The cost of developing human capital is actually more than the potential benefits it could potentially bring for a developing and a developed country. The pace in which new technologies are being introduced into the workforce demands that the number of individuals available to work with new technologies be in equilibrium with the new jobs that are constantly being introduced with new technologies.
How would it be possible to update factories if the workers do not have the capacity to understand, yet use the machinery in order for a factory to be successful? It is understandable that economists create complex formulas, in my opinion, with socialism in mind as the typical society in which these formulas should work in sustaining both the economies and the people who live within them. The problem, from a social science standpoint, is that not all societies function within the socilist point of view, nor do the people in which these formulas are created to help truly understand and accept the very idea of socialism.
Especially in the United States is the very concept of socialism an oxymoron to the general public. Technology has had a positive and negative affect on Amerian society in the sense information is available as is misinformation. American society, as an example, fears socialism, not knowing that a large part of it’s society is based on social policies. Americans should also realize at the same time that although technology both creates opportunities and takes them away.
Unfortunately, not everyone has the ability to micro learn in order to make, at the very least, a lateral move as their position has been replaced by technology. The theories proposed by The World Bank are the very ideas politicians on the left are proposing, but at the same time those politicians are demonized on the right as socialist. America as a developed country has an unequal system of investing in human capital that is becoming apparent as technology and globalization is exposing the flaws in the system for the American worker. The curious aspect of American society, the World Bank eloquently points out, is the need for a social agreement. As Americans are scared of socialism, the also fear technology not knowing social protections are needed or a better system in which the government invests in human capital.
Older individuals are finding it difficult to transition from a job that has been replaced by technology to another position. The younger generation, being part of the gig economy, has not problem in transitioning, as if they lose a job,it is not as much of a problem as they usually have more than one job compared the formal employee. The difference in older, young, white, black,rich or poor individual is how much social capital has been spent on that individual. The very concept argued by both political parties centers on the philosophies of how much to spend on human capital. The bureaucracy in reality determines if the true cost and value of human capital. To truly measure it would be a difficult task at best as the mones spent is not equal within the country, states, or even within a city. The cost would easily makes sense if taxes are effectively collected from the companies that are benefiting from technologies and those monies were spent equally amongst the entire nation.
Countries, like Finland, are examples America should study to effectively invest in human capital, but capitalism will never allow such ideas to take hold. As recently as a year ago, Donald Trump and Republican party cut taxes; now in order to pay for those cuts they have mentioned cutting social programs (human capital). The problem is that the taxes are not collected and the cost of developing human capital has become an expensive proposition. The one constant is the population is increasing year after year, as does the cost for developing the human capital.
The increase in jobs minus those lost can not possibly add up to possibilities for all in those are able and willing to work. The mere suggestion of creating a social safety net of sorts only suggest that it known that there will there be individuals who are left behind. Unfortunately, not all individuals will find a place in a competitive world in which the gig economy will pit worker against worker. In truth it may be true that the employer will pay top dollar for talent, but if a talent rich pool exist, then the employer will have the ability to hire the lowest bidder, thus how can individual reach the middle to upper class if they are constantly under bidding for work or worse still having to work several jobs?
It may be true that some countries will see a shift in their population, possibly opening up opportunities for others, but is it possible for China and Japan to truly open up their borders to individuals from the Sub Saharan Africa seeking opportunities. Brexit is a perfect example or xenophobia, let alone the example in American. If the borders are not truly open then how can true modernization, it is not possible for any developing country to have the ability to catch up to the already developed countries if the policy protectionism is the governing policies of today’s governments? These same developed countries have for centuries taken advantage of the developing countries and in truth have no real interest in developing these countries other than exporting the cheap labor these countries offer. If the labor is cheap, then how is it that the spending power of these individuals will diffuse badly needed case into an economy that will in turn invest in human capital?
Investing in one’s own society is a must, but how much is lost in investing in human capital that in turn may take their services to other borders seeking better opportunities. The term “brain drain” does create the problem of those with knowledge seeking employment in other countries, thus depleting one’s knowledge pool within one’s country. But if a country has a wealth of knowledge, numerous employment opportunities, and the income that comes with it, then scenarios like this are not a problem, neither will a problem exists in a country’s ability to thrive with the technological advances that inevitably happen over time.
If a country does not have the ability to grow, because they do not have the resources that will be able to understand how to use the new technologies, because developed countries hire these individuals to do menial task when no other opportunities exist, then the cost is too high. The world economies are a zero sum game that only the concept of socialism can solve, but is a system that the world, as an entity, will not accept.
In the perfect world, individuals financially earn more, in turn, more money is pumped into the economy, and once again in turn companies can grow. Taxes dollars create revenue and those dollars can be spent on infrastructure, education, etc. A healthy citizen or HCI has a direct affect on a particular country, but in truth the developed countries are playing a zero sum game in which the cost would be worth it if the human capital, better known as people, were the true consideration in such thinking, but technology, increased productivity, and profits make the very idea of investing in human capital imperative for developing and developed countries are one can’t not afford it and the cost cuts into the profits of the companies in others in the form of taxes.