[Lana Wong]
The flagship report launching today, Building Human Capital Where It Matters, calls for broader investments in where, in where, the places where human capital is built every day, homes, neighborhoods, and workplaces. We’re also introducing the expanded Human Capital Index Plus (HCI+), which provides new global evidence and data on health, education, and employment, and how these factors shape lifetime productivity. Over the next hour, we’ll hear about the World Bank human capital priorities, hear from one of Africa’s leading community voices, unpack new global evidence from the report, and conclude with a panel focused on action. So, to open our discussion, please join me in welcoming Paschal Donohoe, Managing Director and Chief Knowledge Officer of the World Bank Group. Thank you so much for joining us, Pascal.
[Paschal Donohoe]
Good morning, Lana. Great to be here. And thank you to everybody who is here in person, to everybody participating virtually. And most particularly, I want to extend a warm word of thanks to Norbert (Schady), to Alaka (Holla), and to Joana (Silva) for their great commitment in producing this exceptional report and for the commitment of their human capital to this publication. To the three of you, we are indebted. Thank you.
[Lana Wong]
Fantastic. Let’s start with the basics. What is human capital? Why does it matter so much to the World Bank Group?
[Paschal Donohoe]
One of the things that’s very wonderful about this report is the precision that it brings to what human capital is and then how it lays out the policy interventions that can make a difference. But what I found very interesting is to focus on settings, the role of location in doing it. The report, very interestingly, opens up with a quotation from Adam Smith. Perhaps Adam Smith is not the economist that you would expect to be quoted at the very start of such a publication because he had, at least in the Inquiry of Wealth of Nations, quite a minimalist view of what the state could be, though it varied in some of his other works. He, in this particular quote, talks about the acquisition of talents. I think that’s a very interesting starting point to this report because what it does is it comprehensively looks at what are the maybe so-called “social interventions” that have a profoundly economic effect. This report brings a quantitative measurement to what the different social contributions can be, which sees them through a very, very economic lens. And many, many different parts of the report do it, which is why it’s so helpful to us here in the World Bank.
[Lana Wong]
Great. Well, and as you say, this report is really challenging policymakers to rethink their approaches. So, what are you learning about how policymakers can think and act to really reverse this stalled progress?
[Paschal Donohoe]
I thought the sections in the report from around page 61 in particular were really, really interesting because, from my point of view, it laid out some perspectives here, particularly in relation to neighborhoods and a sense of place that I know really merit further consideration and discussion. We live in an economy at the moment and in a global setting where the big forces of change feel so intangible until they have a very tangible effect on people’s lives. This report highlights tangibility in a really clear way. In particular, the work where it highlights policies in relation to human capital thoughts for struggling neighborhoods I found to be very, very wise. In the work that we are doing now across many different parts of the World Bank, for example, with regard to infrastructure, with regard to cities, with regard to the physical environment, it highlights that these very tangible interventions, when located in a sense of place, can have a big impact on human capital. That sense of what is around you and the tangible effect it has on your sense of inclusion and the development of your own human capital; I found really telling.
[Lana Wong]
That’s great. That is something that we will be digging into later when we hear from the authors and dig into the new and creative ways to approach things in the report. How would you see the World Bank Group changing the way it works to accelerate human capital as you look forward?
[Paschal Donohoe]
Number one, everybody who’s working in our different policy areas should and will have a chance to be exposed to this report. I’m very much struck at times that we all come along to events like this and you neither have time to read the report nor think about it afterwards because we’re so busy. This is a report that I spent time this morning looking through, and everybody should do it because it’s really, really full of wisdom. What are the takeaways in relation to it for me? There are three. Number one, integration matters, because this report talks about a number of very important policy areas and then a number of very important settings. I’ve talked about the neighborhood because I think it’s really novel and correct. The report also talks about what happens to you in the workplace, and it being a very active space as opposed to something you arrive into, complete or incomplete, and leave, complete or incomplete. It talks about how active that should be from a policy point of view. We need to think about integration, which we are trying to and working hard to do when we talk about our efforts as a World Bank Group. Number two, this report talks by highlighting settings at the number of different policy touchpoints that can make a difference to human capital accumulation. These are all policy touchpoints that we’re very, very active in. As we try to integrate them together organizationally through the Human Capital Index Plus, we then need to look at how our integrated policy impacts work. Then thirdly and finally, financing. We have a huge balance sheet. What the World Bank does so well is that it integrates policy interventions into financing solutions. It tries to do both. Again, when we are thinking about this report, we have to look at how we can do it. This is work of necessity. The early pages of the report remind us of the, at best, plateauing of human capital accumulation, at best. But there’s lots of insights in this report that, unfortunately, tell us it’s going in the other direction. Therefore, this is work that by necessity we have to engage in. That’s why it is such an important publication to spend time on. Then in our April meeting, we’re going to bring forward a new instrument that will allow countries to actually understand where they are in this framework and to compare where they are to others and really excitingly, then give them a quick synopsis of what they can do to make a difference.
[Lana Wong]
Fantastic.
[Paschal Donohoe]
Yeah.
[Lana Wong]
Yes. Well, we could not agree more on the urgency of this issue and the importance of this report to call for the integration, the holistic nature, but also using the place-based lens on policy-making and finance for the future. Our collective future depends on it.
