Human Capital and productivity: a call for new interdisciplinary research
This paper calls for an interdisciplinary approach to understanding the contribution of human capital to productivity, building especially on recent theoretical and empirical insights from the fields of employment studies and innovation studies. This focus is motivated by the urgent need to address four economic puzzles that characterise trends and patterns of human capital and productivity, with specific reference to the UK:
- High skill demand lags behind high skill supply;
- Real wages are not keeping up with the higher skill supply;
- The assumed skill bias of new technologies is uneven and possibly even absent; and
- Multiple organisational factors make the skill-technology-productivity equation highly contingent and uncertain.
Evidence from the employment and innovation literatures shifts the frame of analysis away from a transactional approach to the supply and demand of human capital and towards improving knowledge about the use, development and transformation of human capital within organisations and sectors and its contingent relationship with productivity.
The paper concludes with a call for research in five core areas to address the challenges of rapid technological change, macroeconomic uncertainty and pressures to transition to a more sustainable path of development.
This is part of a series of working papers outlining the key issues and questions of The Productivity Institute’s key research themes. This paper covers the Human Capital research theme. Other papers will provide an overview of Organisational capital, Knowledge capital, Geography and place, Institution and governance, Macroeconomic trends & policy, Social, environmental and technological transitions and Measurements & methods.
Authors Damian Grimshaw, Marcela Miozzo