growth and social equity. Multiple factors intervene in the incorporation and dissemination of technical progress. Among them, the ECLAC proposal highlights the strengthening of the business base, the technological infrastructure, the growing openness to the international economy and, very especially, the training of human resources and the set of incentives and mechanisms that favor access and generation of new knowledge. In this last area, the lags in the education-knowledge axis compromise possible advances in other aspects of the incorporation and dissemination of technical progress. Human resources and development are two closely related topics. Recognition of this link has led ECLAC to initiate,in conjunction with UNESCO's Regional Office of Education for Latin America and the Caribbean (OREALC), a systematic effort to deepen the interrelationships between
Sustainable development is that development that is able to satisfy current needs without compromising the resources and possibilities of future generations. Intuitively, a sustainable activity is one that can be maintained. For example, cutting down trees from a forest ensuring afforestation is a sustainable activity. In contrast, consuming oil is not sustainable with current knowledge, as there is no known system to create oil from biomass. Today we know that a good part of human activities are not sustainable in the medium and long term as they are proposed today.
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