[Paschal Donohoe]
It very much does. It reminds us that for the greatest collective challenges, it’s the progress that we make at the individual level that is so important. This report, by reminding us of settings and the variety of policies that make a difference, is a really important contribution. But as with any report, no matter how good it is, it’s how we use it that really matters. And that’s what we’re here for today. So, thank you again to our three authors for their human capital in getting us to this point. And I don’t think I’ve ever seen a more eminent panel than we have here today. I know we’ll all be enriched by the contributions you make later on in the day into this piece of work. Thank you all very much.
[Lana Wong]
Thank you so much for your words. So, thank you for being here for that. And so, if now we can turn to our keynote speaker, Dr. Kennedy Odede, who is joining us virtually. Kennedy is the founder and CEO of SHOFCO, which is Kenya’s largest grassroots movement that has transformed the lives of millions of urban slum residents by providing holistic needs-driven services and redefining the potential of citizen-led change. I’ve had the privilege and pleasure of knowing Kennedy since 2016 and have been thrilled to see the potential and the impact of SHOFCO grow from strength to strength over the past decade. Last year, Kennedy was the first Kenyan recipient of the UN Nelson Mandela Prize, and in 2024, he was named one of Time’s most influential people. So, Kennedy, your work is living testimony to the power of community-led solutions. Please, share what you’ve learned about investing in people where they live and grow. Karibu, Kennedy.
[Kennedy Odede]
Asante. Thank you so much, Lena. Audience members, ladies and gentlemen, we are in a defining moment in time. Do you feel it? I’ve been saying this for a while now. Aid is broken. We must change our ways. Now, I believe that time has really come. Things are being shaken up globally. That’s something we can’t hide from. What will we do about it? How will we take this opportunity for change? I say this is a moment that calls for pro-democracy. Citizen-led movement is what I call people power, community power. And at this moment, we are being offered something rare, a blank canvas. A chance to decide what truly matters for the future of our nations. Today, this report by the World Bank Group asks us to look at that canvas and rewrite the system to invest in human capital. I stand with them. Join me. My name is Kennedy Odede, and I grew up in Kibera, one of the largest informal settlements in Africa. I became a street child at the age of 10, and lived in Kibera for 23 years. I experienced poverty, violence, and lack of opportunity, and deep gender inequality, but I also witnessed hope. Hope that persists in the slams and in my community. I saw that people wanted something different for themselves, for their families and their communities. I realized that the solutions to my problems were in my hands. And I sat down with my friends and a tree, talked them through, and SHOFCO, my organization, was born. At SHOFCO, we funded ourselves. I always say that donor money was a bonus because our biggest resource was people, people. In Kibera, we did not lack intelligence. We did not lack ambition. We did not lack ideas, but what we lacked were systems that organized where human capital is actually built. Human capital was, and still is, built in our homes, where families make impossible choices every day. It is built in our neighborhoods, where safety, water, schools, and trust determine how far a child could go. And it’s built in how we make a living, how we create our own workplaces, employ others, and drive our entrepreneurial spirit from the informal to formal. All of it counts. The World Bank Group report shows us that no country has ever achieved sustained growth or reduced poverty without investing in human capital. My friends, I caution you. Countries around the world are seeing an extended global rise in political violence and a decline in life expectancy. But yet in Kenya, we are experiencing rising indicators for wellbeing and increasing government support for the poorest. How is it possible? Because today, through SHOFCO, 1.5 million Kenyans are being mobilized to work collectively, peacefully, and inclusively to advocate for government services. We organize and train people through our SHOFCO Urban Network to understand their rights, participate in elections, navigate the law, and hold their government accountable. This organizing power has helped unlock more than 48 million dollars in public resources from the Kenyan government for basic services for the poorest. And the government is responding. But why? Because they want policies to reflect where life is actually happening. We are responding to their priorities, the things that keep the government up at night. Our government and institutions are noticing the power of community, the power of neighbors, the power of youth voices, the impact has been transformative. The historically tense relationship between the government and the people living in poverty is beginning to shift. Let me tell you what I’ve witnessed. Organized communities are the builders of human capital every day. Yes, they are a resource. Yes, anything additional is a bonus. But we need to do... But we don’t need a system that recognizes this. I have been focused on human capital for two decades, trying to get my community voice heard from Kenya to the world. And I’m so proud today to see an institution like the World Bank advocating for it. My friends, the strongest investment we can make is in people, where they live, work, and raise their family. That’s how we will build nations that work for everyone. Thank you so much.
[Lana Wong]
Asante sana, ndugu Kennedy. That was so inspiring, and that really made the report and these themes and the ideas that we’re talking about real. So, we thank Kennedy for joining us, even though it was virtual. So, now let’s hear from the author of this flagship report, Building Human Capital Where It Matters: Homes, Neighborhoods, and Work (Workplaces), and learn more about the big picture for human capital globally and the ways we can measure it. So, please welcome a trio of expert economists from the World Bank Group’s People Vice Presidency, Dr. Norbert Schady, Chief Economist, Dr. Joana Silva, Deputy Chief Economist, excuse me, and Dr. Alaka Holla, Lead Economist. Welcome to the stage.
