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The nation’s most important asset

The nation’s most important asset

Slovenian officials often claim that the nation's best comparative advantage lies in people. The latest World Bank's report on human capital, published in October, backs this claim with some solid data. Slovenia has the achieved 13th highest value of human capital index. The index combines data on survival, education and health in a way »that reflects their contribution to worker productivity«.

The highest value of the index is reached by Singapore (0.88), followed by South Korea and Japan. Finland, in fifth place, is the highest-ranking European nation. Slovenia has practically the same score as Austria on 11th and Germany on 12th place (0.79) and lies just ahead of the Czech Republic and United Kingdom.

Slovenia ranks 13th and 14th in sub rankings regarding the quantity and quality of the education. In childrens survival rate, however, the Alpine republic, together with Iceland, tops the world. The probability of survival of children under the age of five in Iceland and Slovenia is 0.9979: the highest among the 154 countries included in the report.

How important is this for business? According to the authors of the study it is extremely important and can strongly affect a nation’s prospects. Human capital is perceived as the central driver of sustainable growth. “Markets are increasingly demanding workers with higher levels of human capital, especially advanced cognitive and socio-behavioral skills.” The index measures “the human capital of the next generation” and emphasizes that “many nations are poorly prepared for what lies ahead”.

In another assessment of human capital, the United Nations Human Development Index Report (HDI), Slovenia has been holding a stable 25th place for some years now. The inequality adjusted version of the UN’s index ranks Slovenia very close to the World’s Bank human capital index, namely on 14th place. A Gender Inequality Index, one of the HDI components, puts Slovenia even higher, on 7th place. Another additional view on human capital is provided by OECD’s Programme for International Student Assessment (PISA) – “world’s premier yardstick for evaluating the quality, equity and efficiency of school systems”. Slovenian students rank 13th globally in average performance in science – only two European countries, Estonia and Finland, outrank Slovenia in this aspect.

Obviously, there’s still much room for improvement in many of the aspects covered by these reports. To give just one example: Slovenia slightly lags in adult survival rate (rank 31) – still a good result on a global scale, yet many of Slovenia’s peers score better. Small nations often outrank bigger countries in education, health and other well-being related issues, reflected by various human capital or development indices.  Thus, that Slovenia scores well in comparisons focusing on human capital should come as no surprise.

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