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Employment and Social Developments in Europe 2014
Box 2: Human capital, competitiveness and productivity
Business surveys show how the availability of skilled labour is an important, common feature among the most competitive
EU countries (Chart 4). Results show that various strategies and investments in forming, maintaining and using human capital
are complementary and not exclusive. Educational systems that meet the needs of a competitive economy are supplemented
by companies that: actively provide training; prioritise the attraction and retention of talent; provide a quality job environ-
ment. This increases workers’ motivation and offers good general labour market conditions with productive labour relations.
What matters is having a skilled workforce at all levels — i.e. including with enough, readily available, competent senior
managers. If necessary, top competitive countries can use the pool of foreign workers for whom they represent an attrac-
tive destination. These countries also tend to better use their human capital and have high activity and employment rates.
Chart 4: Complementing various human capital strategies helps top EU competitive countries to have better
skilled workforce at all levels
Index values (0-10 index points) for respective statements — unweighted averages, 2014
Skilled labour is
readily available EU last 15
Health problems do not have 8 Labour relations are EU-26 average
a significant impact on companies 7 generally productive EU top 15
6
The educational system 5
meets the needs of 4 Worker motivation
a competitive economy 3 in companies is high
2
Competent senior managers 1 Apprenticeship is
are readily available 0 sufficiently implemented
International experience
of senior managers Employee training is
is generally significant a high priority in companies
Foreign high-skilled people Attracting and retaining talents
are attracted to your country's is a priority in companies
business environment Brain drain (well-educated and
skilled people) does not hinder
competitiveness in your economy
Sources: IMD World Competitiveness Yearbook 2014, International Institute for Management Development.
Notes: *Top EU countries include EU countries that were in 2014, according to the overall competitiveness ranking, among the top 15 competitive countries
(out of 60) and the last 15 EU countries includes those ranking in places from 46–60. **TOP_EU countries: SE, DE, DK, LU, NL, IE. *** LAST_EU countries:
IT, HU, SI, EL, RO, BG, HR. ****EU-26 (no data for MT and CY). *****Overall ranking of the World Competitiveness Yearbook is based on four main factors:
Economic Performance; Government Efficiency; Business Efficiency and Infrastructure.
The survey shows significant cross-country variance in how businesses assess the availability of human capital and the vari-
ous qualitative aspects associated with it. The higher the score, the stronger the agreement with the respective statement
on average in a given country. That is, the higher the score, the stronger the confidence amongst businesses concerning the
issue raised in the statement. A factor analysis of the country differences across the twelve statements in the survey reveals
two main strands of human capital strategy amongst businesses: from a productivity-related company perspective (factor 1:
Firms’ productivity), this mainly reflects the organisation’s competitive position and how it is affected by human capital; while
the workers’ perspective focusses on the individual’s endowment with skills and his/her health (factor 2: Workers’ capital).
Table 1 shows how the extracted factor correlates to the original twelve statements.
Table 1: Extracting a firm-related and a workers-related factor of human capital
Matrix of factor loadings (rotated)
Factor
Firms’ productivity Workers’ capital
Skilled labour is readily available .060 .911
Labour relations are generally productive .870 .195
Worker motivation in companies is high .813 .484
Apprenticeship is sufficiently implemented .753 .215
Employee training is a high priority in companie .898 .125
Attracting and retaining talents is a priority in companies .833 .229
Brain drain (well-educated and skilled people)
does not hinder competitiveness in your economy .559 .772
Foreign high-skilled people are attracted .760 .381
to your country’s business environment
International experience of senior managers is generally significant .774 .372
Competent senior managers are readily available .517 .790
The educational system meets the needs of a competitive economy .643 .631
Health problems do not have a significant impact on companies .186 .742
Principal Component Analysis, factor loadings after varimax-rotation
Source: DG EMPL calculations based on IMD World Competitiveness Yearbook 2014, International Institute for Management Development.