[Norbert Schady]
Thank you. I’m going to start off where Paschal and Lana took us, which is human capital is critical. It’s absolutely critical. The most recent economic estimates are that about two-thirds of the differences across countries in their per capita GDP are accounted for by human capital. And human capital also explains vast differences in incomes across people within countries, because very often human capital is the only form of capital that poor people have. But as Paschal pointed out, human capital in many dimensions in developing countries has either stagnated or gone backwards, and we can’t have this. So let me just give you a few facts. Stature, adult height, is often considered to be a comprehensive measure of health status, at least up until age 25, when people stop growing. Over the 20th century in Europe, people grew one centimeter per decade. Reflecting better health. In the last 30 years, people in sub-Saharan Africa have, on average, grown three centimeters shorter. This is almost unprecedented, that people have gotten shorter over time rather than taller. Let me turn next to education. We all know that everything begins with education. Without education, there is no chance for countries to progress. And yet what we find is that despite the fact that there’s been an increase in the coverage of education systems around the world. Children and young people in developing countries now are less likely to be able to read with comprehension, are less likely to be able to do simple math problems than they were 15 or 20 years ago. This should shock us all. Third, let’s talk about human capital acquired on the job. A lot of human capital can be acquired on the job, but it often isn’t. There are vast differences across countries in how much human capital is acquired on the job. On average, a worker, for example, in the US, will accumulate at work about three times as much human capital as a worker in India. These are averages. Finally, let me talk about the fact that there’s a clear gender dimension to this. Everybody suffers, but very often, women suffer the most. In order to acquire human capital at work, people must work, almost by definition. And yet what we see is that while labor force participation rates developed in the richest high-income countries (and they) have increased over time, they have stagnated in middle-income and lower middle-income and low-income countries. So, the opportunities for women to acquire human capital through work are no better now than they were 40 years ago in the poorer countries. So, that’s the overall picture. What this report says is, what we’ve done so far is focused on individual ministries, say the Ministry of Education, the Ministry of Health, the Ministry of Social Welfare. This is really important, yes, but there’s more to the picture than just this. The report says that the settings in which human capital can be accumulated, acquired, are really important, and that we need to think about these. As Paschal was saying, we need to think about the home. What happens in the home? Under what circumstances do children accumulate human capital in the home? Second, what happens in a neighborhood? A neighborhood determines access to social services, yes, but also a whole array of other things, whether or not there’s violence in the neighborhood, whether there’s economic opportunity, whether there’s pollution that stunts children’s development. Finally, work, as I mentioned before. We need to think about work. Under what circumstances are people able to invest in their human capital at work? What should employers be doing as well as people who are working? These are critical considerations. We’re very pleased to be launching this report here with all of you. We’re also, as was mentioned, launching at the same time the Human Capital Index Plus, which allows countries to quantify where they are particularly lagging in terms of their human capital and what specific policies would allow them to increase their human capital levels. If you look at the screen, there’s a QR code. If you use the QR code, you’ll be able to download an app. And in the app, you can actually see where every country stands and what determines their human capital shortfalls. So, with that, thank you very much, and I look forward to the discussion.
[Alaka Holla]
Thank you, Norbert. I’m going to talk to you about the home. The home is where human capital begins. When children are very young, they’re completely dependent on their families for early nutrition, early stimulation, their cognitive skills, and keeping a safe environment. But even when children progress to school and through adolescence, they’re still completely dependent on their family’s decisions, whether they go to school, what school they go to, how much study time they get. And as they progress to the labor market, we see, again, that families make a lot of decisions that impinge on everyone’s human capital, who works, where they work, whether they migrate. Throughout the life cycle, we see that someone’s diet, their mental health, the risky behaviors they engage in, all start within the home. And so, what do we find in the flagship? What does our research say? Consistent with other research, we find that gaps emerge early. By age five, in low and middle-income countries, before most children have attended school, we see gaps in early vocabulary between children of mothers of different education backgrounds. But what’s so surprising that we found is that these gaps remain constant throughout childhood and adolescence. Here we are showing you data from Ethiopia, where we can follow the same children over time. In our report and in interactive graphs that we’ve made available online, you can see data from other countries, but let’s focus on Ethiopia here. We see that by age five, children of mothers who have secondary education or more have much higher vocabulary than children whose mothers have a primary education or less. As children age, as they’re going to school, you see this gap just stays constant. And so, what lies behind this? What is maternal education conferring on these children? And like other research, we also find that both resources within the home and the care environment in the home really matter. So, people need resources to buy nutritious food. They often need resources to attend good schools. But the care environment, whether parents are reading to their children, what forms of discipline they use, also really impinge on human capital. But what’s really surprising that we found is that resources alone are not sufficient. So, resources do not compensate for deficits in the care environment. This is really apparent when we examine the case of the left behind children in China. In China, like in many other countries, parents often migrate from rural areas to urban areas for work. And often these children are left behind in the care of other relatives. They, on average, see their parents zero times in a typical week. When we look at these children, again, we can follow these children over time, we see that these left behind children do benefit economically from this migration. So, their homes do have higher household income. But what we also find is that the human capital of these children really suffers when they are not with their parents. So, they have much lower scores in mathematics, they have much lower scores in vocabulary, and they also are much more likely to report that they are depressed. What does this mean for policy? Of course, we need to increase the resources in homes so parents can invest in their children’s human capital. And we have evidence from around the world that you can, through cash transfer programs and job programs targeting for families, increase the amount of human capital investments parents make in their children. But what has been missing from policy is this idea that we can affect the care environments of children. And here, again, we have evidence from around the world that there are programs that can give parents the tools to stimulate their children and engage in very positive forms of behavior management, all of which have lifelong impacts in terms of the human capital that these children will build. And so now, if we go to the neighborhood, as Norbert mentioned, the neighborhood has many influences on human capital. So, children and families tend to use the services that are in their neighborhoods. And so, if there are no good services in your neighborhood, your human capital is going to suffer. But what is also coming up in the literature is the effect of other attributes of the neighborhood that are important. The pollution in the neighborhood, the quality of water, social cohesion, or the prevalence of violence, these all impinge on human capital as well. And just to give you the magnitude of this. Here, again, we have data from Brazil, where we can follow children over time. And we see that a low-income child who grows up in a low-income neighborhood, as an adult, will only earn half as much as a low-income child growing up in a high-income neighborhood. And to see what this neighborhood lens implies for policy, I will pass it on to my colleague, Joana. Thank you.
