THROUGHPUT: THE CONNECT BETWEEN INPUT AND OUTPUT, THE PLACE OF HUMAN CAPITAL DEVELOPMENT
By
Prof. John Gambo Laah
Kaduna State University,
Kaduna
I feel highly honoured for the invitation extended to me by the management and Board of Trustees of Chartered Institute of Human Capital Development of Nigeria (CIHCDN) to be the Guest Lecturer for today’s event. I will like to congratulate the Board of Trustees of CIHCDN for establishing this Institute which, to me, is the only body with a clear mission on human capital development in Nigeria. I have been monitoring the impact this institute has made in the last few months in organizing cutting-edge lectures and inductions ceremonies that have been progressively successful in contents and messages. Let me state that as a university professor, I am a beneficiary of the investment in human capital. Permit me to say that I shall be sharing with you testimonies of my success in life. This is the second time in four months that I have been invited to be guest lecturer. I recall that in July this year I was Guest Lecturer at Command School, Kaduna on the occasion of a tree planting campaign in which four serving commissioners for Kaduna State government were in attendance and where I spoke on the topic “Save our Environment: Green It”. Today, I have been asked to talk on the topic “Throughput: The Connect between Input and Output, the Place of Human Capital Development”. Before some of you begin to think that I am ‘Jack of All Trade’, I will show you the connection between the two papers later on.
There are several genuine reasons why I should not be here today, my being present here is a mark of the respect I have for the organizers of this event. I believe that when people have come together to pursue a good course, then serious people need to identify with them. From the bottom oh my heart, I want to say that I identify with CIHCDN and just as I braced the odds to be here, I will always be available when the occasion demands.
This paper is structured in three parts, the first part looks at the concepts of human capital development. The second part looks at the challenges of human capital development with examples from Nigeria. The third part attempts to establish the connection between input and output in human capital development. The fourth part concludes by recommending appropriate measures of ensuring human capital development in Nigeria.
Concepts of Human Capital Development
May be I should start my presentation by answering the question what do is human capital? And what differentiates human capital from human population? Human capital development has become a very important concept in the 21st century as any meaningful industrial development hinges on effective human capital development. Development experts are of the opinion that there can never be reasonable achievement if human capital development is not taken seriously. At the risk of sounding too elementary, the term human capital was coined in the 1960s by Economist Theodore Schultz, to reflect the value of our human capacities. He believed human capital was like any other type of capital; it could be invested in through education, training and enhanced benefits that will lead to an improvement in the quality and level of production. For the sake of my presentation, I will adopt the Wikipidea definition human capital as the stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labour so as to produce economic value (Wikipidea, 2014). In other words human capital is a collection of resources--all the knowledge, talents, skills, abilities, experience, intelligence, training, judgment, and wisdom possessed individually and collectively by individuals in a population. These resources are the total capacity of the people that represents a form of wealth which can be directed to accomplish the goals of the nation or state.
According to Investopidea, the free investment dictionary, human capital is a measure of the economic value of an employee's skill set. The concept of human capital recognizes that not all labor is equal and that the quality of employees can be improved upon by investing in them. What this means is that the education, experience and abilities of an employee have an economic value for employers and for the economy as a whole. From the birth of the human capital theory, economists were actually interested in finding evidence showing the impact of the human capital on economic output and debating the effects of economic growth on accumulation of human capital in the economy and the association between education and health.
At the micro level we view inputs as the sum of investment made in human capital development, while the outputs are productive capacity of human capital. At a macro level, human capital is both input and output of economic growth.
This paper aims at highlighting the meaning of human capital development and explaining the connection between the input and output variables in human capital development. The paper draws from the Nigerian situation to explain the connection between inputs and outputs in human capital development and concludes that human capital development is the bedrock for viable economic development.
According to Dr. Adebayo Jimoh, the Group Managing Director/CEO of Odu’a Investment Company Limited, the role of human capital in the economic development of any country cannot be over emphasized. Speaking at a distinguished Alumnus Annual Lecture organized by the University of Ibadan Alumni Association (UIAA), Oyo State Chapter on Wednesday, 12 March, 2012 at the Trenchard Hall, University of Ibadan, he observed that:
A nation’s human capital is vital for future technological breakthrough, international competitiveness and sustainable development. Rapid socio-economic development depends essentially on the caliber of human capital in the nation
Enyekit, Amaehule and Teerah (2011:64) see human capital development as:
human capital development teaches people how to utilize the power of diverse thinking styles (analytical and intuitive) so that they achieve holistic best practical solution. Human capital development and training and development are basically the same. It takes human capital to organize and rationalize the contributions of other factors of production before a result oriented productive goal can be achieve in any industrial setting. Therefore human capital development is about supporting cum investing in human capital, coaching, training, internship and human capital management…..Human capital development as a process of increasing human knowledge, enhance skills in vocational and technical education for increase in productivity and stimulate resourcefulness of trainees.
