Academic journal article Asian Social Science

Methodology for Integral Evaluation of Human Development Level as Exemplified by the Leading Countries of Asia-Pacific Region and European Union

Academic journal article Asian Social Science

Methodology for Integral Evaluation of Human Development Level as Exemplified by the Leading Countries of Asia-Pacific Region and European Union

Article excerpt

Abstract

The authors examine evolution of approach towards understanding of human capital and qualitative transformation of human's role in economics, conditioned by the transition to post-industrial society. Neo-classical approach has a special role in development of human capital theory. Examining human capital as a source economic growth of any country, the authors point out qualitative perfection of human potential. The article introduces methodology for integral evaluation of level of human development exemplified by the leading countries of Asia-Pacific Region an European Union. In addition, complex evaluation of human capital development is discussed as a two-side process: from one side, it is a formation of human abilities and skills, from the other side - realization of gained abilities and skills for the use of production or for recreation, cultural, political activity. Several key points of human development are pointed out for the purposes of a complex evaluation of human potential.

Authors' methodology of calculation of human development index is distinguishable from conventional methodology by at least one main principle: the authors believe that conducted experimental calculations might provide the most complete idea of human development from the point of view of three interconnected characteristics: human capital, human resources, and evaluation of conditions for formation and implementation of abilities and skills of a person.

Keywords: human capital, human potential, methodology, complex evaluation, Human Development Index, Asia-Pacific region, Human Potential Development Index, clusters, dendogram, social sectors

1. Introduction

In 60-80 years of the last century, there was a tendency to the emergence of the new economic growth theories (Lucas, Becker, & Schultz) proving that the main factor of the economic growth was a human capital. The level of the society development is determined not only by the dominant types of economies, but also by the established hierarchy of values and interests, and the population characteristics, which is "human capital". The human capital involves the abilities, knowledge, and skills of employees, which give them the opportunity to operate in an economic environment. Investing in human capital tends to lead to higher productivity and increased production efficiency. A practice has shown that an increase in human capital through education, better health care and nutrition, affects economic growth, especially in the countries (regions) with low incomes and limited human capabilities.

A qualitative change in the role of man in the economy associated with the transition to a postindustrial society led to a growing interest in the problems of human capital and the reproduction of the human potential.

The main problem of the formation of sustainable development economics is still the efficiency of investing in human capital, which is now the central determinant of the level of the economic growth and the quality of life.

The economy and the education level of the society are interdependent elements of the social system. Each of these elements influence the development of the other one in a very complicated way. If this relation is viewed from the perspective of the initial pulse, the priority, of course, belongs to the scientific and educational potential of society, because, in the conditions of information society, it acts as the most important factor in the reproduction of the national wealth and as an essential element of it. Considerable expenses for the development of education are not a consequence of the well-being of the country; it is an element of this prosperity.

There are many approaches to the definition of human capital as an economic category, as it is a very complex and multifaceted concept. Therefore, it could be claimed that this is a very ambiguous phenomenon which is also quite capacious and includes a lot of different areas such as social, economic, psychological, and even philosophical, as there is no aspect of human existence, which would, in principle, do not fall under the definition of a human capital. …

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