Human Capital-Based Strategy for Regional Economic Development

Abstract

Regional policy makers have always wrestled in vain to come up with regional economic development policies that are coherent and uniform and can be defended on economic grounds. However, most policies are either ad hoc or based on political considerations. The relevant literature dealing with regional economic development strategies is fragmented. It also does not provide any guidance to formulate an overall long-term strategy based on an integrated analytical foundation. It incorporates elements like entrepreneurship, human capital, workplace training, capital accumulation, R&D effort, innovations, technology, and technological cycles. This article proposes a human capital accumulation strategy for regional economic development that not only integrates the above diverse elements of the literature into a cohesive analytical framework but also provides the rationale for it to be part of a long-term policy for economic development on efficiency grounds.

Comprehensive Literature Review on Human Capital Investments Theory: What’s in it?

“…He further says that HC has directly contributed to development by directly accumulating the knowledge stock of the region. Mathur (1999) further highlights the indirect contribution of HC to regional development by increasing the productivity of other workers and capital, promoting agglomeration of economies, and stimulating house hold investments in children that ultimately contribute to growth and development. However, as empirically examined by Eicher and GarciaPenaloasa (2000), the stock of educated workers (HC) has a dual role of determining both the degree of income inequality and the rate of growth.…”

Highly qualified in the Czech Republic

“…The theory of human capital considers education as investment that brings future benefit in higher salary as reward for larger knowledge and developed skills displaying in higher work productivity or technological progress as benefit for the society (Becker, 1964(Becker, , 1993. As Mathur (1999) emphasizes, the modern theory of human capital-based growth provides a basis for a regional economic development strategy. Mathur (1999) states, the growth and development are stimulated by human capital both directly and indirectly.…”

“…As Mathur (1999) emphasizes, the modern theory of human capital-based growth provides a basis for a regional economic development strategy. Mathur (1999) states, the growth and development are stimulated by human capital both directly and indirectly. Human capital contributes to increase of knowledge and to knowledge stock of the economy.…”

Growth of new firms and spatially bounded knowledge externalities

“…But aside from these technological drivers, 'softer' human capital-related elements are also important. Lucas (1988) and Mathur (1999), for instance, argue that a welleducated workforce has ample opportunities to absorb and use information. Therefore, characteristics like (higher) education are often related to economic growth.…”