Human capital development refers to processes that relate to training, education, and other human capacity-building initiatives in order to increase the levels of knowledge, skills, abilities, values, and social assets of the citizens of any country.
Developed countries have become developed through continuous investment in research and skills development while Africa continues to underinvest in its future. Differences in economic growth across countries have become closely related to cognitive skills and unless we focus on developing these, we will remain underdeveloped operating much below our potential capacity as a continent.
"A highly developed human capital base will be the source of competitive advantage in the twenty-first-century global economy. Human capital, or the education, skill levels, and problem-solving abilities will be the competitive advantage of nations because they enable individuals to be innovative and productive in a highly competitive global economy.”
The rapid expansion of new digital technologies requires a totally different approach to human capital development. Countries must now focus more on the quality of education as opposed to mere access to education. Expansion of school attainment has not guaranteed improved economic conditions, especially in developing nations. It is critical that we look at the quality of education and not quantity. We need a new approach.
According to the African Development Bank, most economies in Africa continue to compete on the basis of factor endowments, with growth dependent primarily on low-skilled labour and natural resources. Moving up the value chain to more efficient and innovation-driven economies is therefore essential to increasing and sustaining economic growth.
In order to achieve this, Rwanda will require high-impact investments in education, science, and technology. A vibrant private sector is key for creating jobs, producing and marketing sophisticated goods and services, and latching on to global value chains. Further, improving the quality and inclusiveness of growth will require more citizen participation and greater accountability from public service providers to offer value for money as well as safety nets to build resilience to economic and social shocks and move poor individuals and communities out of poverty.
Rwanda’s Vision 2050 is based on four pillars which include;
· Human capital development
· Competitiveness and integration
· Agriculture for wealth creation
· Urbanisation and agglomeration
· Accountable and capable state institutions.
The human capital pillar "seeks to reap the economic benefits from its "demographic dividend” through an integrated approach that ensures that the decline in fertility is backed up by essential investments in human capital development and economic reforms so that the country has a healthy, well educated, and highly skilled labour force that is gainfully employed.”
Specific priorities of the human capital pillar include;
· Universal access to high-quality health care
· Universal access to high-quality education
· A transformed workforce for higher productivity.
Rwanda also aspires to be a knowledge economy built upon the skills of its human capital. This will require the following strategies;
1. The development of skills and technology for competitiveness
2. Revision of the education system to help build a competitive workforce, and the promotion of enhanced skills in Science, Technology, and Mathematics underpinned by innovative teaching methods based on ICT and curriculum reforms that take into account global developments;
3. Investment in ICT infrastructure projects and in research innovation and connection to global knowledge systems;
4. Broadening of the capabilities and economic opportunities of youth and women;
5. Support of inclusive financing systems, including safety nets, microfinance, and social entrepreneurship; and
6. Working towards establishing universal access to affordable health.
Rwanda seeks to build a knowledge economy and in order to achieve this, we must see the application of new innovative technologies that increase production volumes and therefore exports. The education policy must, however, match economic and social developmental objectives. We must strengthen research institutions to support developmental priorities, particularly in the agriculture, energy, ICT, technology, and services sectors.
The rapid expansion in urban populations will require good infrastructure, increased service delivery capacity, reduced overcrowding, curtail environmental degradation and reverse acute shortages of housing and productive jobs. These are critical human capital development issues.
We must also see a focus on increasing productivity and competitiveness through continuous learning, research, and the adoption of new technologies. This requires that companies are incentivised to continuously train and develop employees and increase their productivity so that we can be a competitive nation.
With regard to creating an enabling environment and a social safety net, social development policies must consider a welfare system that is affordable. This new welfare regime must focus on social interventions to assist the disadvantaged and the marginalised so that nobody is left behind.
Rwanda is, fortunately, implementing most of these policies and there is no doubt that consistent policy implementation will lead to a new inclusive economic development trajectory that puts people at the centre of its development.
Vince Musewe is an economist at Resource Africa Limited, (RAL) Kigali.