E-learning and human capital development in organizations

• Author: Luca Refrigeri
• Pages: 241-249

E-LEARNING AND HUMAN CAPITAL DEVELOPMENT IN

ORGANIZATIONS

Ph.D Professor Luca Refrigeri

Abstract: In 2000 the European Union founded knowledge economy setting the goal of

making Europe the most competitive and dynamic knowledge based economy in the world. The

development of a modern knowledge economy reflects a larger transition from an economy based

on land, labour and capital to one in which the main components of production are information and

knowledge. Because of that, the most effective modern economies will be those that produce the

most information and knowledge and make that information and knowledge easily accessible to the

greatest number of individuals and enterprises.

Key-word: human capital development; general training and specialised training; E-

learning; employment.

The potential for individuals, organizations and countries to benefit from this emerging

knowledge economy depends largely on their education, skills, talents and abilities, that is, their

human capital. As a result, governments are increasingly concerned with raising levels of human

capital, chiefly through education and training, which today are seen as ever more critical to

fuelling economic growth.

However, formal education is only one part of forming human capital. In many ways it is

more useful to think of human capital formation as a life long learning process rather than as

education.

From an economic and employment perspective, this human potential for life long learning

is assuming ever greater importance. Meanwhile, fast changing technologies are creating new jobs

unheard of only recently or radically altering what workers need to know to perform their existing

jobs. Consequently, people now need to continue developing their skills and abilities throughout

their working lives.

This policy looks at the concept of human capital, its increasing importance to economic

growth, and how governments and societies can work to develop it during early childhood, the

years of formal education and adulthood.

The idea of human capital can be traced back at least as far as the work of the 18th century

economist Adam Smith, but it was only in the late 1950s and 1960s that it began to emerge as an

important economic concept. At that time, economists such as Theodore Schultz and Gary Becker

began using the “capital”, a economic concept, to explain the role of education and expertise in

generating prosperity and economic growth. (B

ECKER

G., 1962, 1964; S

CHULTZ

T.W.

1960, 1961).

They argued that people invest in their education and training to build up a stock of skills

and abilities, a capital that can bring a long-term return. This investment can also benefit the

companies were they work and the national economies and help fuel economic growth.

Typically, then, human capital is broadly defined as a combination of individuals’ own

innate talents and abilities and the skills and learning they acquire through education and training. It

is worth noting that the business world, which has eagerly embraced the concept of human capital,

tends to define it more narrowly as workforce skills and talents directly relevant to the success of a

company or specific industry.

In the last years human capital is associated with a wide range of both economic and non-

economic benefits; these include improved health, longer life spans and a greater likelihood of

involvement in community life.

Economically, the returns to human capital can be understood in terms of the prosperity of

the individual’s, the organizations and of the national economy. At the individual level, earnings

tend to increase quite sharply as an individual’s level of education rises. In some OECD countries