[Joana Silva]
Thank you, Alaka. So, neighborhoods play a key role in people’s productivity and well-being, as my colleagues just said. Now, let’s think about which policies we can implement to maximize this potential. First, we saw that policies implemented the same way everywhere, they still leave gaps behind. So that’s why first we need to think about filling these gaps. It’s really important for this to improve public services in struggling neighborhoods. This can be done by incentivizing and equipping local governments to fill these gaps. Second, it’s really important to bring together different sectors like Paschal just highlighted. And neighborhood lenses, in these cases, are key. When we were doing the consultations around the world for this report, we discussed a very interesting fact. Imagine that you are a child and you want to go to school, or you are a worker and you’re going to go to your workplace. If there is violence in the street, you cannot make it. So, to increase education, or to increase skill development, you do need to work together between public security, for example, and education, and make the goal of increasing education or skill development a shared goal between them. Let’s talk about workplaces and making it a more active role, making them have a more active role in the skill development of people. People often think about a workplace as a place where you use your skills, but workplaces are also places where you should build your skills. This can be done through practice. As you work, you become better at your job. You can also become better by interacting more with technology or with good peers and managers. The skills that you acquire through these routes are really, really important. However, what we show in the report is evidence that in low-income countries and in middle-income countries, we see that the extent to which these skills could be nurtured at work is not occurring as we would like to see. And so, first, why is that? First, this occurs because of this. So, you must be employed to gain skills at work. And what we saw when we look at international evidence is that one in every five youth are neither working nor studying. In addition, what we saw was that in low- and middle-income countries, 50% of the women, half, are out of the labor force. To the extent that accumulating skills at work is important, this is a missed opportunity. Second, you also need to learn more at your current job. The issue here that we saw, that we comment on in the report is that about 70% of the people in the world, of the workers, are in low-learning jobs. What are these low learning jobs? It’s low-quality self-employment as farming in very small plots or in very, very small farms. They accumulate less learning than they would be in case they would be in different jobs, in high learning jobs. How do we see this? We look at wage age profiles around the world for wage workers versus self-employed, and the evidence is quite striking. An additional year of experience brings you only half as much as the gain in wage for a self-employed than it would be as a wage worker. This should make us reflect. So, what can be done in terms of policies? Three things can be done. One is this policy is to get more people into jobs, those that are facing barriers, eliminate these barriers. Second is to have more on the job learning in current jobs. And third is to have economies that by themselves create more jobs with this high learning potential. So, what can we do? For getting more people into jobs, for using job matching and apprenticeships are essential. In apprenticeships, for example, evidence from around the world is clear. They increase income, but also learning amount use. For women, it is very important (to make) investments in childcare. They ensure a safe commute to work. These are proven in the world, and we show evidence that they increase human capital formation and participation in the workforce. And for on-the-job learning to be higher, we need to think about the private sector, and incentivize firms to invest more in on-the-job learning. And finally, for the economy to produce more of these jobs, we need to help them, help the economy through firm growth policies and education expansion that provides the talent that firms need to grow and to generate a virtuous circle where you have more human capital, better firms that create more high-skilled jobs and then better skill development at work, stronger local economies, and more income for families. And I’ll pass it now to Norbert to wrap it up. Thank you.
[Norbert Schady]
I just want to close. I want to close with three thoughts. The first of these thoughts is that we can make a difference, but we need to be able to measure what we’re doing and what effect it’s having. Right now, often we are not doing that. So parallel to this agenda to do something, there’s an agenda to measure things and act accordingly, to be able to design policies intelligently. And very often that is not happening. Second, I want to say that this integration of policies and programs is really an important message. And I want to give you a reflection that happened while we were discussing the report in Brazil. So, I went along to a meeting with a sector of education in the city of Rio. It’s a big city, as you know, with a huge education sector. And we had a conversation about this and that. And then I asked the minister or secretary, “Madam Secretary, what is the biggest challenge you face to improve education levels?” And I was expecting her to say, my classrooms are terrible. The textbooks never arrive on time. Teachers don’t show up. You know what she said? She said, “Violence outside schools.” Kids can’t come to school because of the levels of violence around the school. Now, this is not to say that this is the only determinant, but it really opened my eyes. We can’t just think narrowly when we think about human capital investments. And the final reflection I want to share is that we can make a big difference. All of us can make a big difference. There are countries that have really made huge progress in investments in human capital. Rwanda outperforms countries with vastly higher income levels in terms of their human capital, Rwanda’s human capital. Chile increased female labor force participation by 15 percentage points over about 20 years. These things can be changed. Peru increased learning levels dramatically. Indonesia reduced stunting dramatically. So, what I showed you at the beginning, these levels of stagnation and these levels of decline, this isn’t our necessary destiny. It is our destiny if we don’t buckle up and do something about it, but we can. We can, and we’re here at the World Bank together with all of our partners to figure out how best to do this. And the report and the index we hope, is a step in that direction. Thank you very much.
