63 Examples of Human Capital

John Spacey, August 29, 2021

Human capital is the future productive potential of people. This is difficult to directly estimate and is often measured with proxies such as education and health metrics for a nation. Unlike regular capital such as a building or machine, humans are extremely dynamic and can create or destroy unusual levels of value. The following are factors that contribute to human capital.

Abilities	Administrative Capabilities
Agents of Change	Aptitude
Artistic Talent	Attention to Detail
Capacity for Calculated Risk Taking	Capacity for Problem Solving
Charisma	Communication Skills
Convergent Thinking	Craftspeople
Creative Capacity	Creative Visionaries
Credibility	Cultural Capital
Cultural Competence	Culture Visionaries
Design Thinking	Divergent Thinking
Domain Expertise	Education
Emotional Intelligence	Engineering Prowess
Entrepreneurial Spirit	Fluid Intelligence
General Intelligence	Hard Skills
Health	Honesty & Integrity
Industry Experience	Industry Visionaries
Interpersonal Skills	Inventive Thinking
Know-how	Leadership
Lifestyle Visionaries	Literary Talent
Management Competencies	Mastery
Objectivity	Personal Presence
Personal Resilience	Physical Abilities
Political Leadership	Professionalism
Rational Thinking	Relational Capital
Reliability	Research Abilities
Scientific Knowledge	Scientific Leadership
Self-Direction	Situational Knowledge
Soft Skills	Storytellers
Strategic Thinking	Systems Thinking
Technical Leadership	Technical Skills
Traditional Knowledge	Training
Work Ethic

Relational capital is the value of relationships. These are often cultivated and maintained by your employees such that they are likely to leave with the employee. As such, relationships can be considered a type of human capital.

Human capital is a potent way to explain the difference in productivity rates between one country or one firm to the next. Productivity is the amount of value a person creates in an hour, month or year and is the basis for a high standard of living. Workers with talents and knowledge have more productive potential such that governments can invest in things like education, health and quality of life to improve their long term economic production.

Human capital is a useful concept but it is an unfortunate term as people don't like to be compared to other capital such as machines. This can be accused of capitalist realism whereby all things human are coldly reduced to financial metrics. The potential of a human is a wondrous thing that is beyond measurement.

Communist systems waste human capital at great scale by allowing the state to direct all capital. For example, a talented entrepreneur can't emerge in an environment where the state and its associated companies control all economic resources.

It is ridiculous to think that firms can measure human capital in terms of investments in training. The talent of your employees will not change much with a training session. It is the firms with that capacity to recruit unusually talented individuals that have a human capital advantage, not those that conduct the most training sessions.

Working conditions and quality of life improve human capital. For example, employees who are struggling with a lack of healthcare aren't likely to be productive.

Public services such as schools, universities, hospitals and transportation are a primary way for nations to increase human capital. If people can get a low cost, high quality education -- this is fundamentally going to increase human capital.

63 Examples of Human Capital

Human Capital

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