Transcript Human Capital of the New Generation

Human Capital of the New
Generation
By
Jorah Ramlan
ISIS Malaysia
Introduction
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Human capital consists of:
Knowledge
Skills
Abilities
Integrity
Development of Knowledge
• Support for scientific research,
• Private incentive for R&D and innovation,
• Alternative opportunities for talented
individuals
• Learning-by-doing.
(Romer, 1996)
Sources of Knowledge
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Formal education
Informal education
Family influence
Government support
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
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)
Malaysia: Selected Employment
Statistics 2006
Population
27.2 million
0-14
32.3 %
15-64
63.4 %
65 and above
4.3 %
Employment
Labour force
67 %
Annual growth
2.6 %
Unemployed
3.1 %
New jobs created
1.6 million
Inflation
2.9 %
• 220,000 people join the labour force each
year
• 44,000 will possess tertiary qualification
Labour Force Participation 2006
2000
Total
1500
1000
500
0
15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64
Age group
labour force
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),
Competitiveness Index
(Challenge # 2)
(Most problematic factors for doing business in Malaysia)
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
Technology and the New
Generation
12000000
8000000
6000000
4000000
2000000
Year
internet subscriber
internet user
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
0
1990
People
10000000
Labour Force and Productivity
(Challenge # 3)
120
100
60
40
20
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
0
19
65
Units
80
Year
employed labourforce
output per worker
Percentage
Education and Human Capital
60
50
40
30
20
10
0
2001
2002
2003
2004
Year
no formal education
primary education
secondary education
tertiary education
Education levels and totals 2000-2007
Increase/decrease; = effect on human capital
2005
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
Personal and Economic
Requirements
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Personal
Self development
Financial independence
Social assimilation
Economic
Leadership development
Strategic investment
Profitability
Productivity
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
• 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
• Listening to young people
• Maintain an open channel of consultation
and feedback between government and
young people
• Monitoring and evaluation
• Monitoring
• Evaluation
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
Developing Human Capital
Knowledge,
Skills,Abilities
Formal
Institutions
(Schools,
Universities,
Workplace)
Political
System:
Incentives &
Disincentives
Values,Beliefs,
Attitudes
Social
Organisations
(Peers Groups,
Clubs, Networks
Social System:
Incentives &
Disincentives
Personality,
Intelligence,
Behaviour
Family Institution
(Parental, Sibling
& Extended
Family)
Economic
System:
Incentives &
Disincentives
• 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!
Thank you for your attention