Human capital & the age of change: Constantin Gurdgiev at TEDxDublin

Summary

The speaker discusses the profound transformation towards a human-centric economic and governance system, emphasizing the evolution of human capital from traditional educational and work experience metrics to more individualized attributes like creativity, innovation, and social skills. They highlight the shift in global human capital flows, the importance of attracting and retaining talent, and the emergence of a new economy where technology serves human capital, not the other way around. The future challenges the status quo, requiring a supportive infrastructure for human capital growth and retention.

Takeaways

• 🌟 The speaker discusses a profound transformation in human capital, emphasizing a shift towards human-centric systems in economic governance and production.
• 📚 Human capital is traditionally defined by tangibles like education and skills, but has evolved to include intangibles such as creativity, innovation capacity, and social-emotional skills.
• 🌐 The speaker's personal journey illustrates the shift from a narrow technical expertise to a broader, more adaptable set of skills, reflecting global patterns of human capital flow.
• 🔄 There's a change in the geographic distribution of human capital, with increased movement within and from 'southern' economies, and a reversal of traditional northward flows.
• 🏆 Ireland is highlighted as an economy that attracts and exports human capital, but struggles with retention, underscoring the importance of the distinction between attraction and retention.
• 🎓 Education systems are evolving, with a shift from MBAs to MFAs indicating a broadening scope of education, although still within a structured framework.
• 💡 The future of education is envisioned as enabling creativity and innovation, focusing on intrapreneurship and managing uncertainty, rather than just imparting knowledge.
• 📊 The speaker predicts a decentralization of decision-making and production processes, with technology serving as an enabler for human capital rather than a substitute.
• 🌐 The age of big data is giving way to an age of 'small data', focusing on granular, individual consumer understanding, moving away from treating people as mere data points.
• 📉 The diminishing role of physical and financial capital is observed, with a decline in the importance of technological investment as a growth contributor.
• 🚀 The future challenges the status quo, requiring new services, policies, and institutions that prioritize the care and nurturing of human capital across all economic structures.

Q & A

What is the main topic of the speaker's discussion?

The main topic is the transformation towards a human-centric economic, governance, and production system, and how this change impacts the concept of human capital.

What does the speaker mean by 'human-centric systems'?

Human-centric systems refer to economic and governance structures that prioritize human needs and abilities over machine-centric approaches.

How has the definition of human capital evolved over time according to the speaker?

The definition of human capital has evolved from tangible factors like education and work experience to more intangible qualities such as creativity, innovation capacity, and social and emotional skills.

What is the significance of the shift from MBAs to MFAs in the speaker's alma mater?

The shift signifies a broadening of the educational scope, moving away from narrow technical skills towards a more holistic and creative approach to education.

What does the speaker suggest about the future of education in relation to human capital?

The speaker suggests that education will become more about enabling creativity and innovation, focusing on skills that allow individuals to manage uncertainty and exploit opportunities.

How is the geographic distribution of human capital changing, as mentioned in the script?

The geographic distribution of human capital is changing with increased flows within the so-called 'South' economies and a reversal of traditional flows, with talent moving from the 'North' to emerging economies.

What is the speaker's view on the role of technology in the future economy?

The speaker believes that technology will become an enabler of human capital rather than a substitute, leading to a more decentralized and human-centric economy.

What is the importance of the distinction between attracting and retaining human capital, as discussed by the speaker?

The distinction is crucial because while attracting talent is important, the ability to retain that talent is what truly drives an economy's growth and innovation.

How does the speaker describe the transition from the age of machines to the age of technology?

The transition involves a shift from physical, tangible machines to more abstract, disembodied technology that empowers individuals rather than replacing human labor.

What challenges does the speaker foresee for the future economy?

The speaker foresees challenges in providing the right services, policies, and institutions that support and nurture human capital, as well as adapting to a more decentralized and innovative economy.

What changes does the speaker predict for the private sector in response to the human capital-centric economy?

The private sector will need to change from hierarchical structures to more horizontal, enabling environments that foster creativity and risk-taking among employees, with changes in ownership and intellectual property concepts.

Outlines

00:00

🌐 Human-Centric Economic Transformation

The speaker introduces the concept of a human-centric economic and governance system, emphasizing the shift from machine-centric to human-centric models. The discussion begins with the definition of human capital, evolving from traditional measures like education and skills to more intangible attributes such as creativity, innovation, and social skills. The speaker shares personal experiences of this evolution, highlighting the changing nature of expertise and the global movement of human capital. The narrative points to a future where human capital is more significant than technological investment, with a focus on individual talents and entrepreneurial abilities.