108
Box 2: Human capital, competitiveness and productivity
Business surveys show how the availability of skilled labour is an important, common feature among the most competitive
EU countries (Chart 4). Results show that various strategies and investments in forming, maintaining and using human capital
are complementary and not exclusive. Educational systems that meet the needs of a competitive economy are supplemented
by companies that: actively provide training; prioritise the attraction and retention of talent; provide a quality job environ-
ment. This increases workers’ motivation and offers good general labour market conditions with productive labour relations.
What matters is having a skilled workforce at all levels — i.e. including with enough, readily available, competent senior
managers. If necessary, top competitive countries can use the pool of foreign workers for whom they represent an attrac-
tive destination. These countries also tend to better use their human capital and have high activity and employment rates.
Chart 4: Complementing various human capital strategies helps top EU competitive countries to have better
skilled workforce at all levels
Index values (0-10 index points) for respective statements — unweighted averages, 2014
Skilled labour is
readily available EU last 15
Health problems do not have 8 Labour relations are EU-26 average
a significant impact on companies 7 generally productive EU top 15
6
The educational system 5
meets the needs of 4 Worker motivation
a competitive economy 3 in companies is high
2
Competent senior managers 1 Apprenticeship is
are readily available 0 sufficiently implemented
International experience
of senior managers Employee training is
is generally significant a high priority in companies
Foreign high-skilled people Attracting and retaining talents
are attracted to your country's is a priority in companies
business environment Brain drain (well-educated and
skilled people) does not hinder
competitiveness in your economy
Sources: IMD World Competitiveness Yearbook 2014, International Institute for Management Development.
Notes: *Top EU countries include EU countries that were in 2014, according to the overall competitiveness ranking, among the top 15 competitive countries
(out of 60) and the last 15 EU countries includes those ranking in places from 46–60. **TOP_EU countries: SE, DE, DK, LU, NL, IE. *** LAST_EU countries:
IT, HU, SI, EL, RO, BG, HR. ****EU-26 (no data for MT and CY). *****Overall ranking of the World Competitiveness Yearbook is based on four main factors:
Economic Performance; Government Efficiency; Business Efficiency and Infrastructure.
The survey shows significant cross-country variance in how businesses assess the availability of human capital and the vari-
ous qualitative aspects associated with it. The higher the score, the stronger the agreement with the respective statement
on average in a given country. That is, the higher the score, the stronger the confidence amongst businesses concerning the
issue raised in the statement. A factor analysis of the country differences across the twelve statements in the survey reveals
two main strands of human capital strategy amongst businesses: from a productivity-related company perspective (factor 1:
Firms’ productivity), this mainly reflects the organisation’s competitive position and how it is affected by human capital; while
the workers’ perspective focusses on the individual’s endowment with skills and his/her health (factor 2: Workers’ capital).
Table 1 shows how the extracted factor correlates to the original twelve statements.
Table 1: Extracting a firm-related and a workers-related factor of human capital
Matrix of factor loadings (rotated)
Factor
Firms’ productivity Workers’ capital
Skilled labour is readily available .060 .911
Labour relations are generally productive .870 .195
Worker motivation in companies is high .813 .484
Apprenticeship is sufficiently implemented .753 .215
Employee training is a high priority in companie .898 .125
Attracting and retaining talents is a priority in companies .833 .229
Brain drain (well-educated and skilled people)
does not hinder competitiveness in your economy .559 .772
Foreign high-skilled people are attracted .760 .381
to your country’s business environment
International experience of senior managers is generally significant .774 .372
Competent senior managers are readily available .517 .790
The educational system meets the needs of a competitive economy .643 .631
Health problems do not have a significant impact on companies .186 .742
Principal Component Analysis, factor loadings after varimax-rotation
Source: DG EMPL calculations based on IMD World Competitiveness Yearbook 2014, International Institute for Management Development.
108
