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Top value creator is human capital and not tech: Study

 PTI |  2016-12-20 22:09:27.0  |  New Delhi

Human capital brings tremendous financial value to organisations as well as the global economy as for every USD 1 invested in workforce, as much as USD 11.39 is added to the GDP, says an analysis.

According to a Korn Ferry Economic Analysis, human capital represents to the global economy a potential value of USD 1.2 quadrillion. The analysis, conducted for Korn Ferry by the Centre for Economics and Business Research, noted that human capital is nearly 2.5 times more valuable to global economy than physical assets such as technology, real estate and inventory.

“Although organisations often put technology in the spotlight in the future of work, it is human capital that holds the greatest value for organizations now and in the future,” said Jean-Marc Laouchez, Global Managing Director, Solutions, Korn Ferry Hay Group.

Moreover, human capital is also the greatest value creator available to organisations. For every USD 1 invested in human capital, USD 11.39 is added to the GDP, the analysis noted. “When an innovation strikes gold, the connection between the value that is created and the team behind the technology is often lost. Leaders must recognize and capture the value of all their resources to succeed,” Laouchez said.

The report noted that even in nations weighted towards agriculture and industry, the value of human capital exceeds physical assets. In China, with human capital assets valued at USD 110 trillion and physical assets valued at USD 49 trillion, the human capital to physical asset ratio is 2.23. 

In India, the value of human capital is USD 80 trillion and the physical capital is valued at USD 48 trillion, making the human capital ratio 1.67.

“The economic reality of human capital value magnifies the importance of attracting and retaining the right people now and in the future. Technology alone cannot deliver the uplift in productivity and value every organisation needs,” said Jeanne MacDonald Global Operating Executive and President Talent Acquisition Solutions, Korn Ferry Futurestep. 

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