[Lana Wong]
Thank you so much, Norbert, Joana, Alaka, and your team for that incredible piece of work and that rousing call to action that despite the sobering statistics, there is plenty we can do. In any conversation about building human capital, we really cannot leave out the voices of youth. They are really at the center of this because their future depends on it. So, we put out a global youth video call and asked young people to tell us how their homes, neighborhoods, and work shape their future. We received more than 200 entries from young people across 52 countries and want to share the winning story now. Check out more winners on the Human Capital Report website, worldbank.org/humancapitalreport. Let’s hear from our winner.
[Wisdom Lebechi]
Hi. My name is Wisdom, and this is my home. Before classrooms, before offices, before policies, human capital begins at home. This is where I learned my first skills. In the kitchen, measuring, timing, patience, and confidence. Every movement taught by watching, trying, and being encouraged. In our backyard, I learned responsibility. Caring for my chickens taught me consistency, observation, and empathy, how daily actions shape living things. This is where my love for the environment began. Planting my first tree, I understood that protecting our climate is not abstract. It starts with personal responsibility. My home didn’t just shelter me. It shaped my skills, my values, and my purpose. If we want to build human capital, we must start where life begins, at home.
[Lana Wong]
Congratulations to 18-year-old Wisdom Lebechi from Nigeria. And thank you for your words of wisdom in that last line. “If we want to build human capital, we must start where life begins, at home.” We can’t agree more in this room and with the authors of the report as we’re shining a light on the critical ways that homes, workplaces, and neighborhoods shape our human capital. So, on that note, let me invite our esteemed panelists to the stage so we can dig into this and explore ways that we can really translate the important messages in this report into action on the ground. Great. So, thank you all for joining us. Please, let me introduce to my left, Her Excellency Dr. Haja (Ramatulai) Wurie. She’s a distinguished academic and researcher who is now shaping the next generation in Sierra Leone as Minister for Technical and Higher Education. And next to her, Dr. Joanna Mucha, who is an economist, an educator, and Member of Parliament in Poland, who previously served as Deputy Minister of National Education and Minister of Sport and Tourism. Next, we have Dr. Angela Jackson, a Harvard lecturer, a New York Times best-selling author on human capital in the workplace and CEO of Future Forward Strategies. And last but not least, Dr. Dana Suskind, a professor of surgery and pediatrics, a pioneering thinker on investing in early childhood, and Co-Director of the TMW Center for Early Learning and Public Health at the University of Chicago. Thank you all for joining us. And so, to help frame our discussion, I’d like to share something that you, Minister Wurie, Haja, brought up during our prep call. You challenged us very gently with a simple question. You said, “So what?” She meant that in the kindest way to say that we’ve got this incredible research and report and evidence, but what comes next? What can we do to really make this feel like we can translate this into action tomorrow? So, I’d like to turn to you with that question from your experience with Sierra Leone. What does it take to move these big ideas about human capital into real results on the ground?
[Haja Ramatulai Wurie]
Thank you very much. And good morning, ladies and gentlemen. Thank you to the World Bank Group for inviting me to share my perspective, but also to learn from fellow panelists. And being a researcher myself, the question of “so what” is something I constantly asked myself when I was actively involved in research. And reading the report, I think what clearly stood out was that moving from ambition to impact in human capital requires three critical factors for us to consider. Three fundamental shifts. One, broadening who we involve. Two, redefining what we invest in. And finally, changing how the government works. So, let me focus on the “who.” The one that was very clear from the report is that skills or human capital, goes beyond education. It’s a product of your environment, and it’s a product of the workplace as well. So, a young person’s ability to thrive within my space, technical and higher education depends on nutrition, depends on health. And the Minister of Health in Syria often says that human capital starts from when the baby is in his or her mother’s tummy. What are the health outcomes of that mother? What is the health status of that mother? And in Sierra Leone, what we have done for basic education is to remove the financial barrier, but also provide school feeding to try to address that problem. Safety, as we’ve heard from other panelists, you are a product of your environment. How do we ensure that your environment is safe? How do we ensure that we put policies in place to support social cohesion? Electricity, connectivity, these are all basic things in most countries, but in a low-resource setting like Sierra Leone, it’s an ongoing challenge, and in combination with other things, it helps to create that enabling learning environment. And whether or not at the end of it, or whether or not you have jobs, what is the labor market? And how do you transition into that? So, the second is the “what.” And in Sierra Leone, we’re gradually moving away from the focus on credentials, getting a degree, as opposed to competency-based learning. How do we ensure that we revise curriculum with the labor market so there’s no mismatch? We train in a demand-driven approach. How do we bring industry partnerships into the way we do things? And these are equitable partnerships for obvious reasons. And how do we reform TVET, which is where we build the middleman power? Everything I’ve said so far is very much focused on the formal education pathway. But how do we also ensure that those in the informal space who have acquired skills, how do we recognize that? How do we upskill them? How do we certify that? And we have a policy called Recognition of Prior Learning. And back to industry partnerships, we have the Dual Apprenticeship Policy, which does exactly as it says on the TVET. And finally, how do we work? We have to ensure that we do not work in silos. We can all agree that we’re currently in a very difficult time where the donor market is not as it used to be. So, how do we ensure that we do not duplicate effort? How do we work in collaboration with other ministries? And that’s exactly what we’re doing in Sierra Leone. Working on the skills for job agenda with support from the World Bank. We’re currently developing a country partnership framework that puts skills development at the center of that, identifying growth sectors as defined by our medium-term National Development Plan. So, agriculture which is our flagship program, energy, tourism, and so on and so forth, but with skills at the center of all of this. So for me, this report, reading this report, as a policymaker, but also as a researcher, it helps me to pause, but also to reflect on the journey, what we have done so far, what are the lessons learned from Sierra Leone, what are the lessons learned from the other countries represented in the report, and how do we use that through the lens of not working in silos, taking into account human capital development in its entirety, and using of that to raise the bar. Thank you.
