India has moved up two spots on the World Economic Forum’s (WEF) Human Capital Index 2017. The country ranks 103rd of 130 countries, up from 105th the year before.

Norway leads the latest rankings, followed by Finland, Switzerland, the US and Denmark. India’s poor performance on the index places it behind most other emerging economies such as Brazil (77th), Indonesia (65th) and other South Asian countries such as Sri Lanka (70th) and Nepal (98th). The country ranks even lower than Kenya (78th), Myanmar (89th) and Ghana (72nd). 

  1. The WEF index measures a country’s performance on four key areas of human capital development: capacity, which is a function of past investments in education; deployment, which measures the application and accumulation of skills through work; development, which takes into account the education of the next generation of the workforce and the continued skilling of labour force, and know-how, which measures the breadth and depth of specialised skills use at work.
  2. Of the four areas, India scores the highest in development, followed by know-how. 
  3. The country’s comparatively better performance on development is large because of a higher score on secondary enrollment gender gap and surprisingly on the quality of the education system. 
  4. The country’s performance on the latter is based on an executive opinion survey carried out by the WEF in 2016-17, which asks participants how well does the education system in their country meets the needs of a competitive economy. 
  5. On the know-how sub-index, the country fares better largely due to higher scores on economic complexity and availability of skilled employees.
  6. While the former is a measure of the degree of sophistication of a country’s “productive knowledge” that can be empirically observed in the quality of its export products, performance on the latter is based on an executive opinion survey carried out by the WEF in 2016-17.

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