Abstract Canada is a vast and diverse country. It has managed to become one of the known countries in the world. Despite its population, it is currently facing a “skills problem” which is getting worse because of the fact that Canada’s population for skilled worker is becoming more of an inverted pyramid.
Economy is the management of the resources and income of a nation. In this paper, the wider scope will be considered which the global economy is (“Economy”, par.3). Skilled workers that are belonging in the young age group are decreasing while many are already in the retirement age. So what can be the remedy for this dilemma? This paper aims to address the role of Human Capital in the new global economy. This paper aims to look into Canada as an example of determining the role of Human Capital in the new global economy. The ways on how to improve the economy are to be explored upon.The Role of Human Capital in the New Global Economy When people talk of capital, the thing that will most likely appear in their minds would be the monetary component in an economy.
It is a misconception that money is the only thing that serves as a fuel to the engines of the global economy. In fact, there is another kind of capital which is the Human Capital. Skills, knowledge, health and other human potentials serve as the main component here (Becker, par.
2).Categories of NationsIn order to have a deeper grasp of the discussions to follow, it should be clear that there are three known categories of nations namely the Industrially Advanced Countries, Oil Exporting Countries and the Less Developed Countries.Industrially advanced Industrially Advanced Countries are those with developed market economies “based upon large stocks of capital goods”, advanced in terms of technology and have a well-educated work force. Countries belonging to this category are United States, Canada, Australia, Japan, New Zealand, and most of countries found in Western Europe (McConnell & Brue, 1990, p.825).
Oil Exporting Countries Countries belonging to this category depend on oil for their economy. Countries in the Middle East are under this category.Less Developed Countries The third and the last group are the less developed countries.
Countries in this category are unindustrialized. Considering the literacy rate, it is relatively lower than the Industrially Advanced Countries, which then results to a higher unemployment rate. The low literacy rate also causes primitive technological advancements in terms of production.
And lastly, Less Developed Countries are mainly directed to agriculture (McConnell & Brue, 1990, pp.825-826). Canada, which is an Industrially Advanced Country, is currently facing a skills crisis (Beatty & Morris, par.
1). The population ratio shows that skilled workers are mostly on the retirement age and less number of skilled workers belongs to the young age. Thus, it has acquires an inverted pyramid structure. This situation is similar to that of the United States. “Canada is a wealthy, highly developed country with enormous promise”, but in line with realizing this promise is a need for skills and knowledge (Beatty & Morris, par.13).
So what would be the right thing to do? The answer would probably be to invest in Human Capital. This refers to the “expenditures on education and training” that would further enhance the skills and productivity of the workers. It was said in the earlier years that people who invest more in education, specifically those who pursue college or even higher education is more likely to have a higher earnings than those who only finished high school education (McConnell & Brue, 1993, p.546). In contrast with this statement, isn’t it that those who didn’t pursue college education have more chance of working full time right after finishing high school? But also, higher earning job opportunities are given to those with a higher knowledge and are more skilled.
Education and training are considered as the most vital investment in human capital. The reason for the said statement is that; it is through education and training where people acquire skills (Becker, par.3). Because of the slow labor force growth, the following market predictions were made: It is likely that, by barring a major recession, there will be a lower unemployment rates. It can be expected to be advantageous for minorities and to those workers who are usually least hired. Upon considering the possibility of the labor supply to slow relative to labor demand, then wages can actually increase. When young workers refuse to enter the labor force then the employers would have to retain and attract more of the older workers. Since immigration plays a critical role in improving the economy, countries that are in need of workers are more likely to find ways on how to attract workers.
Not only workers, but the “best and the brightest workers”. With this concept, it is an irony that in Less Developed Countries most of the “best trained and highly motivated workers” migrate to seek a better fortune in the Industrially Advanced Countries, such is termed as brain drain (Beatty & Morris, par.10-12; McConnell & Brue, 1996, p.794). Technological advancements have made a big impact on the world, almost everybody are experiencing the fruits of technology. It has made people’s lives more convenient, but using technology for the betterment of a country’s economy, it would require a people who can manipulate and operate these machines and devices in a way that it would be maximized, and it will be efficiently and effectively used. Because through this, there can be a great possibility that there would be an increased production, with the efficient use of resources.Conclusion Human Capital plays an essential role in the new global economy.
By investing more in education and training, its equality in terms of productivity will be improved. Countries like Canada must invest on education. Since their economy depends on international trade, they are in need of educated people who can be the fuel for the economic development (Beatty & Morris, pa.
7). The dilemma is that not everyone can afford it, even if there is a ready source, can people from low-income families afford it? Human Capital is so vital that it can cause a progress, or it can make a country’s condition worse. If the entire skilled worker would be attracted to one country, and thus migrate, then, the country where that skilled worker came from would not be able to utilize fully and efficiently it’s Human Capital in that case. Assistance is needed. People who can drive the country’s economy are not only those educated ones. There are many natives, aboriginals, and people from low-income families waiting to be educated.
Skills are acquired. It is not too late.ReferencesBeatty, P.
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