Introduction to the Topic

In this chapter, we explore how 'People as Resource' is a way of referring to a country's working people in terms of their existing productive skills and abilities. Unlike other resources like land or capital, human beings are the most valuable asset of a nation because they can develop their own potential through education, training, and healthcare. When the existing human resource is further developed by becoming more educated and healthy, we call it 'Human Capital Formation'.

Key Concepts Explained

1. Investment in Human Capital: Just like we invest in land or machinery to get a future return, investing in people through education, medical care, and training yields a return in the form of higher incomes and greater contributions to society. A healthy, educated person is more productive than one who is not.

2. Economic Activities by Men and Women: People engage in various activities to earn a living, which can be broadly divided into three sectors:

  • Primary Sector: Includes agriculture, forestry, animal husbandry, fishing, and mining.
  • Secondary Sector: Includes manufacturing and industrial activities.
  • Tertiary Sector: Includes trade, transport, communication, banking, education, and health.

3. Market and Non-Market Activities: Market activities involve the production of goods or services for pay or profit. Non-market activities are the production of goods or services for self-consumption, such as domestic chores performed by family members.

4. Quality of Population: The quality of the population depends on the literacy rate, health status (life expectancy), and skills formation. A high-quality population acts as a catalyst for economic growth.

5. Unemployment: This occurs when people who are willing to work at the prevailing wage rates cannot find jobs. In rural areas, we often see Seasonal Unemployment (during off-seasons) and Disguised Unemployment (where more people are working than required for a task). In urban areas, Educated Unemployment is a significant challenge.

Summary & Key Takeaways

  • Human beings are a resource, not a burden, provided they are skilled and healthy.
  • Education and health are the two most important investments to turn human beings into human capital.
  • Economic growth is directly linked to the quality of the workforce.
  • Unemployment represents a waste of human resource, leading to social and economic problems.
  • Transitioning from primary to secondary and tertiary sectors is vital for a country's development.