Professional Documents
Culture Documents
Justin Slay
Justin Slay
Modern growth theory sees human capital as an important growth factor.[citation needed] Further
research shows its relevance for democracy or AIDS.[15][16]
Competence and capital[edit]
The introduction is explained and justified by the unique characteristics of competence (often used
only knowledge). Unlike physical labor (and the other factors of production), competence is:
Expandable and self-generating with use: as doctors get more experience, their competence
base will increase, as will their endowment of human capital. The economics of scarcity is
replaced by the economics of self-generation.
Transportable and shareable: competence, especially knowledge, can be moved and shared.
This transfer does not prevent its use by the original holder. However, the transfer of
knowledge may reduce its scarcity-value to its original possessor.
Example An athlete can gain human capital through education and training, and then gain capital
through experience in an actual game. Over time, an athlete who has been playing for a long time
will have gained so much experience (much like the doctor in the example above) that his human
capital has increased a great deal. For example: a point guard gains human capital through training
and learning the fundamentals of the game at an early age. He continues to train on the collegiate
level until he is drafted. At that point, his human capital is accessed and if he has enough he will be
able to play right away. Through playing he gains experience in the field and thus increases his
capital. A veteran point guard may have less training than a young point guard but may have more
human capital overall due to experience and shared knowledge with other players.
Competence, ability, skills or knowledge? Often the term "knowledge" is used. "Competence" is
broader and includes cognitive ability ("intelligence") and further abilities like motoric and artistic
abilities. "Skill" stands for narrow, domain-specific ability. The broader terms "competence" and
"ability" are interchangeable.
Knowledge equity (= knowledge capital knowledge liability) plus emotional equity (= emotional
capital emotional liability) equals goodwill or immaterial/intangible value of the company.
Intangible value of the company (goodwill) plus (material) equity equals the total value of the
company.
ffects of the division of labour.