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Human Capital of the New Generation

Human Capital of the New Generation. By Jorah Ramlan ISIS Malaysia. Introduction. Human capital consists of: Knowledge Skills Abilities Integrity. Development of Knowledge. Support for scientific research, Private incentive for R&D and innovation,

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Human Capital of the New Generation

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  1. Human Capital of the New Generation By Jorah Ramlan ISIS Malaysia

  2. Introduction • Human capital consists of: • Knowledge • Skills • Abilities • Integrity

  3. Development of Knowledge • Support for scientific research, • Private incentive for R&D and innovation, • Alternative opportunities for talented individuals • Learning-by-doing. (Romer, 1996)

  4. Sources of Knowledge • Formal education • Informal education • Family influence • Government support

  5. Importance of Human Capital • Human Capital is very significant to growth/development • New Generation is the source for human capital • Various types of capital • Human capital = Labour force; labour force ≠ human capital

  6. Unemployment in Malaysia(Challenge # 1) • More than 50 per cent of the unemployment total are young population/new generation (age group 15-29) (MOHR, 2006)

  7. Malaysia: Selected Employment Statistics 2006

  8. 220,000 people join the labour force each year • 44,000 will possess tertiary qualification

  9. Labour Force Participation 2006

  10. Quality, Quantity, and Productivity • Quality and quantity are important for productivity • Quality of human capital refers to education level, formal and informal education, worldwide marketability • Quantity of human capital refers to market size, consumer spending • Productivity refers to output per person, Total Factor Productivity (TFP),

  11. govmt bureaucracy corruption inadequately educated workforce policy instability restrictive labour regulations poor work ethics inadequate infrastructure foreign currency regulations access to financing inflation tax rates tax regulations crime and theft govmt instability 0 2 4 6 8 10 12 14 16 18 Competitiveness Index(Challenge # 2)(Most problematic factors for doing business in Malaysia)

  12. Technology and the New Generation

  13. Labour Force and Productivity(Challenge # 3)

  14. Education and Human Capital Education levels and totals 2000-2007 Increase/decrease; = effect on human capital

  15. Labour Market Mismatch(Challenge # 4) • In-demand skills and talents • Moving up the value chain • From ‘B’ grade workers to ‘A’ grade workers • Service on-demand • Competitiveness • Human capital flight

  16. Personal and Economic Requirements • Personal • Self development • Financial independence • Social assimilation • Economic • Leadership development • Strategic investment • Profitability • Productivity

  17. Policy Issues(Challenge # 5) • Youth development policy • Poor coordination among policies and sectors that affect youth and limited accountability for youth outcomes • Weak voice of young people in monitoring and providing feedback on the quality of policy and service delivery • The paucity of proven successes

  18. Developing a coherent framework and integrating it with national policy • A coherent national framework for youth • Integration with national policy planning and implementation mechanisms • Building capacity • Role of the education system

  19. Listening to young people • Maintain an open channel of consultation and feedback between government and young people • Monitoring and evaluation • Monitoring • Evaluation

  20. Conclusion • Re-evaluation of political, social and economic systems’ incentives and disincentives • Strengthen formal institutions, social organisations and family institutions • These are the requirements for the development of human capital of the new generation

  21. Knowledge, Skills,Abilities Values,Beliefs,Attitudes Personality, Intelligence, Behaviour Formal Institutions (Schools, Universities, Workplace) Social Organisations (Peers Groups, Clubs, Networks Family Institution (Parental, Sibling & Extended Family) Political System: Incentives & Disincentives Social System: Incentives & Disincentives Economic System: Incentives & Disincentives Developing Human Capital

  22. Issues and challenges are dynamic for every generation but need to be met for sustainable economic growth • The race for human capital will intensify, strategic planning of this resource is essential • Gestation period for return on human capital investment may be longer that other investments, hence appropriate measures need to be taken promptly • Human capital and new generation: develop it or lose it!

  23. Thank you for your attention

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