Endogenous growth theory emphasizes the role of human capital from "summary" of Growth Theory by Robert M. Solow
Endogenous growth theory posits that sustained economic growth is driven by factors internal to the economic system rather than external forces. One crucial factor highlighted in this theory is human capital. Human capital refers to the knowledge, skills, and abilities of individuals that contribute to their productivity and overall economic output. In the context of endogenous growth theory, human capital plays a central role in driving technological progress and innovation. As individuals acquire more knowledge and skills through education, training, and experience, they are better equipped to develop new technologies, improve production processes, and enhance overall economic efficiency. Furthermore, the accumulation of human capital is seen as a key determinant of a country's long-term growth potential. Countries that invest in education, training, and other forms of human capital development are more likely to experience sustained economic growth and prosperity over time. By contrast, countries that neglect investments in human capital may struggle to keep pace with technological advancements and global competition.- The emphasis on human capital in endogenous growth theory underscores the importance of investing in education, training, and skills development as a means to drive economic progress and enhance long-term growth prospects. This perspective highlights the critical role that individuals play in shaping the trajectory of economic development and underscores the need for policies that support the acquisition and accumulation of human capital in order to foster sustained and inclusive growth.
