Human Capital in Industry 4.0. Present and Future

The purpose of the article is to explore digital technologies that impose new requirements on the system of human capital formation, especially education. The authors have updated the concept of «human capital». They propose a scheme of its development as a successive transition from natural talents and gifts to higher values and meanings, accumulated individually throughout life. It is argued that digitalization has an increasing influence on this process: after the digitization of external physical objects and communications of the “man-technique” type, it is rapidly subordinating all communications of the “man-human” type and claims to digitize the functions of man himself. In this situation, man (if he wants to preserve his subjectivity) is required to develop personally ahead of the rapid evolution of the technosphere. As a result, man will find himself in a situation where he can only deal with values and meanings, while physical production will be carried out by the autonomous technosphere.The Government needs to promote the development of human capital with fundamentally new professional competencies codified by law. Training, in addition to professional sectoral knowledge, should be directed towards the development of digital competences and future metanautics. Access to digital information is governed by dynamic legal aspects of law.

Public Debt in South Africa

After four decades of racial segregation, South Africa transitioned to a non-racial democracy in 1994. Inevitably for a country with segregationist labour market policies for so long, South Africa is also one of the most unequal countries in the world. In order to take an overview of government debt in South Africa, this chapter looks at macroeconomic performance but also at how the political regime characteristics and inequality have interplayed with government debt during the 1970–2016 period. The data suggest that economic growth correlates negatively with debt and that democracy correlates positively with debt. In addition, the data do not suggest that democratic maturity is already associated with lower debt nor that the outgoing apartheid-era National Party bequeathed the young democracy with high debt. Encouragingly, the data do suggest that inequality and public expenditure on education correlate positively with debt, which suggests that the democratic government has the median voter in mind when creating debt and also that part of the debt is being invested in human capital formation.

Testing cointegration between workers' remittances and human capital formation in Sri Lanka

PurposeThis study investigates the long-run relationship between workers' remittances and human capital formation in Sri Lanka by using the macro-level time series data during the period of 1975–2020.Design/methodology/approachIn this study, the augmented Dickey–Fuller (ADF) and Philips–Perron (PP) unit root tests, the autoregressive distributed lag (ARDL) bounds cointegration technique, the Granger causality test, the forecast error variance decomposition technique and impulse response function analysis were employed as the analytical techniques.FindingsIn accordance with the results of unit root tests, the variables used in this study are mixed order. Results of cointegration confirm that workers' remittances in Sri Lanka have both long-run and short-run beneficial relationship with human capital formation. The Granger causality test results indicate that there is a two-way causal relationship between workers' remittances and human capital formation. The results of forecast error variance decomposition expose that innovation of workers' remittances contributes to the forecast error variance in human capital in bell shape. Further, the empirical evidence of impulse response function analysis reveals that a positive standard deviation shock to workers' remittances has an immediate significant positive impact on human capital formation in Sri Lanka for a period of up to ten years.Practical implicationsThis research provides insights into the workers' remittances in human capital formation in Sri Lanka. The findings of this study provides evidence that workers' remittances help to produce human capital formation.Originality/valueBy using the ARDL Bounds cointegration and other techniques in Sri Lanka, this study fills an important gap in academic literature.

On the Two Catching-Up Mechanisms in Asian Development

Existing studies identify two major underlying mechanisms behind East and Southeast Asia’s miraculous economic performance in the past 5 decades: accumulation and technological catching-up. This study investigates empirically the relative importance of these two mechanisms in Asian development based on a unified framework. Using canonical cross-economy panel data, the study arrives at three important findings. First, while the process of catching-up through capital accumulation played an important role worldwide, this mechanism was more salient in Asia than in other economies around the globe, especially during the region’s early phase of growth and development. Second, human capital formation had a significant positive effect on the technological catching-up process worldwide. In particular, human capital formation promoted technology adoption more strongly in Asia than in the rest of the world. Third, innovation has also been critical in facilitating recent growth in Asian economies. These results suggest that Asia’s capital-accumulation-driven growth in the early phase induced human capital formation and international technological transfers at later phases, with strong complementarities between these two types of capital. Asian economies likely went through three phases of catching-up, that is, capital accumulation, technological imitation, and then innovation. The experiences of these Asian economies in the last several decades provide critical lessons for latecomer growth and development.