Measuring Human Capital in the Knowledge Economy
As the ministry responsible for research and innovation in British Columbia, the Ministry of Advanced Education and Labour Market Development needs to identify effective ways to measure the economic and social benefits of government’s research investments. Achieving this goal requires the use of performance measures capable of highlighting the connection between B.C.’s research funding and actual outcomes—social, environmental and economic.
Traditional performance measures, however, make it difficult to understand the relationship between research investments and results. Measuring the number of patents or publications in B.C., for example, ignores the innovation process and tells us nothing about whether technologies or products will be successful in the marketplace. These measurements cannot explain what publicly funded research “buys.”
Working together with the Centre for Policy Research in Science and Technology at Simon Fraser University, the ministry has determined that the main outcome of its research investments is the development of B.C.’s human capital—which the Organization for Economic Co-operation and Development (OECD) defines as “the knowledge, skills, competencies and other attributes embodied in individuals that are relevant to personal, social and economic well-being.”
Human capital is also the foundation of a knowledge-based economy. Whether or not specific research initiatives deliver a product, the research process itself is invaluable, as it increases the knowledge embodied in human capital. This knowledge shapes innovation processes and enables technology transfer, which is essential for successful innovation.
The authors of the report assert that since the real value of research lies in the development of human capital—this includes ensuring access to research opportunities, resources, and partnerships—the primary performance measure for British Columbia’s research investments must capture the returns on research expenditures that support human capital development.
Specific measurements could involve tracking the activities, career paths, and achievements of graduate students with research experience that was publicly funded (e.g. through scholarships or assistantships) against a baseline of graduate students with research degrees that were not publicly funded. This would allow the government to measure the rateofreturn on its research investments, both in terms of employment advantages and any increased likelihood of continuing researchrelated careers for those with publicly funded research experience. Information gathered in this process may also enable government to measure the success of research investments as a means of keeping highly qualified researchers in the province.
Gaining insight into the relationship between research investments and human capital outcomes will provide the ministry with the knowledge it needs to assess its current investments and to maximize the value of public funding in future initiatives.
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