Malaysia improves ranking

HUMAN CAPITAL INDEX 2016: Country placed 42nd position among 130 nations

MALAYSIA’S human capital has shown the strongest performance in the 15 to 24 age group, according to the Human Capital Index 2016.

Malaysia also scored a ranking of 42 out of 130 countries, according to the report by the World Economic Forum (WEF).

It placed Malaysia with an overall score of 74.26, which indicates the percentage of human capital endowment. This marked an improvement of 10 places from last year.

The index found Malaysia strongest in the 15-24 age group, especially in quality of the education system which was ranked sixth in the world.

In the 24-55 age group, the country was ranked third for quality of staff training in the workplace.

“However, it suffers from a low ranking in the over 65 age group, where it ranks 106, mainly on the back of low educational attainment,” said the index which was released in Tianjin, China, yesterday.

According to the report, rich and poor countries alike are missing huge opportunities when it comes to making the most of their populations’ economic potential, with only 65 per cent on average of the world’s talent being optimised during all stages of the working lifetime.

“While the world has developed on average 81 per cent of the human capital potential of under-15s, only 66 per cent of the human capital potential of the next age group up, 15-24, has been similarly harnessed.

”This group is largely being failed when it comes to preparing them with the relevant skills for a successful education-to-employment transition,” said the report.

Those in the 25-54 group are similarly only making use of on average 63 per cent of their human capital potential while the older two age groups are likewise under-utilised, with an average of 67 per cent utilisation in the 55-64 age group dropping to 54 per cent in the age group of 65 and over.

The Human Capital Index measures countries’ ability to nurture, develop and deploy the talents of its people from school through to retirement.

Finland, Norway and Switzerland hold the top spots, utilising around 85 per cent of their human capital. Japan leads when it comes to 55 year olds and over.

In addition to measuring the 130 countries that comprise the report’s Human Capital Index, it also analyses public and private data from online platforms such as Care.com, LinkedIn, Uber and Upwork to generate insights on skills gaps and the potential of the online gig economy.

“Today’s transition to the Fourth Industrial Revolution, combined with a crisis of governance, creates an urgent need for the world’s educators and employers to fundamentally rethink human capital through dialogue and partnerships.

“Adaptation of educational institutions, labour market policy and workplaces are crucial to growth, equality and social stability,” said Klaus Schwab, founder and executive chairman of WEF.

The best performing countries in the East Asia and the Pacific scores were Japan (four), Singapore (13) and Korea (32) as global strongholds of human capital success, while countries such as Cambodia (100), Lao People’s Democratic Republic (106) and Myanmar (109) trail the region.

China (71) scores near the regional and overall index average with regard to its human capital performance.