Population, education and human capital
The most malleable factor of production available to any economy is its population. Our consideration of endogenous growth theories in Chapter 8 and of the recent success of structural transformation of the so-called “high performance East Asian economies” (HPAEs) in Chapters 9 and 10 has highlighted the importance of an educated labor force to economic growth. Education is the means by which a nation is able to appropriate from and share in the gains arising from technological advances at the world level. A sufficiently educated labor force would seem to be absolutely necessary for sustained growth and for achieving full human development; even a nation that succeeds in avoiding all the other pitfalls of developing societies considered in the next part of the book but which neglects education will not succeed in developing as quickly or to such a high level as would be possible with more and better human capital.