The European Human Capital Index: Why I Should Move to Sweden and avoid Italy

The Lisbon Council

The Lisbon Council

In an earlier post I referred to the European Human Capital Index, a metric for the development of human capital by the Lisbon Council. I decided to go the source and read the original policy brief titled Innovation at Work: The European Human Capital Index (PDF) written by Peer Ederer.

The index looks at the ability of thirteen European Union countries to develop and deploy their human capital. Human capital is defined as:

[..] the cost of formal and informal education expressed in euros and multiplied by the number of people living in each country.
[..]
Specifically the index identifies and defines four types of human capital and analyses the way they collectively contribute to the wealth of European citizens:

  1. Human Capital Endowment. This figure measures the cost of all types of education and training in a particular country per person active in the labour force [..]. Specifically, we look at five different types of learning for each active person: learning on the job, adult education, university, primary and secondary schooling and parental education. The figure is subsequently depreciated to account for obsolescence in the existing knowledge base and some level of forgetting.
  2. Human Capital Utilisation. This figure looks at how much of a country’s human capital stock is actually deployed. It differs from traditional employment ratios in that measures human capital as a proportion of the overall population.
  3. Human Capital Productivity. This figure measures the productivity of human capital. It is derived by dividing gross domestic product by all of the human capital employed in that country. This diverges from traditional productivity measures, in that the figure takes account of how well educated employed labour is, instead of just how many hours are being worked.
  4. Demography and Employment. This figure looks at existing economic, demographic and migratory trends to estimate the number of people who will be employed (or not employed) in the year 2030 in each country.

When the thirteen European countries are ranked on each of the four dimensions and then the rankings are summed the following table results (four is the best possible score, 52 the worst):

Rank Country Overall score
1 Sweden 8
2 Denmark 14
3 United Kingdom 19
4 Netherlands 21
5 Austria 23
6 Finland 29
7 Ireland 30
8 France 30
9 Belgium 31
10 Germany 36
11 Portugal 37
12 Spain 38
13 Italy 48

This policy brief is a treasure trove of fascinating and insightful statistical information. The author analyses the data and even gives some policy advice.

Did you know that Sweden invests 2.5 times as much in education as Portugal? The difference is biggest in parental education.
Did you know that the Netherlands leads in human capital utilisation? 64% of the total human capital stock is utilised. This is due to our policy schemes like the Life Course Saving Scheme (“Levensloopregeling”) and the abolishing of early retirement schemes in 2004.
Did you know that the rapid expansion of the utilisation of human capital has depressed the growth of human capital productivity? Only Sweden and Finland have managed to keep human capital productivity stable. The human capital productivity of the Netherlands is falling rapidly.
Did you know that (if current employment and immigration patterns continue) Germany and Italy will lose 8.7 million employees by 2030, together accounting for 70% percent of the total European drop? In Italy 60 year olds will outnumber 20 year olds by two to one in 2030.

Based on the Human Capital Index methodology a couple of policy recommendations are made. Some of these are obvious (increase the quality and the quantity of spending on education, Europe spend less on education than its OECD peers), others might be controversial (being open to immigration of skilled labour: “By 2030, can Germans or Italians learn to live in a society where every other 20-year old is a foreigner?”).

This article is well worth the read.

Online Educa Berlin 2008: Day 2

During the second day of the Online Educa I was able to go to the Going Global with E-Learning keynote in the morning and to the Battle of the Bloggers session in the afternoon. Here are some of my notes and thoughts:

The keynote started with a presentation by Christophe Binot, E-Learning Manager at Total in France. What he showed was quite shocking to me. All the things he described were classic webbased training materials. It felt like I was back in the 20th century. There was no talk of collaborating, of networks, not even of performance support. Instead he focused on the more than 1000 lessons in four languages.

Next up was Richard Straub. He is currently the Secretary General of the European Learning Industry Group (ELIG) and used to by an employee of IBM, but has gradually stepped out. ELIG has the mission to promote innovation in learning in Europe. They are trying to anticipate the 21st century.

The theme of his talk was the unstoppable move towards openness and how this will enable an education continuum.

We are making a move from a closed world to a more open world:

Closed Open
Top down Bottom up
Central planning Participation
Command and control Autonomy
Bureaucratic Commons sense
Rigid Flexible
IPR Intellectual capital
Proprietary Community based
Authority Reputatio

We are moving from a society of relatively static organisations towards what Straub calls the “Hollywood studio approach” of dynamic teams built around a project. The knowledge workers of the second half of the 20st century will be replaced by knowledge entrepreneurs who will work on the basis of flexible contractual relationships.

Focusing on education this might mean that the traditional silos (elementary school, secondary education, tertiary education, employment) will be bridged to create an education continuum of lifelong learning.

Straub then presented some new research from the Lisbon Council focusing on the European Human Capital Index. He had a fascinating graph showing the human capital biography of a German professional:

x-axis = age, y-axis = human captial

x-axis = age, y-axis = human captial

This is definitely material which I will look into further.

He finished his talk by mentioning that the new notion of blended learning is mixing formal and informal learning (not mixing classroom and online learning), and by recommending Opening Up Education: The Collective Advancement of Education through Open Technology, Open Content, and Open Knowledge.

The last speaker of the keynote session was Laura Overton of the independent, not for profit, community interest company Towards Maturity. Her organisation does research in multinational companies with the goal of improving the impact of learning technologies at work.

According to their research the key factors hindering the implementation of innovative learning technologies are the lack of knowledge about its potential, the high reluctance to adopt and the lack of implementation skills. Interestingly 23% of the global companies also considered the overhyping of learning products by their suppliers to be a significant hindrance to implementation.

Mature companies are moving from aligning to needs to delivering impact. Towards maturity has an interesting model of factors in this process:

Toward Maturity

Towards Maturity

  • Alignment to (business) needs is the most important factor for success.
  • Learner context. Engage learners and listen to them, involve them in the design and  the implementation.
  • Work context. Connect to regional priorities, don’t fight technical infrastructures, work with local cultures to your advantage.
  • Building capacity. Collaboratively author content, ensure that local training divisions are equipped using the latest tools, support and connect.
  • Ensuring engagement. Equip local heroes, organise pilots, develop communication toolkits, create peer to peer communication strategies.
  • Demonstrating value. Don’t be afraid to ask for value, dig deeper and communicate successes via a wide selection of media.

These strands collectively intertwine. All contribute to impact and involve stakeholders at all stages. Overton sees it like a “six-legged” race where each of these strands has to coordinate with the others to progress.

The Battle of the Bloggers session in the late afternoon was meant to be a reflective and interactive session on what had been the most relevant topics of the conference. A back channel was provided using Backnoise.

Unfortunately I only learnt two things from this session:

  • Belgium has another unknown comic: session chair Bert De Coutere lead it with a great sense of humour.
  • A backchannel does not add a lot of value yet. People (me included) do two things in it: they discuss the backchannel itself (“we should have this in every session”) or they make witty remarks.

The blogger panelists did not seem to be too comfortable behind their tables on the stage in front of a very large and largely empty room. We had a heckler that could only talk about how all generations have turned into sheep and a vocal audience member with the age of somebody from generation Y, but the mind of baby boomer. All in all Michael Wesch could have gotten some great cultural anthropological material for research on weird group interactions.