Estonia achieves its best ranking in Human Capital Index
The World Economic Forum has ranked Estonia 16th out of 124 nations on an index that measures how well countries nurture, develop and deploy its people, with a focus on education, skills and employment.
“Talent, not capital, will be the key factor linking innovation, competitiveness and growth in the 21st century. Governments, business leaders, educational institutions and individuals must each understand better the global talent value chain. Business, in particular, must re-think its role as a consumer of ‘ready-made’ human capital to proactively seek out, engage and develop people’s potential,” Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, said in a foreword.
The index aims to understand whether countries are wasting or leveraging their human potential. It takes a life-course approach to human capital, evaluating the levels of education, skills and employment available to people in five distinct age groups, starting from under 15s to the over 65s. The aim is to assess the outcome of past and present investments in human capital and offer insight into what a country’s talent base will look like in the future. The index covers 124 countries, representing between them 92 percent of the world’s population.
Estonia's position in the index has improved from 27 in 2013 to 16 now, just ahead of the United States. By comparison, Lithuania is at 18, the UK at 19 and Germany at 22. Estonia's northern neighbor Finland, however, gets most of the glory, by being the best-performing country in the world when it comes to building and leveraging its human capital potential, taking the top spot on the under 15 and 25–54 age group pillars and scoring in the top 10 for the remaining age groups.
The age groups measured in the index
Under 15 years – the youngest members of the population for whom education is assessed among the most critical factors. Estonia ranks 10 overall and stands out for its very high basic education survival rate (the number of pupils dropping out is very low).
15-24 years – youth for whom factors such as higher education and skills use in the workplace are assessed. Estonia scores 18 overall.
25-55 years – the bulk of the labor force, for whom continued learning and employment opportunities are assessed. Estonia ranks 23 overall, but as pointed out by various reports recently, it struggles when it comes to finding skilled employees – the country is at 97 by this measure.
55-64 years – the most senior members of the workforce for whom attainment and employment opportunities are assessed. Estonia comes in at 11 overall.
65 and over years – the oldest members of the population, for whom both continued opportunity and health are assessed. Estonia ranks again at 11, although there is a substantial gap between educational attainment and economic participation in this age group – the country is at 76 for labor force participation rate.
In a potentially more positive news for Estonia, the report points out that for some countries, such as Finland, there is an overlap of its position in the index, and in the recent OECD ranking of countries for the maths and science skills of their 15-year-olds. Finland is doing very well in both – number 1 in the Human Capital Index and number 6 in the OECD report. Estonia, which was a place behind Finland for the maths and science, is also in the top twenty for fulfilling people’s potential.
However, the report also highlights that none of the countries has developed and deployed all of its human capital potential – for the leading country Finland the figure is 86 percent, for Estonia it is 80 percent.