Some countries are “courting disaster” by allowing their human capital to stagnate through chronic underinvestment in education and high workforce exclusion, states a new study.
According to a report published on 11 October 2006 by the ‘Lisbon Council’, “painfully little” is being done to develop and maintain the human capital necessary to guarantee our future economic prosperity.
The study warns that countries ranking at the bottom of its ‘European Human Capital Index’ will face “long-term economic stagnation”. Indeed, in an increasingly globalised and competitive world, Europe’s economic future relies on its ability to innovate, which, in turn, depends highly on the quality of our human capital.
Furthermore, states the report, the gap that is growing between top and bottom performers undermine the convergence of living standards between European regions and countries: “As growth and wealth diverge, highly-skilled citizens from stagnating economies are unlikely to merely watch their standard of living decline relative to their European neighbours…emigrating to European regions with brighter economic growth prospects and the ability to pay attractive salaries, creating a brain drain within Europe.”
The report shows top scorers to be Sweden and Denmark, which spend more than twice as much on school, university and adult education as Spain, Ireland and Portugal. It also states that countries like France, Belgium, Germany and Italy are wasting their available human capital, using just over 50% of it, because the young, the old and the less-skilled are too often excluded from employment policies.
Lastly, the Lisbon Council warns that if current demographic and immigration patterns continue, Europe could lose 12.4 million employees – 8% of its workforce – by 2030, with 70% of this drop accounted for by Germany and Italy. Immigration, states the report, is the most obvious solution.