05:01

🎓 Shifts in Human Capital Formation and Education

This paragraph delves into the transformation of human capital creation, particularly through the education system. The speaker notes a shift from the popularity of MBA degrees to MFA degrees, indicating a broadening scope of education. The focus is on the emergence of a diverse mosaic of knowledge and skills that enable creativity and innovation. The paragraph also touches on the need for education systems to foster intrapreneurship and risk management, preparing individuals to embrace uncertainty as opportunity. The speaker suggests that the future of education will be less about specific degrees and more about empowering individuals to innovate and adapt.

10:02

🔄 The Changing Landscape of Production and Consumption

The speaker discusses the blurring lines between producers and consumers, driven by technological advancements like 3D printing. This shift leads to a decentralization of decision-making and production processes, distributing risks across various entities. The importance of big data diminishes in favor of 'small data,' which offers a granular understanding of individual consumers. The speaker also addresses the decline in the significance of physical and financial capital, with a rise in the importance of human capital productivity. The paragraph highlights the changing contributions of different factors of production to economic growth, with a noted flattening of returns to capital and a rise in creative industries.

15:04

🛠️ The Future of Private and Public Sectors in Human Capital-Centric Economy

In the final paragraph, the speaker outlines the profound changes expected in the private and public sectors due to the rise of human capital-centric growth. The private sector must evolve from hierarchical structures to horizontal, enabling environments that foster employee creativity and risk-taking. The speaker suggests that ownership and intellectual property concepts will need to adapt to rapid innovation, with management roles transforming into supportive rather than directive functions. Although the public sector discussion is brief, the speaker emphasizes the need for services, policies, and institutions that nurture human capital, reflecting the necessity for societal and structural adaptation to these economic shifts.

Keywords

💡Human Capital

Human Capital refers to the skills, knowledge, and experience possessed by individuals that contribute to an economy's productive capacity. In the video's context, it is the central focus of the economic and social transformation being discussed, shifting from a machine-centric to a human-centric system. The script mentions how the definition of human capital has evolved from tangible educational attainment and skills to more intangible qualities like creativity and social skills.

💡Innovation

Innovation is the process of translating an idea or invention into a good or service that creates value or for which customers will pay. The video emphasizes the importance of innovation in the new economy, suggesting that human capital's innovative capacity is a key driver of economic growth and a significant aspect of personal and professional development.

💡Risk Management

Risk management is the identification, evaluation, and prioritization of risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events. The script discusses how the future economy will involve a shift from enterprise-centric risk concentration to a more distributed model, with technology enabling better risk management at an individual level.

💡Intrapreneurship

Intrapreneurship is the concept of employees within a company acting like entrepreneurs, taking on projects that are innovative and risky, but within the company's structure. The video suggests that intrapreneurship will become increasingly important as part of the human capital's skill set, blending entrepreneurial activities with everyday work.

💡Social and Emotional Skills

Social and emotional skills are the abilities to interact effectively with others, show empathy, form networks, and manage interpersonal relationships. The script highlights these skills as a growing component of human capital, critical for leadership and collaboration in the evolving economy.

💡Human-Centric Economy

A human-centric economy is one that prioritizes the well-being, creativity, and potential of human beings over machines or technology. The video discusses this as a profound transformation, moving away from traditional economic models to ones that are centered on enhancing and utilizing human capabilities.

💡Geographic Distribution of Human Capital

This refers to how human capital is spread across different geographical locations and how it moves from one place to another. The script mentions a shift in patterns, with increased flows within and between southern economies and a reversal of traditional north-south flows.

💡Total Factor Productivity

Total factor productivity (TFP) is a measure of the efficiency with which an economy uses its resources to produce goods and services. The video notes an acceleration in TFP growth related to human capital, indicating that the efficiency of human resources is becoming more critical than physical or technological investments.

💡Debt Crisis

A debt crisis occurs when an entity has high levels of debt relative to its ability to pay it off. The script refers to the current situation as the 'biggest epicenter of the debt crisis,' suggesting that the transition from a leveraged economy to a human capital-centric one is a significant factor in the current economic challenges.

💡Creative Industries

Creative industries are sectors that have their basis in individual creativity, skill, and talent, typically involving the creation of intellectual property. The video points out the increasing contribution of creative industries to GDP growth, reflecting a shift towards economies that value innovation and originality.

