Human Capital and Developing Economies: Benefits and Solutions for Policy-Makers

Globalization and IT technology have enabled both companies and individuals in developing countries a quick and thorough access to the latest technological breakthroughs that allow them to make the first and, arguably, most difficult steps in economic development. The purpose of this paper is to a) explain the conditions that are making this possible, b) highlight the benefits of a faster and deeper sharing of knowledge in developing economies and c) to propose several solutions to policy makers to fully grasp and make use of emerging synergies. In this paper we examine 3 cases: a) off-grid LED lighting and electricity, b) mobile telephone usage and c) internet access. We have found out that these, along with several other innovations, greatly enhance the human capital of developing societies, with 3 types of benefits: a) immediate benefits – by raising the quality of life, b) mid-term benefits – by providing a better access to education and therefore career opportunities and personal development, and c) long term benefits – by creating a wealthier and more knowledgeable society. This simple sharing of knowledge, thus, allows for more economic participation and development, which, in turn, strengthens the benefits further enhancing the development of human capital. The paper then proposes several solutions to local policy-makers, which will allow them to create and/or maintain the conditions for the local economies to grow; making therefore best use of the virtuous circle that develops between the sharing of knowledge, human capital, and economic development.