Often people have tended to take the population of a country as synonymous with human resources. This is not entirely correct as human resources involve the transformation of population into resource and this transformation is essentially the investment made on education, training and retraining of the work force.
Challenges of Human Capital Development in Nigeria
Both descriptive and statistical analysis of government’s commitment to human capital development shows that investment in the components of human capital development (that is, education and health) has not been encouraging. This has affected economic growth in Nigeria. Nigeria’s ranking in the global education indices is among the lowest in the world. The bane of education in Nigeria is underfunding, insufficient budgetary allocation and lack of well trained professionals in the educational sector. These factors pose major challenges to the development of knowledge and skills in human capital, and consequently could affect economic growth negatively.
The underdevelopment of Nigeria can be partly blamed on unplanned efforts by our rulers towards the development of human capital. There are numerous other variables, which affect human development that are sometimes overlooked, for example, expectation of life depends on adequate consumption of food, nutrition, child and mother care, specially maternity child bearing, health, sanitation, potable water supply and hygiene.
Some of the major challenges confronting human capital development in Nigeria include:
i. The collapse of the education system.
ii. Human capital flight
iii. Inadequate skilled human capacity
Many experts have observed that Nigeria could never attain the status of a self-reliant nation without first creating a knowledge-based society through universal education. From what we see in many African and Asian countries, the abundance of natural resources could not guarantee development. Dr. Doyin Salami a Senior Lecturer at Lagos Business School (LBS) and a member of the Central Bank of Nigeria’s (CBN’s) Monetary Policy Committee (MPC), bemoaned the quality of human capital in Nigeria. Dr. Salami who spoke at Rand Merchant Bank of Nigeria (RMB) investors’ conference in Lagos stated the need for policies that would develop knowledge, competence and creativity in the country. According to him:
If we are able to overcome that with some determination and on a basis which suggests that we demand a national consensus and with educational reform, we would go very far.
With even plans to rebase the Gross Domestic Product (GDP), growth in all sectors would likely slow down in the next two or three years.
Challenges of Human Capital Development in Nigeria include:
Ø non alignment with national human capital development strategy
Ø insufficient funds for implementation
Ø decay of basic infrastructure
Ø Lack of commitment by policy makers
Inconsistent and Policy Somersault and
Ø Lack of Ethical Orientation
Some of the strategic objectives that have been identified towards achieving the human capital vision in Nigeria include:
(i) Creating a pool of highly skilled, talented, knowledgeable and competentworkforce with the right ethical orientation.
(ii) Developing a mechanism for continuously upgrading the skills of the Nigerian workforce
(iii) Creating an environment conducive for attracting and retaining high quality workforce
(iiv Creating the appropriate mechanism for effective engagement and development of the available skilled workforce
(v) Developing a financially literate community/society
(vi) Developing mechanism for Nigerians talents in Diaspora and other external stakeholders to support the growth and development of the financial sector
Connection between Input and Output in Human Capital Development
It is very common to hear people talking about garbage in and garbage out in reference to what you get from a computer system. This is in reference to the fact that what you put in is what you get out. The concept of throughput was used as a computer term to measure the overall performance of a computer system in sending data through its components. In the communication world, throughput is a measure of the level of efficiency of a network expressed as the data transfer rate of useful and non-redundant information. In this case the data transfer rate will depend on factors such as bandwidth and congestion. However, the term is generally used to refer to the productivity of a machine, a system, a procedure or a process over a period of time. It is essentially an indicator of system performance.
In business, throughput is the rate at which an organization reaches a given goal. It is viewed as the rate that a business is able to produce a product or service for a given unit of time. Throughput is sometimes used to mean the output.
According to Investopidea, the idea of throughput is part of the Theory of Constraints of business management. The guiding ideology of the Theory of Constraints is that a chain is only as strong as its weakest link. In other words, there are usually a number of constraints that make a system not to achieve its set goals. In an organization iy takes only one unserious person to destroy a company. Just like we say that it takes only one rotten egg to spoil the rest of the eggs. The advocates of this theory attempt to minimize how weak links affect a company's performance. Additionally, firms will often measure throughput using Little's Law, which states throughput is equal to units produced divided by time.
It is safe for us to imply that the quality of human capital depends on the inputs or investment therein. It is important to note that the volume of outputs of the human capital development is measured by the volume of inputs. The inputs here refer to the investment made especially in the educational sector and in health care. Since the volume of output is measured by the volume of inputs in the education sector, the ratio of output to inputs does not accurately measure productivity performance for that sector. The objective of this section paper is to highlight the required input for human capital development and show the correlation between input and output in human capital development.
Human capital development depends upon (i) the quantity and quality of inputs used in building the human capital (ii) the quality dimension of the processes of capacity building and (iii) the outcome/output.
In discussing the connection between the input and output in human capital development there is the need to state here that many people do not seem to realize that the present level of human capital development is a result of the investment that has been made into it. This investment is in the area of education and health care delivery. In other words, the present level of human capital is a function of the level of investment made in the past.