[Lana Wong]
Great. Thank you, Haja. If we can move from Africa to Europe with Joanna. Poland had to build human capital quickly across an entire generation as the economy transitioned. How can countries facing rapid economic transitions adopt solutions from the new report?
[Joanna Mucha]
Thank you for having me. Thank you for the invitation. I must say at the beginning that this report is extremely important and extremely interesting. And yes, from my point of view, from a Polish point of view, building human capital at this extreme pace as we experience in Poland, is really something very special. This is only one generation. This is my generation. This is my life. And I experienced a huge change in what is happening in Poland. In Poland, we know that we belong to the Western world, so we wanted to catch up. We do not have oil, we do not have international firms. So, all we had was our people, very hardworking, very well-educated. I must tell you, after this time of transition, that what is really extremely important, is that there is a trade-off between this catching up and mental health stability. And what I want to focus on is all of those mental health issues which are extremely important, they are mentioned in your report, but I would like to add a few things because you said that we have to measure, but we have to know what to measure. At the moment, we are trying to measure how we are coping with mental health issues. I mean, depression, burnout, I mean, isolation, I mean, insomnia, and so on. I think we’ve got to make a huge shift from how to measure between coping with mental issues to preventing mental issues. Alaka, she was talking about children left behind. We are talking about different types of families. We are talking about the presence or absence of mothers and fathers. And being at the same point or subject, being at the mental health issue, I would ask a question about the presence or absence, (whether it is) physical or mental and emotional. In the age of addiction, digital addiction, it is extremely important if the parent is present or absent in a way of being with a child or not being with a child emotionally and mentally, because we have tons of research about parents who do not care about the children because they care about their telephone. At the moment, I think the mental health issues are the most important. We are chasing our own tail, not thinking about prevention, about these mental health issues. To answer your question with only one sentence, balancing growth and long-time resilience. This is the most important (aspect) in my view. Thank you.
[Lana Wong]
Thank you, Joanna. Your point about mental health and prevention actually is a great segue to speaking to Dana, whose own remarkable journey from making a difference in children’s lives as a surgeon to now thinking about how societies invest in early education is really, I think, a good link to make. So, what changed the course of your life? And how did this impact your views on how we should invest in people?
[Dana Suskind]
First of all, thank you so much for allowing me to be part of such an esteemed group. And this World Bank report couldn’t be more important and couldn’t come at a more important time. So, the truth is, I’m a pediatric surgeon, a pediatric cochlear implant surgeon, to be clear. And my own journey, I think, really reflects the story of the World Bank’s report that unless you invest in the human capital of those taking care of children, all the capital in the world won’t change things. So, a cochlear implant, as many of you all know, is an amazing piece of technology that allows a child born deaf to hear, to talk, to mainstream, educationally and socially. And long ago, when I started the pediatric cochlear implant program at the University of Chicago, I started implanting all of these wonderful children who had been born deaf with parents who all loved them equally. But what happened after the implant was placed, after I had done the surgery, was dramatic and eye-opening. I implanted these kids who looked like they all had the same potential to talk and learn, but pretty soon after implantation, I started noticing profound differences in their outcomes. So, some of the children would be talking and learning on par with their hearing peers, and others, same time out, would barely be able to communicate. And it was a very eye-opening, dramatic thing to see because it wasn’t with children who are born deaf, it’s not, oh, their vocabulary is delayed. It’s dramatic. They’re not able to communicate. And in my journey in trying to understand why this was, and more importantly, what I could do about it; surgeons don’t learn about child development or the importance of human capital investment. I started understanding how important the early language environments were, and particularly how important the parents and caregivers were for investing in children, that the real difference wasn’t the surgery or wasn’t the 100,000 dollars piece of equipment that I had put into their ear, but rather the richness of the early language environment. And similar to my own learning, that understanding that what I was seeing in my deaf patients really mirrored the population at large, mirrored the World Bank report, that more resources are critically important, but also investment in the home, in families is really what makes the difference. And I’m just going to add a little neuroscience behind it because I think it’s important to understand. In those first three to five years of life, 90% of the physical brain is built, and it is built by nurturing interaction. So, when we talk about the difficulty in catching up, you have to understand that those early years are building the brain. I think of it as a computer hard drive. You build the hard drive, the memory, the RAM, everything else is software updates. So, it makes (it) clear why we need to invest so heavily early on. Genes give us our potential, but those early years allow us to fulfill the potential. So, this is an incredibly important report, because without this type of investment, we can’t see the change that we want.
[Lana Wong]
Thank you so much, Dana. Last but not least, if we can hear from Angela and look at the workplace, your best-selling book, The Win-Win Workplace, uncovers best practice investments in people that businesses can make in the workplace. Unfortunately, not everyone has access to the opportunities that these investments provide. How can we build more inclusive workplaces so everyone benefits? How can the public sector incentivize this?
