SDGs: Why invest in human capital?

William Kamkwamba, author of “The Boy Who Harnessed the Wind.” Photo by: Howard County Library / CC BY-NC-ND

SAN FRANCISCO — “The Boy Who Harnessed the Wind” is the story of William Kamkwamba, a Malawian teenager who constructed a windmill from spare parts to power his family’s home and generate electricity for his entire community. It became an international bestseller because, as the book cover puts it, it is a story that goes beyond currents of electricity and extends to currents of hope. This young inventor worked from rough plans he found in a library book. He is one of so many examples of the potential of people to develop solutions to the problems they face.

6 things to watch at Global Goals Week 

There is plenty to discuss in New York next week as international delegations arrive for Global Goals Week: A new reform-minded U.N. chief, an unpredictable American president, and humanitarian crises worldwide. Meanwhile, emerging technologies and the private sector promise radical visions of completely new models of development.

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A major focus of the 2017 United Nations General Assembly this month will be how to finance the Sustainable Development Goals, with just 13 years left to achieve 17 ambitious targets. But a range of events — from the Sustainable Development Impact Summit, organized by the World Economic Forum; to Goalkeepers, hosted by the Bill & Melinda Gates Foundation; and We the Future, organized by the Skoll Foundation, TED and the United Nations Foundation — will highlight the role of human capital, in addition to financial capital.

“A nation’s human capital endowment — the knowledge and skills embodied in individuals that enable them to create economic value — can be a more important determinant of its long-term success than virtually any other resource,” the World Economic Forum explains in the preface to its 2016 Human Capital Report, which was recently updated in a newly released 2017 report. The document, like many of the events at UNGA, aims to foster public-private partnerships, in this case to leverage the potential of human capital for sustainable global development — or as the World Economic Forum puts it, “a human-centric vision of the future of work that recognizes people’s knowledge, talents, creativity and skills as key drivers of a prosperous and inclusive economy,”

Experts explained to Devex that since a fundamental tenet of the Sustainable Development Agenda is to “leave no one behind,” it is critical that efforts to advance the goals also enhance the opportunities for the poorest to participate. As the SDGs call for action from people at all levels, and manifest the aspirations of those around the world, people from all backgrounds must be in charge of their future development.

Health, education, and power

Three of the four speakers who will appear onstage in a We the Future session on “Model for Change: Developing Human Capital,” which Devex will moderate, are part of the Skoll Foundation portfolio. Proximity Designs uses human-centered design to improve the economic prospects of farmers in Myanmar. Camfed invests in girls and women in the poorest rural communities of sub-Saharan Africa. And Medic Mobile develops mobile and web tools to help community health workers providing care in hard-to-reach communities. Each of these models point to ways to flip the traditional approach to global development on its head, so that beneficiaries become agents of change.

“Moving forward, the focus of all agencies and partners should be on empowering those left out and left behind,” Alka Bhatia, economics advisor for Malawi and Namibia at the United Nations Development Programme, told Devex via email. “The powerful normative underpinning of the SDGs — leave no one behind — should be actively implemented to be able to achieve the SDGs. The gap between the ‘gown’ and the ‘town’ needs to be bridged urgently.”

Investing in human capital is necessary but not sufficient for sustainable development, she said. While strengthening the two pillars of human capital — education and health — will turn populations into the skilled workforces needed to make them the greatest assets for their countries, these efforts mean little without a conducive policy framework for people to reach their full potential. For instance, people living in fear for their lives, without access to the internet, or without freedoms to voice their opinions will not be able to take responsibility to shape their lives and impact their communities.

“I don't want to take away from importance of investing in education and health, but what I think a conversation like that tends to do is fail to recognize the elephant in the room, which is power structures,” Rohini Pande, a professor at Harvard Kennedy School whose research has focused on financial inclusion for Indian women, told Devex. “Human capital is important, but when we have these conversations about going beyond economic well-being and start talking about education and health, it doesn't answer the question of, in the end, what are the sets of rights and capabilities you want people to be able to exercise?”

