Iran Ranks 104th in GHC Index

Iran ranked 104th among 130 countries and scored 54.97 out of 100 in World Economic Forum’s Global Human Capital Index for 2017.

The WEF Human Capital report measures countries on four key areas of human capital developments, namely capacity determined by past investment in formal education; deployment which is the application and accumulation of skills through work; development which is the formal education of the next-generation workforce; and continued re- and up-skilling of existing workers; and know-how, which is the breadth and depth of specialized skills used at work.

A country’s performance is also measured across five distinct age groups or generations: 0-14 years, 15-24 years, 25-54 years, 55-64 years and 65 years and above.

Among the four key areas of human capital development, Iran ranked highest in the development component at 54th, receiving high marks in the area of secondary enrolment gender gap, secondary education enrolment rate and primary education enrolment rate.

The country, however, failed to perform well on the deployment pillar where it ranked 128th due to low marks in its employment gender gap and labor force participation rate.

“Efforts to fully realize people’s economic potential—in countries at all stages of economic development—are falling short due to ineffective deployment of skills throughout the workforce, development of future skills and adequate promotion of ongoing learning for those already in employment,” WEF said.

“These failures to translate investment in education during the formative years into opportunities for higher-quality work during the working lifetime contribute to income inequality by blocking the two pathways to social inclusion, education and work.”

According to the WEF report, the working age population of Iran is nearly 57.1 million out of 80.3 million. The country’s labor force participation rate is 38.3% and unemployment rate is 11.1%. About 34.4% of the Iranian youth are not in employment, education or training. GDP per capita is $16,010 and output per worker is $54,099.

Norway topped the global index, followed by Finland, Switzerland, the US and Denmark, Germany, New Zealand, Sweden, Slovenia and Austria.

According to the report’s Human Capital Index, 62% of human capital have now been developed globally. Only 25 nations have tapped 70% of their people’s human capital or more. With a majority of countries leveraging between 50% and 70% of their human capital, 14 countries remain below 50%.

Human capital is a measure of the economic value of an employee’s skill set. This measure builds on the basic production input of labor measure where all labor is thought to be equal, according to Investopedia.

The concept of human capital recognizes that not all labor is equal and that the quality of employees can be improved by investing in them. The education, experience and abilities of employees have economic value for employers and for the economy as a whole.