The Value of Human Capital:

Developing the Workforce of the 21st Century

U.S. science skills proficiency

2009

Source: U.S. National Center for Education Statistics.

• Only 34% of 4th graders are “proficient” in science

• 30% of 8th graders are proficient

• 21% of 12th graders are proficient

Source: OECD.

• South Korea 546

• Canada 527

• Japan 529

• Germany 513

• OECD average 496

• France 496

• United States 487

• Spain 483

How 15-year-olds score in math

Source: OECD.

U.S. ranks 23rd in science worldwide

1. Shanghai 575

2. Finland 554

3. Hong Kong 549

4. Singapore 542

5. Japan 539

6. South Korea 538

7. New Zealand 532

8. Canada 529

9. Estonia 528

10. Australia 527

11. Netherlands 522

13. Germany 520

15. Switzerland 517

16. United Kingdom 514

19. Poland 508

20. Ireland 508

21. Belgium 507

22. Hungary 503

23. United States 502

OECD average 501

International competition

• India produces three times as many scientists and

engineers as the U.S.

• China produces eight times as many

Source: Broken Pencil Productions.

China and India are now preferred destinations for

increasing numbers of multinational high-tech

corporations.

Average years of schooling increased dramatically

for developing countries in the past 60 years

Source: Robert Barro and Jong-Wha Lee (2010).

6.22

2.05

0.761.28

2.571.77

1.02

4.83

11.03

7.09 7.12

5.23

8.26 7.94

5.24

9.65

0

2

4

6

8

10

12

Advanced

countries

Developing

countries

Middle East

and North

Africa

Sub-Saharan

Africa

Latin

America

East Asia

and the

Pacific

South Asia Europe and

Central Asia

1950 2010Average years of schooling

The education gap across regions

9.2

61.2

88.1

77.1

45.9

67.1

76.1

16.1

2.3

17.424.5

32.6

7.7 7.9

33.2

1.30

10

20

30

40

50

60

70

80

90

100

Advanced

countries

Developing

countries

Middle East

and North

Africa

Sub-Saharan

Africa

Latin

America

East Asia

and the

Pacific

South Asia Europe and

Central Asia

1950

2010

Population with no schooling, percent of population aged 15 and over

Source: Robert Barro and Jong-Wha Lee (2010).

Returns on early childhood education

Sources: James Heckman, Investing in Disadvantaged Young Children is Good Economics and Good Public Policy, NAEYC: 2007 Annual Conference & Expo.

“Rate of return to a dollar

investment made while a

person is young is higher than

the rate of return to the same

dollar made at a later age.”

-James Heckman

Nobel laureate in economics

Return on human capital

Source: Robert Barro and Jong-Wha Lee (2010).

12.1% 13.3%

7.8% 6.6% 6.5%

10.3% 11.3%

8.5%

0%

2%

4%

6%

8%

10%

12%

14%

World Advanced countries

Middle East and North

Africa

Sub - Saharan Africa

Latin America

East Asia and the Pacific

South Asia Europe and Central Asia

Rate of return on an additional year of schooling, percent

136

50

23

11

-8

-21

India

Latin America

China

U.S.

Japan

Europe

Working-age population grows rapidly in India

Source: Morgan Stanley.

Addition to working-age population 2010-2020

(in millions)

Number of Indian households (in millions)

% by annual income

Over the next 10 years, India will add over 5

workers for every 1 worker added by China...

…with the world’s largest addition of people to the

workforce, it is estimated that over 100 million

households will join the middle class

6450

2615

31

34

40

32

514

31

46

1 1 3 7

2000 2008 2020 2030

Wealthy

Middle class

Aspiring middle class

Impoverished

India and China have relatively young population

Age 15-24

Source: United Nations.

Millions

2015*2010*2005

250

200

150

100

50

0

India China United

States

United

Kingdom

* estimated

Tertiary education enrollment rate 2008

Source: The World Economic Forum.

98.1

82.977.2

70.6

58 57.4 54.6

34.4

24.5

13.50

20

40

60

80

100

120

Korea United States

Russian Federation

Spain Japan United Kingdom

France Brazil China India

Percent

Quality of math and science education 2010-2011 weighted average, 1=poor; 7=excellent

Source: The World Economic Forum.

6.4

5.45.1 4.9 4.7 4.7 4.5 4.3 4.3

2.7

0

1

2

3

4

5

6

7

Singapore Canada France Japan China India UK Russian Federation

US Brazil

Score

Global average: 3.9

Internet access in schools 2010-2011 weighted average, 1=poor; 7=excellent

Source: The World Economic Forum.

6.66.1 6.1

5.8 5.7

4.9 4.9 4.64 3.8

0

1

2

3

4

5

6

7

Iceland UK Canada US China Japan Germany France India Brazil

Score

Global average: 4.2

Ability to retain and attract talent 2010-2011 weighted average, 1=poor; 7=excellent

Source: The World Economic Forum.

5.7 5.65.4

4.64.4 4.4 4.4 4.3

4

2.9

0

1

2

3

4

5

6

US UK Canada Japan Brazil Germany India China France Russian Federation

Score

Global average: 3.5

Relation of pay to productivity 2010-2011 weighted average, 1=low; 7=high

Source: The World Economic Forum.

4.9 4.8 4.7 4.6 4.4

4.3 4.3 4.1 43.7

0

1

2

3

4

5

6

US Japan China UK Canada Germany India France Russian Federation

Brazil

Score

Global average: 3.9

Companies offering on-the-job training Percent, 2010

Source: The World Bank.

17

27

30

35

42

47

51

0 10 20 30 40 50 60

South Asia

Middle East & North Africa

Sub-Saharan Africa

Eastern Europe & Central Asia

OECD

East Asia & Pacific

Latin America & Caribbean

Global average: 36.29

Percent

“Critical” factors for job satisfaction Percent of mid-senior managers

Sources: International Quality and Productivity Center, McKinsey & Co.

Percent

37

39

39

41

43

45

48

51

59

30 35 40 45 50 55 60 65

Career development opportunities

Good culture and values

Good performance evaluation system

Influence in descision-making process

Good relationship with boss

Passionate about work

Good management

Compatible with personal commitments

Interesting and challenging work

Examples of talent retention strategies

• 0% interest on home loans

• Education funds for

employee’s family

Sources: Business Insider, Time, TechWeb.com.

Siemens

• Enhance engagement

• Align interests

• Comfortable workplace

• Employees spend 20% of time

on own pet projects

• Holiday bonus and company-

wide salary hike

Google Alibaba.com

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