[Angela Jackson]
First of all, thank you. Thank you for having me. For over a decade, I’ve researched how firms are investing in their human capital from entry level to their highest wage earners and really understanding how does work as a lever really have shifts in people’s lives. One thing that you see that many times, I’ve looked at over 1,700 firms to date, that many people could not measure the impact of those investments in talent on their bottom line. By and large, when people thought about investments in talent, they thought of them as the thing that maybe we do to incentivize top wage earners. If you think about most firms, they’re spending about 80% of their professional development dollars on their highest wage earners. But when we step back and look at the role of work and the investments in human capital, they can have an outsized impact on a company’s bottom line. My research looks at how do we make the economic case for investing in people at all levels of the organization. The second thing that we look at, and the report brought this in sharp belief. What are the interactions that home, the neighborhood, and where you work impact one’s ability to actually be engaged at work? I want to just bring this a bit clearer. What we saw was where a person lives determines what types of access that they will have to jobs, what types of access that they will then have in terms of skill building. If you look at workers globally, 70% of them, upwards, think that they are going to learn their next skill on the job. And by and large, that’s not happening in many workplaces. So, that’s a missed opportunity. The second thing we look at are the neighborhoods. How are we thinking about how we build talent from the neighborhoods versus how we use talent from the neighborhoods? So, a couple of things that we saw in that regard, and I saw this through my research, there were certain companies that really centered a place-based approach. We’re doing this here in the States, in Ohio, where they said, “We’re going to go in this community, and we’re going to make sure that we invest in the neighborhood so that we can grow our own talent that can then work in our companies.” What those companies who’ve seen that and have done this is that they have lower talent costs. They have higher retention. They have lower turnover. These are key metrics that make a material difference in the life of a business. But unless we’re actually measuring these things, we don’t know where these benefits happen. That’s why we look at the third place is the actual, that the report says, the workplace in itself. How someone is treated at work, regardless of their position, determines how their children will do and (their) skill. When my colleagues talk about one’s job and what’s happening at home, it’s not surprising to me at all. Because the role that someone has at work, we can talk about if they’re a janitor or if they’re an executive, if they’re talking to their children, if they’re reading to their children, if they feel like they have the capacity and bandwidth to invest, we see better outcomes, not only for them, but also for their children. And so, what I try to bring to bear in The Win-Win Workplace is, yes, we do these things because it’s a moral thing to do, and it’s the right thing to do. But we’ll end where Paschal said, it’s also the economic way to do this, to build systems where we’re accounting for the interactions between home, the neighborhood, and work.
[Lana Wong]
Great. Thank you. We are running short on time, but we don’t want to abandon this amazing opportunity. I think if it’s okay, we’ll proceed with our second round of questions and just try and make them tight if possible. But we want to learn from your expertise. So, Haja, what needs to change? So, I’m so sorry. Yes. I am so sorry. I’ve lost my space here. Yes. So, what needs to change so everyone can realize their full potential?
[Haja Ramatulai Wurie]
Thank you very much. I’ll frame this through the gender lens. And one of the most important messages for me in the report is that unequal opportunities between men and women remains one of the biggest challenges for us to achieve human capital at country level. Again, if you look at it through the lens of what happens in the home, in your workplace, and so on. And in most cases, for example, I speak from the experience of Sierra Leone, we have harmful gender norms that would affect a young woman. And it goes beyond the education space from within the community, from the home, where often caregiving rules are given to the female, and that shapes their thinking. When they go into the community, the issue of safety and so on and so forth, that would again limit their chances of accessing opportunities. And that creates a path dependency that makes them believe that certain opportunities can only be given to their male counterparts. So, we have recognized that at country level. And I say within the Ministry, everything we do, we do it through the gender equality, social justice and inclusivity lens. And what do I mean by that? We’re very deliberate to ensure that we challenge some of these harmful gender norms, but at the same time working in alignment with national policy. For example, at national level, we have the Gender Equality and Women’s Empowerment Act, which says, amongst other things, that you should have 30% female representation in leadership positions. And we know that certain sectors, mainly the growth sectors, are historically dominated by men. So, to ensure that we do not pay lip service to this in the future, we have to start acting now and be proactive and create space for young women to be able to get the skills within those sectors and have the opportunity or the chance to take up leadership positions in the future. So, what we have done, a local grant in aid policy that we have, a local scholarship, we have redefined the target beneficiaries to include female students studying in these growth sectors that are historically dominated by men, giving them the opportunity to be able to take up these leadership positions in the future. And the other thing we’re very deliberate about is ensuring that women, even within the technical skills training space, that we are very deliberate to recruit women within these spaces. For example, we recently launched a Center of Excellence for Automotive Training. We can all agree in my country, for example, when you go to the car, the mechanics, it’s all men. So, what we have done within that space is to be very deliberate to recruit women, and that’s something we’ll do across the board, to get more women within these spaces so that we can challenge some of these harmful gender norms and change the narrative moving forward to ensure that there are equal opportunities when it comes to human capital development, regardless of your gender. Thank you.
[Lana Wong]
Thank you. So, if we can move quickly to Joanna and continue on the women and youth piece and the workforce. What can we do to get more women and youth in the workforce?
