Human Capital and Impact on Sustained Economic Growth in Romania

Abstract

The present paper had as starting point the idea according to which human capital, investment in human capital, and respectively in education, can be considered key determinants of economic growth and development. Our paper draws attention to the conditions necessary so that the effects of education on human capital development and economic development should record maximum values. The paper emphasizes the idea that investments in education become ineffective unless accompanied by a suitable and appropriate strategy for economic and social development, based on socio-economic and political stability, and by the existence of a direct relationship between income, occupation and level of education and professional training. Our analysis also implies the concepts of social capital and psychological capital as both are considered as influencing the development theory, practice and policy. Although they bring about less clear and direct results, these two forms of capital improve the economic activity’s background in a way similar to technical infrastructure; social capital influences the quality of education and health, facilitates access of individuals to markets, supports complex operations and enables the long-term planning of activities. The paper draws attention to the multidimensional character of the economic development, and on competitiveness, considering that economic development can therefore express all quantitative, qualitative and structural transformations occurring within economic processes and along scientific research and manufacturing technologies, regarding the mechanisms operational in the economy, namely thinking patterns and behavior of individuals. On the other hand, the New Economy is described as synonymous to the knowledge economy in the broader context of the knowledge society, considering the knowledge based economy where knowledge represents an important factor in determining economic growth.