💡Uncertainty Management

Uncertainty management involves the processes and strategies used to deal with unpredictable or unknown elements in business or economic activities. The script suggests that the future will involve mining uncertainty for opportunities, indicating a shift towards embracing and leveraging unpredictability rather than avoiding it.

Highlights

Introduction to the transformation towards human-centric economic systems.

Defining human capital beyond traditional metrics to include creativity, innovative capacity, and risk attitudes.

The shift from formal education and technical skills to individualized human dimensions in human capital.

Emergence of social and emotional skills as important factors in human capital.

The changing global pattern of human capital flows, with more mobility within and from emerging economies.

Ireland's unique position in attracting and retaining human capital, highlighting its challenges.

The evolution of educational priorities from MBAs to broader degrees like MFAs.

Future of education focusing on enabling creativity and skills-based innovation.

The transition from risk management to uncertainty management in the economy.

Historical progression through ages of economic focus: land, construction, machinery, technology.

Upcoming era where technology empowers human capital rather than displacing it.

Merging of producer and consumer roles, leading to decentralized decision-making.

Decline in the importance of physical capital and technological investment in advanced economies.

Emerging markets following similar patterns of growth, emphasizing innovation and creativity.

The future focus on services and policies supporting human capital rather than physical infrastructure.

Transformation in private sector structures to enable creativity and risk-taking among employees.

Changes in intellectual property concepts and management roles in firms.

Anticipation of profound changes in public sector to support human capital-intensive growth.

Closing emphasis on the need to adapt to the upcoming human capital-centric economic future.

