Introduction

In present business world employees are considered as human assets, human

resources and more recently human capital. Human capital refers to the knowledge,
education, training, skills, aptitude and expertise of a firm s workers. Thus, firms believe
that human resources are their most valuable assets. Employees are considered not only
as a vital resource for a business but also a key role player of success factors of
competitive advantage and long term sustainability of business in todays changing
business environment (Md Habib-Uz-Zaman Khan et al., 2010).
Different studies argued that skilled employees, employees knowledge and spirit,
leadership quality, etc. facilitate the improvement of company performance (Stewart,
1994; Bozzolanet et al., 2003; Bontis, 2003). Similarly, Bontis et al. (2001) considered
that Human Capital representing the collective knowledge stock of an organization that
provides a sound base for enjoying competitive advantages over others.
Human capital plays a critical role in economic growth and poverty reduction. From a
macroeconomic perspective, the accumulation of human capital improves labor
productivity; facilitates technological innovations; increases return to capital; and
makes growth more sustainable, which, in turn, supports poverty reduction. Thus,
human capital is regarded at the macro level as a key factor of production in the
economy wide production function. From a microeconomic perspective, education
increases the probability of being employed in the labor market and improves earnings
capacity. Thus, at the micro level, human capital is considered the component of
education that contributes to an individuals labor productivity and earnings while being
an important component of firm production. In other words, human capital refers to the
ability and efficiency of people to transform raw materials and capital into goods and
services, and the consensus is that these skills can be learned through the educational
system. That said, human capital development is important for development for its
intrinsic value as a development goal in its own right, not only because of its
instrumental value.
The Gross Domestic Product (GDP) in Bangladesh expanded 7.05 percent in 2016 from
the previous year. Human capital has direct involvement in increasing GDP. A major
number of nearly half of Bangladeshis are employed in the agriculture sector, with
RMG, textiles, leather, jute, fish, vegetables, leather and leather goods, ceramics, fruits
as other important produce. Remittances from Bangladeshi who are working overseas,
mainly in the Middle East are the major sources of foreign exchange earnings; exports
of garments and textiles are the other main sources of foreign exchange earnings. Ship
building and cane cultivation have become a major force of growth.
Although the conceptual definition of human capital is clear, its measurement is difficult
because it is practically impossible to observe individual skill, and even harder to design

a metric that is comparable across individuals and countries. Thus, various proxy
measures of human capital have been proposed in the empirical literature, such as
literacy rates, school enrollment rates, years of schooling, and test scores. While the
literacy rate, which measures the proportion of the population who can read and write,
is an important measure of well-being, it does not measure the educational attainment
or skill level of the workforce. On the other hand, school enrollment rate is a relevant
metric only for school-age children and has little relevance for the workforce. Although
years of schooling can reasonably capture the human capital stock of the workforce,
this only reflects the quantity of human capital; it does not give an indication of the skill
level of the workforce. This brings us to test scores which reflects the quality of
education and is closely related to individual skill. However, a problem with test scores
is that it is very difficult to get a measurement that can be reliably extrapolated for the
entire workforce.
Currently Human Capital is measured based on OECD Measures. Hansson (2008)
showed that OECD measurement on human capital is closely linked to international
comparable statistics considering investment in human capital, quality adjustments, and
result of education. On the constitution of human capital measurement, the constitution
is divided into sub-factors in detail. The first sub-factor is investment in human capital
focused on the current level of human capital investment within a national boundary,
and the second focuses on how the quality of that investment is managed and adjusted
through the international comparison of academic achievement. Finally, third sub-factor
presents how the result of educational investment is preformed after postsecondary
education.
Factors:
1. Investment in human capital
1-1. High-level qualification
1-1-1. Growth in university-level qualifications
Growth in attainment levels in different fields
1-2. Graduation and enrollment rates
1-2-1. Trend in university-level graduation output
1-2-2. Contribution of international students to university graduate output
1-2-3. Entry rates into tertiary-type A education
1-2-4. Entry rates at tertiary education compared to population leaving without
completing tertiary education
1-3. Time invested in education

1-3-1. Instruction time per year

1-3-2. Number of hours per week spent on self-study or homework
1-4. Investment in education
1-4-1. Expenditure per student at different level of education
1-4-2. Percentage of GDP spent on educational institutions
1-4-3. Private and public expenditure
1-4-4. Public subsidies for education to households
1-4-5. Expenditure on core service, ancillary services, and R&D
1-4-6. Change in student numbers, expenditure, demographic forecasts, etc.
2. Quality adjustment in human capital investments
2-1. PISA assessments
2-2. PUIAAC (Program for the international assessment of adult competencies)
3. Results of education
3-1. Matching of education to occupation
3-2. Labor market outcomes by age, gender, and educational attainment
3-3. Rates of return to education

Bangladesh is utilizing 57.84 per cent of its human capital in 2016 (World Economic
Forum Report, 2016). Bangladesh shows poor ability to attract and retain talent
although the country is ranked 104th among 130 countries globally. In the WEFs 2015
index the countrys ranking was 99th. The human capital index measures countries'
ability to nurture, develop and deploy talent, human capital, education, skills and
employment for economic growth. However, ranking is declined still Bangladesh is
ahead of other countries of the region whereas India has ranked 105th, Nepal 108th and
Pakistan 118th.

References
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http://reports.weforum.org/human-capital-report-2016/economies/#economy=BGD