Human Capital and Innovation—Basic Concepts, Measures, and Interdependencies

With the acceleration of globalization processes, human capital stock and quality as well as invention and innovations have become particularly important. The greater mobility of capital on an international scale has led to a situation in which its allocation in a given country is increasingly determined by the quality of labor, in addition to such aspects as the price of labor, the tax system, and the quality of physical infrastructure and institutions. There are a few reasons for this. Production departments based on low-qualified labor force have been moved to areas where the labor costs are the lowest. The competition between the OECD (Organisation for Economic Co-operation and Development) countries and the dynamically developing countries, such as Chile, India, or Brazil, starts to concern the location of the technologically advanced production as well as allocation of research and development (R&D) works and R&D centers. The important elements of that competition are people, their knowledge, creativity, and the ability to convert these resources into innovation. For that reason, as the analysis of various theoretical approaches set out in the preceding section indicates, human capital and innovation are becoming increasingly critical for shaping the competitive advantage of countries and boosting benefits achieved in international exchange. The model approach to that kind of correlation as well as the empirical verification of its direction and strength requires supplementation of previous theoretical deliberations regarding the nature of international competitiveness with selected theoretical strands relating to human capital and innovation. This section is thus an attempt to integrate terms such as human capital and innovation based on the concept of innovation systems, as well as to present and select measures adequate for analyzing these complex and overlapping phenomena.