A 549-page report produced by the World Economic Forum has identified the countries that it deems ‘most successful’ at maximizing the long-term potential of their labor forces. Overall, Switzerland is ranked number one, followed by Finland, and then Singapore.
“The key for the future of any country and any institution lies in the skills and talent of its people,” Klaus Schwab, founder and executive chairman of the World Economic Forum, stated in a press release. “In the future, human capital will be the most important kind of capital. Investing in people is... imperative for growth, prosperity and progress.”
Teams of researchers at the World Economic Forum, Mercer Consulting (a subsidiary of Marsh & McLennan Companies), and Harvard University collaborated to construct the index referred to in the report in order to measure human capital around the globe.
What is the Human Capital Index?
“The Human Capital Index is a tool for understanding where countries stand today so that government and business can engage in workforce planning for the future,” Saadia Zahidi, senior director and head of the Human Capital project, stated in a press release.
As described in the report, the Human Capital Index measures countries on their ability to ‘develop and deploy’ healthy, educated, and able workers. Judgments are based on four pillars: Education, Health and Wellness, Workforce and Employment, and Enabling Environment. Countries are scored overall as well as ranked within each of the pillars. There are 51 indicators in total with assessments distributed as follows: 12 Education indicators, 14 Health and Wellness indicators, 16 Workforce and Employment indicators, and nine Enabling Environment indicators.
The Education pillar, the report notes, measures quantitative (number of people with college degrees and higher) and qualitative aspects of education (how good are the schools?) and applies them to both the present and future workforce. Health and Wellness covers the physical and mental well-being, from childhood through adulthood, of each nation’s population. Workforce and Employment seeks to quantify the experience, talent, knowledge, and training of each country’s working-age population. Finally, the Enabling Environment pillar attempts to capture the legal framework, infrastructure, and other factors required for individuals and nations to succeed.
Having established an index, the next step involved ranking the globe's nations. Where did the authors get the information on which they based their assessments? They obtained about half from publicly available data gathered by the World Health Organization, UNESCO, the United Nations Development Programme, and the International Labor Organization; the remaining half was derived from the World Economic Forum’s own annual Executive Opinion Survey and other survey sources.
The report ranks the countries separately for each of the four pillars and also ranks them overall. The top 20 overall list contains few, small surprises. Along with Switzerland and Finland, six of the remaining seven countries scoring in the top 10 are in northern Europe, with Canada (10) coming in last. The U.S. shows up in position 16, just after Japan (15) but ahead of Luxembourg (17). New Zealand (12) beats out Australia (19), and Iceland (14) has it over Ireland (20). Qatar (18) somehow slips into the top 20 and so outperforms its peers in the Middle East.
Because of its excellent rating for education, Canada places ahead of the U.S., which, according to the authors, possesses a dynamic workforce, with a strong capacity to attract talent. The U.S. is also judged as having innovation potential and high levels of university-level education. What pulls down its score are factors that include relatively high levels of non-communicable diseases and comparatively low levels of mental well-being. In plain English, these two factors are obesity and stress.
“Some countries face an aged or ageing population, others face youth bulges, a few even face both,” Zahidi stated in a press release. “For some, this means confronting a major upcoming talent crunch, while for others it means developing mechanisms that allow it to realize their population’s potential rather than letting it develop into a burden.”
The language in the press release used to explain the overall rankings is nothing, if not telling; for instance, “China (43) is the highest of the BRICS economies, followed by Russia (51), Brazil (57), India (78) and South Africa (86).” One can’t help but suspect that all the fancy talk about ‘pillars’ and indicators is just so much hokum intended to disguise a more or less straightforward financial ranking of the globe’s many nations.
What is the World Economic Forum?
As Forbes sees it, the World Economic Forum’s annual meetup in Davos, Switzerland, which brings together the world’s ‘most power people,’ is catnip to conspiracy theorists. Meanwhile, the World Economic Forum modestly describes itself as a not-for-profit foundation. In Jan. 1971, a group of European business leaders, supported by various European industrial associations, gathered for the first time in Davos, Switzerland. Klaus Schwab, a professor of Business Policy at the University of Geneva at the time, chaired the forum. Some 16 years later, this ‘European Management Forum’ would change its name to the ‘World Economic Forum.’ The self-described independent international organization is ‘committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas.’
Forbes describes the founder of the World Economic Forum, Klaus Schwab, as the single most influential ‘connector’ in the world and places him on its own World’s Most Powerful People list... though, sadly, he only comes in as number 66 out of 100.