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In Part III of the book the organisational and human dimensions of innovation in the Asia Pacific are examined, beginning with Clarke and Gholamshahi’s analysis of the significance of human capital for the development of knowledge-based economies. In the OECD countries, more than half of GDP is accounted for by knowledge-based industries, including the main producers of high-technology goods, high and medium technology manufacturing, and knowledge intensive services such as finance, insurance, business, communication and social services. This is manifest in the rising human capital levels of the population in OECD countries as measure in educational attainment, and in the increased demand for highly educated and highly skilled workers. The challenge for the Asia Pacific is to develop the human, social and institutional capital necessary for successfully competing in the knowledge economy. The Forum for the Future (2016) suggest a five capitals model of human capital, social capital, finance capital, manufacturing capital and natural capital. Defining human capital as people’s health and well-being, knowledge, skills and motivation, and defining social capital as the institutions which sustain and develop human capital in partnership with others for example families, communities, businesses, unions, schools and voluntary organizations including the values and behaviours that allow these social forms to operate). Human capital is one of these five interdependent forms of capital, and is not a separate, substitutable item in itself (that is human capital works with and complements other forms of capital). Human and social capital become ever more critical as the knowledge economy progresses. Hoff and Stiglitz insist, “Development is no longer seen primarily as a process of capital accumulation but rather as a process of organizational change” (2001: 389). The Asian Development Bank in a report on Moving Towards Knowledge-Based Economies (2007) suggests a new paradigm for economic development “It is even envisaged that knowledge can eventually become a means of mass production—similar to manual labour in the industrial economy—once web-based information and communication technologies (ICTs) have reached worldwide penetration levels, allowing individuals to work and provide routine knowledge in a virtually networked (global) environment” (ADB 2007: ix).
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- Developing Human Capital for Knowledge Based Economies
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