[Joanna Mucha]
The very straightforward answer would be to be flexible at work policies, to deliver childcare support to deliver educational programs, inclusive labor market practices and incentives, redesigning work-life harmony. I mean, flexible hours, remote options, child networks, and reward companies, and also institutions to embrace diversity, mentioning inclusive promotion. But I would like to look at this issue a bit broader because I was listening to Melissa Kearney here in the World Bank. She was talking about demographic issues, and she was talking about (the fact) that raising children at the moment is extremely resource-intensive. We need money, we need time, we need all this money for schools, additional courses, extracurricular activities. We are at the moment that families are choosing to have fewer children because of this resource intensive process of raising children. At the moment, we’ve got to ask the question, what do we want to achieve? Because we’ve got two goals. We’ve got this demographic goal, and we’ve got this human capital goal. We’ve got to see that there is a kind of trade-off between all those. So, flexible policies are probably the most important to address both of them. Thank you.
[Lana Wong]
Great. Thank you. Moving on to you, Angela. We’ve had a lot of doom and gloom a bit on the stats, but we want to hear some optimism. What are some hopeful solutions that you’ve seen for human capital?
[Angela Jackson]
The biggest is just… Well, I’ll start where I ended before, the workplace. There’s a tremendous opportunity there when we think around skill building. We think if we can get people attached to the labor force and that we can incentivize and reward employers who are thinking about building deep talent benches. We’re thinking about skilling people at all levels. We’re seeing the promises we saw in the report around things like apprenticeships. What’s happening in sub-Saharan Africa, also what’s happening here with the States, as we have fewer and fewer entry-level jobs. How will people learn new skills? It’s going to be on the job. The second thing we’re seeing is more and more employers are thinking about for someone to be able to show up at work. What else needs to be true? We’re seeing employers starting to think about housing. They’re thinking about benefits in addition to childcare, elderly child caregiving. We have a five-generation workplace. So, the more that we consider employers to really think about what those benefits can look like, and they’re thinking about skilling their people, we can really see that significant change.
[Lana Wong]
Fantastic, thank you. And onto you, Dana, for a lightning round on why do we need to care for the caregivers?
[Dana Suskind]
I think the bottom line is that parents and caregivers build society. They build the next generation of doctors, lawyers, teachers, farmers. They build our society. And the bottom line is caregiving is the ultimate infrastructure investment. It is a force multiplier. Not only does it impact that child, and as we talked about, their long-term trajectory, but it invests in the human capital of the adult in their world. Caregiving, and I’m going to be really tight, is the key to the future. Now with AI, everything else is going to be able to be replicated at scale. The one thing that AI can’t do quite yet is care, and that is the human edge that we need to lean into. And the good news is that it’ll make the difference that we want to see in the next report for the World Bank. So, thank you.
[Lana Wong]
Great. Thank you so much. That beautiful note. Thank you to our wonderful panelists and to the care and also for really putting the human in human capital in this conversation. I think that’s a critical takeaway. And so, to close this out, if I could please introduce the World Bank Group Vice President, Mamta Murthi, for our closing remarks. Thank you.
[Mamta Murthi]
Thank you, Lana, and thank you to our excellent panelists for what I thought was an amazingly rich discussion. It’s my responsibility to close us out now after this wonderful hour that we have spent talking about our new Human Capital Report. It’s the first one we have done in seven years. So, it is an incredible source of pride for the team and for everybody who works on these issues. We also are launching our Human Capital Index Plus. Again, this is a huge source of pride for us. We launched the first index seven years ago, and at that point in time, we were told we were missing a critical element, which is human capital development at work. And I am absolutely delighted, honored, proud, and grateful to the team that we are at this moment where we have expanded the index and are able to cover the life cycle. Because I’m closing out this meeting, there are some things that I need to say that I hope people will remember. There are things that you may have heard already, but they’re worth reinforcing. The first is that human capital is the fundamental source of prosperity, and it’s something we should not forget ever. At a point of time when there’s a lot changing in the world, it’s very easy to lose sight of human capital, but we can’t really talk about the green revolution, and prosperity for all, and all the rest without investing in human capital. The second thing I want you to remember is that we’re not doing terribly well when it comes to building human capital. There has been progress. Don’t go away with the message that there’s been a secular decline. There has been progress, but it’s been stalling in the past 15 to 20 years, and the stalling predates COVID. And so, it forces us to think, well, what’s going wrong? The third thing I want you to take away is that there’s been an explosion of academic literature, well-evaluated policy experiments, and government, and private sector, and civil society initiatives. And they are all pointing to the fact that we need to broaden our lens, our aperture, as we think about human capital, and we need to bring in settings into the equation. And that’s what this report is trying to do. And when we think about settings, what is so valuable about them? Well, it forces us to think about a wider range of actors. That’s the first thing that it does. The second thing that it does is it makes us aware of other dimensions that we are perhaps not focusing enough on. And Angela made the point very well. We’re not really thinking about employment and employers as something that is very important to human capital development. Or for that matter, we’re not thinking sufficiently about the home. And certainly, we need to think about the neighborhood. So, there’s a wider range of actors, and there are these blind spots that we need to cover. And I think the final thing that the settings lens makes us think about is the wider range of actors, but how do we get to them? How do we get to them? How do we bring them into the picture? How do we think differently of what we do and how we do it? I think Haja said it very well. She said we have to think about what we do and the role of the state. We need to think about how governments deliver services and what else needs to be done in terms of making these services more effective. So, please read the report. I know it’s a bit long, but it’s really invaluable to spend the time reading it. Please, engage with us. This is not a report where we launch and then it’s over. This is a report that we’re going to continue to talk about, to develop the implications of, to think through what it means for the technical work that we do, for the lending that we do, please, engage with us. Please, be a part of this partnership, this coalition, so that we can make a difference. Thank you very much.
