Background to the Study
The definition of human capital varies in context, but the majority put stress on the economic returns in the form of higher earnings and economic growth. Friedman defined growth as an expansion of the system in one or more dimensions without a change in its structure and development as an innovative process leading to the structural transformation of social systems. Human capital on the other hand as studied by Frank & Bemake (2007), is an amalgam of factors such as education, experience, training, intelligence, energy, work, habits, trustworthiness, and initiative that affect the value of a worker’s marginal product. Education and well-being are basic objectives of human capital development; they are in themselves, important ends, in that health is central to well -being, and education is essential for a satisfying and rewarding life; both are fundamental to the broader notion of expanded human capabilities that lie at the heart of the meaning of development (Todaro and Smith, 2011).
According to Oboh (2010), no country has achieved sustainable economic development without substantial investment in human capital. The role and importance of human capital in propelling the pace of economic growth cannot therefore, be over emphasized. The Organization for Economic Co-operation and Development (OECD) proposed a broad definition of human capital as the knowledge, skills, competence and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being (OECD, 2001). It refers to those skills, knowledge, and experience possessed by an individual or population, which can be viewed in terms of their value or cost to an organization or a country.
Mahroum (2007) suggested that at the macro-level, human capital management is about three key capacities, the capacity to develop talent, the capacity to deploy talent, and the capacity to draw talent from elsewhere. Collectively, these three capacities form the backbone of any country’s human capital competitiveness.
Recent U.S. research shows that geographic regions that invest in the human capital and economic advancement of immigrants who are already living in their jurisdictions help boost their short- and long-term economic growth (Singer, 2012).There is also strong evidence that organizations that possess and cultivate their human capital outperform other organizations lacking human capital (Crook et.al, 2011).
Economic growth is in itself, the increase in the amount of goods and services produced by an economy over a period of time. It is conventionally measured as the percentage rate of increase in real gross domestic product, or real GDP. Economic growth can be measured as a percentage change in the Gross Domestic Product (GDP) or Gross National Product (GNP). In Nigeria being a developing country, the role of government is crucial in both scope and significance for increased and substantial economic growth. Economic growth is fundamental for sustainable development. It is usually difficult for a country (especially a developing country), to improve the quality of life of its growing population without economic growth.