A third of human capital in Asia Pacific is underutilised

Singapore and Japan have been ranked highly for human capital development, in the World Economic Forum’s 2017 index, but there is room for improvement in other southeast Asian countries.

Singapore placed at number 11 in the table and Japan at 17, while the likes of Laos, Myanmar and Cambodia were found much further down the list at 84, 89 and 92, respectively.

For the east Asia and Pacific region as a whole, 34 per cent of all human capital is being underutilised, while in south Asia the figure is 46 per cent. This compares to a global average of 38 per cent, as calculated in the Global Human Capital Index and published in The Global Human Capital Report 2017 – Preparing people for the future of work.

The index measures how well countries are developing their human talent on a scale of zero to 100, across five age groups and four different dimensions: capacity, deployment, development and know-how.

There are 21 unique indicators, covering aspects such as educational attainment rate at primary and secondary school, employment gender pap, labour force participation rate, quality of primary schools and availability of skilled workers.

Singapore achieved an overall score of 73.28, ranking highly in all areas and coming 4th in the know-how subindex (72.52) and 25th in terms of development (73.62). Japan achieved an overall score of 72.05, Malaysia scored 68.29 (33rd position), with Thailand on 66.15 (40th) and the Philippines 64.36 (50th place).

The gap between the best and worst performers, across east Asia and the Pacific and south Asia combined, was among the largest of any region, said the report, “reflecting in part the different stages of economic development of the 16 countries covered in the index, as well as the varying degrees of human capital development that exist between countries with similar income”.

“Over half of the countries in the region have achieved near-universal primary school enrolment rates. Yet on average, over 20 per cent of the region’s 0–14 age group is not enrolled in secondary education. Nevertheless, scores for the region’s capacity subindex are generally much higher among the region’s younger age groups, reflecting the region’s remarkable progress between generations,” said the report.

“The ingenuity and creativity at our collective disposal provides us with the means not only to address the great challenges of our time, but also, critically, to build a future that is more inclusive and human-centric,” said Klaus Schwab, founder and executive chairman at the WEF.

Core to the index is the idea that investment is needed to develop talent, through education and employment.

The highest-ranking countries tend to be those that have a long-standing commitment to good educational attainment. Norway tops the list, ahead of Finland, Switzerland and the US.