World Bank Group President Jim Yong Kim said human capital was a key driver of sustainable, inclusive economic growth, “but investing in health and education has not gotten the attention it deserves”.
The institution noted that the development of human capital was key to reducing poverty and boosting economic growth throughout the 20th century, especially in countries in East Asia.
Yet many governments are neglecting human capital, which will be “critical” to succeed in the economy of the future, according to the report.
The report found 95 per cent of 15 year olds will survive until the age of 60.
According to the report’s global findings, more than half of all children born this year will lose half of their potential lifetime earnings because of poor health, poverty a lack of education.
The authors noted that investing in human capital makes people more productive, flexible and innovative – skills that have become increasingly important as workplaces evolved in response to rapid technological change.
“This index creates a direct line between improving outcomes in health and education, productivity and economic growth,” Kim said.
“I hope that it drives more countries to take urgent action and invest more – and more effectively – in their people.”
By analysing indicators such as child mortality, education rates and health, the World Bank report found that 56 percent of children born around the world this year will reach only half their earning potential.
The survey ranked 157 countries according to how productive their next generation of workers are likely to be.
Chad, South Sudan and Niger were at the bottom of the list, while Singapore, South Korea and Japan came at the top.
Countries that scored 0.5 out of 1 on the index – meaning they are losing half of their future economic potential – were estimated to lose 1.4 percent in annual economic growth over 50 years, the report said. Australia was give a score of 0.8.
In contrast, if children born in countries like Azerbaijan, Ecuador and Thailand – which all scored 0.6 – were to receive full quality education and healthcare, they would be 40 percent more productive by the time they entered the workforce.
With Thomson Reuters
Anna Patty is Workplace Editor for The Sydney Morning Herald. She is a former Education Editor, State Political Reporter and Health Reporter. Her reports on inequity in schools funding led to the Gonski reforms and won her national awards. Her coverage of health exposed unnecessary patient deaths at Campbelltown Hospital and led to judicial and parliamentary inquiries. At The Times of London, she exposed flaws in international medical trials.