... education, training and medical care could all be considered as investments in human capital. 'They are called human capital because people cannot be separated from knowledge, skills, health or values in the way they can be separated from their financial assets' (Becker, 1990). Firstly, consider some of the theories of economic development that focus on the role of human capital accumulation. Endogenous growth theorists believe that improvements in productivity can be linked to the pace of innovation and extra investment in human capital. The economists therefore stress the need for government and private sector institutions to provide incentive to markets which nature innovation. There is also a central role for knowledge as a determinant of economic growth. Endogenous growth theory predicts positive externalities and spill-over effects from developing a high value-added knowledge economy which is able to develop and maintain a comparative advantage in growth industries in the global economy. Let ...

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