The economic case

What does investing in human capital look like at your organization? What is your message for the global development community about its importance? Tweet us at @devex and @catherinecheney, and help shape our discussion on human capital at We the Future, September 21.

“There is no economic development without human development,” said Jonathan Lewis, who started an annual conference called Opportunity Collaboration that brings together leaders working on solutions to poverty, and recently wrote a book about social entrepreneurship careers. “We are not in the economic development business; we’re in the human development business.”

The World Bank points to investing in human capital — “including childhood development, skills for jobs, and equal opportunities in education, health, and training” — as one of three key drivers of its work to end extreme poverty and promote shared prosperity.

“Governments that invest early in a skilled, healthy, productive workforce are enhancing their current and future inclusive economic growth potential,” writes Mahmoud Mohieldin, senior vice president for the 2030 Development Agenda, United Nations Relations, and Partnerships at the World Bank. “The cost of falling short in equipping children with foundational skills is unacceptably high, and the evidence supporting this conclusion is more evident every day. In an ever more technologically complex and digital world, governments must recognise that these investments will not just lead to inclusive and sustainable economic growth. They will also, more importantly, establish the social foundations that can act as a safeguard against instability, violence and conflict.”

Investments in human capital are just as critical as investments in hard infrastructure, he writes — particularly in this era of rapid technological transformation that is making the traditional pathways out of poverty a thing of the past. As experts told Devex last month, when it comes to the future of work, the global development community must prepare for disruption. Yet high unemployment and underemployment rates point to how many countries are underutilizing their human capital, which is why so many events in New York next week will focus on investments in areas such as entrepreneurship, in order to help youth realize their potential. As startups such as Andela in Nigeria put it, the problem is that while talent is evenly distributed, opportunity is not.

Time for innovation

New models are emerging to tap into human capital for the SDGs. One example is Solve, an initiative that brings leaders together across sectors to develop solutions to actionable challenges; Solve will host a live pitch event this weekend. Another is UNLEASH, the innovation lab for the SDGs that launched last month in Denmark with plans to move country to country until the year 2030. In their Goalkeepers report, ahead of the event next week, billionaire philanthropists Bill and Melinda Gates said that effective leadership is the key to achieving the SDGs — and only by investing in human capital can the global development community help leaders everywhere take action to put the world on course for the SDGs.

“Investing in human capital development makes economic sense. Without it, investing in Malawi is less attractive, youth employment will over time lead to increasing tensions and human capacity and potential will be lost,” Mia Seppo, resident representative of the United Nations Development Program in Malawi, said in a talk at the Economics Association of Malawi annual conference in 2014. She called for investments to improve public health, bring down stunting rates, increase the quality of education, stem population growth, and create jobs for youth. “In today’s increasingly competitive world, sustaining growth requires continuous improvement in productivity and efficiency, which in turn requires, among other things, sustained investment in human capital development.”

Returns on such investment are hard to measure but high, she explained in a talk on why investment in human capital is one of the most critical determinants of sustainable global development.

“I’m sure that you are aware of the great story of William Kamkwamba, which is now a book,” she concluded. “It is this creativity, this talent, that we need to harness, much as William did with the wind.”

Devex wants to hear from you. What does investing in human capital look like at your organization or what is your message for the global development community about its importance? Tweet us at @devex and @catherinecheney, and help shape our discussion on human capital at We the Future, September 21.

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About the author

  • Cheney catherine%2520%25281%2529

    Catherine Cheney

    Catherine Cheney is a Senior Reporter for Devex. She covers the West Coast of the U.S., focusing on the role of technology and innovation in achieving the Sustainable Development Goals. And she frequently represents Devex as a speaker and moderator. Prior to joining Devex, Catherine earned her bachelor’s and master’s degrees from Yale University, worked as a web producer for POLITICO and reporter for World Politics Review, and helped to launch NationSwell. Catherine has reported from all over the world, and freelanced for outlets including the Atlantic and the Washington Post. She is also the West Coast ambassador for the Solutions Journalism Network, a nonprofit that trains and connects journalists to cover responses to problems.