Human Capital, Not Tech, Biggest Value Creator: Report

New Delhi: Human capital brings tremendous financial value to organisations as well as the global economy as for every $1 invested in workforce, as much as $11.39 is added to the GDP, says an analysis. 

According to a Korn Ferry Economic Analysis, human capital represents to the global economy a potential value of $1.2 quadrillion.

The analysis, conducted for Korn Ferry by the Centre for Economics and Business Research, noted that human capital is nearly 2.5 times more valuable to global economy than physical assets such as technology, real estate and inventory.

"Although organisations often put technology in the spotlight in the future of work, it is human capital that holds the greatest value for organizations now and in the future," said Jean-Marc Laouchez, global managing director, Solutions, Korn Ferry Hay Group.

Moreover, human capital is also the greatest value creator available to organisations. For every $1 invested in human capital, $11.39 is added to the GDP, the analysis noted.

"When an innovation strikes gold, the connection between the value that is created and the team behind the technology is often lost. Leaders must recognize and capture the value of all their resources to succeed," Mr Laouchez said.

The report noted that even in nations weighted towards agriculture and industry, the value of human capital exceeds physical assets. In China, with human capital assets valued at $110 trillion and physical assets valued at $49 trillion, the human capital to physical asset ratio is 2.23. 

In India, the value of human capital is $80 trillion and the physical capital is valued at $48 trillion, making the human capital ratio 1.67.

"The economic reality of human capital value magnifies the importance of attracting and retaining the right people now and in the future. Technology alone cannot deliver the uplift in productivity and value every organisation needs," said Jeanne MacDonald, global operating executive and president talent acquisition solutions at Korn Ferry Futurestep.