Transcripts

thank you very much for coming to listen

to me I will take the next 15 minutes to

talk to you about something that is

close to your skin close to my skin

close to the future of our generation

and generations to come close to our

children's future and the future of

their children as well this is a

transformation that we are starting to

experience today so on a cusp of this

change some of it is present already now

everyday life and some wood is yet to

come

there is a profound transformation it's

the first time Humanity is moving

towards the systems of both economic

governance and economic production which

are human centric rather than machine

centric let me walk with you through

this journey very briefly so what the

hell is human about human capital to

begin with well we started defining

human capital we as an economist in the

society by very tangible definitions

which are hardly human really in their

nature first of all we looked at the

educational attainment and formal

education and skills both of those are

embedded in terms of the years and the

jobs years and education types of

education achieve indifferent towards we

later added things like work experience

that's how long we stayed in a

particular position and that somehow was

reflective of our human capital our

ability our potential as well later we

added less tangible things such as

aptitude to work attitude to work things

like that over the recent years we

started shifting towards more

individualized more human dimension of

human capital we started measuring and

started trying to reflect in our

assessment of human capital things like

creativity things like innovative

capacity of workers and individuals

things like risk attitudes attitudes

towards risk attitudes towards

interpreter ship abilities to manage

risk abilities to manage different forms

of enterpreneurship blend

intrapreneurship with everyday work and

so forth things are becoming very

complex here and very much not

measurable something very individualized

something very human

finally in more recent years we started

having things like social and emotional

skills ability to form networks social

networks ability to have empathy towards

other human

ability to hear what they are saying but

also ability to lead networks and

ability to carry them with us across

different geographies this is a very

interesting type of things but all of

those things if you kind of deep dig dig

deep into yourselves you will find out

that you actually not only have them

already but you also live in through

those changes as well those definitional

changes I'll give you a couple of my

personal examples of that journey as

well when in 1990 I moved from Moscow to

Los Angeles I was the Soviet expert par

excellence I had in my possession

certain technical skills which were

above the average I had in my possession

certain attainment of education not

quite a hell of a lot of it at the time

but still it was distinguishable enough

and it was technical enough and narrow

enough it was a classic expert type of

education was education in highly

technical skill physical sciences

theoretical fields as well over the

years myself evolved but also I saw the

world around me evolve as well we are

now living in the global pattern of

flows of skills and human capital and

those flows are no longer defined just

by narrow definitions of skills they are

defined instead by talents they defined

instead by the intrapreneurial abilities

and attitude towards entrepreneurship

they defined instead by ability to

innovate and even an interest to pursue

innovation as such what next you might

ask on this journey of human capital

well next we're going to witness the

change of geographic distribution of

human capital up until now the

traditional form of human capital flow

worldwide was from the so called

South in other words from the emerging

economies middle-income economies low

income economies towards the so-called

north the advanced economies and then

there was mobility of human capital

within North from one advanced economy

to another what we are witnessing today

is the increase in is the breakdown of

this pattern and it's reversal first of

all we're witnessing an amplification of

flows of human capital within the

southern again I use inverted commas

here economies especially the

middle-income economies for example

movement of human capital from Chile

into Argentina or from the Argentina

into South Africa and so forth but also

we were witnessing a movement of human

cab

from the north into the emerging

economies and middle middle-income

economies Ireland is at the forefront of

all of this as well we are the economy

which simultaneously attracts huge

numbers of human capital and at the same

time ships out of the economy huge

numbers of human capital and this is not

just a crisis related today as I stand

in front of you we rank as the economy

12th in the world in our ability to

attract key talent into the economy yet

we ranked 40th in the world in our

ability to retain that capital and

economy this is something crucial and

the distinction between the ability to

attract and retain in the human capital

is very important but before we get into

it let's look at another example as well

example which comes from the point of

formation of human capital point of

creation of human capital from education

system when I graduated from my alma

mater at that time the most popular

degree conferred by university at the

time was the MBA

it was the highest earning degree to

have it was the most desire than the

most competed for degree as well binding

me by the early notice the MBAs were

displaced in my alma mater in this area

by MFA's Masters of Fine Arts while the

movement from MBAs to Masters of Fine

Arts was the broadening of education

scope because the degree is much broader

itself at the same time it still

retained this hierarchical silent

bounded structure of formal education it

is still an MFA it is still about fine

arts it's not about physics it's not

about engineering it's not about writing

code it is still defined what's next you

might ask next for education is the

creation of kaleidoscopic mosaics of

knowledge skills knowledge and skills

acting as enablement rather than the

final end in itself in terms of what

defines our human capital and in

particularly the knowledge and skills

we're looking for will be enabling the

if you want creativity and skills based

innovation innovation which is anchored

in our narrow knowledge and yet at the

same time is broad enough to encompass

new categories of knowledge as well

intrapreneurship will come to the

forefront of education system as well

you can't take

educate entrepreneurs but what you can

do is you can enable them you can give

them the tools to manage uncertainty to

look at the world from the point of view

of any uncertainty present in an

opportunity that sense in our education

system currently does not do at all

not just in Ireland anywhere else

experientially risk taken is another

dimension as well ability to translate

day-to-day observations and experiences

into opportunities and taking the risk

on those opportunities where the risk is

simultaneously is managed and exploited

is something again we don't teach people

in our schools at all this age of change

this movement to the human capital

centric economy where human capital

becomes mostly the most important factor

of production is a new age and yet the

process of change itself is not tapped

new for us we've lived through it as

humanity before not in our memory as

human beings but it's collective

humanity we've had the age of land which

lasted tens of millenia when the main

productive factor in the economy the

source of all productivity growth the

source of wealth was agricultural land

and later the land of the state that

gave way to the age of bricks and mortar

the age of construction we started

building aqueducts roads communication

systems and sewers cities in modern

capacity utilities we built that

culminated in us building trade links as

well the age of brings in more to the

age of construction he way to age of

physical technology the Machine first

powered by steam then powered by the

combustion engine increasing complexity

but ultimately one and the same the age

of machine naturally gave way to the age

of pure technology which we inhabit

today this is disembodied technology

that is not necessarily machine behind

Google but Google is nothing more than a

technology does Google empower us who do

we empower Google this is a very big

question because this is a

differentiator between the age of tech

the age of machine and the age that the

weights are in the age of tech and in

the age of the machine labor and fit and

human capital was substituted for by the

technology in other words technology was

there to displace labor parts of human

capital with very high level of skill

was there to help or enable the

machinery and the technology to do that

task but only parts at the same time in

that age there was a very clear

separation and a now age today there is

still a very clear separation between

the producers who hold the power supply

of goods and services and consumers

could technically demand those goods and

services the two sets are completely

distinct despite the fact that consumers

also employees of the firm's this is why

the firm's have to go to

ever-lengthening late in terms of trying

to understand what consumers demand we

live today in the age of pure data

mining the big data whereby we trying to

extract the signals about the large

pools of consumers out of

ever-increasing pools of information

this is the age of the Machine this is

the age of the technology in that age

risk is concentrated in the enterprise

in each firm the bigger the firm the

more the concentration that is ground

that firm and as a result of that

management evolved to become nothing

more than risk management structure the

firm itself manages risks in the future

all of that is going to go away it will

change it will change dramatically

technology will become enabler of human

capital rather than the other way around

in addition toward consumers will become

one and the same with producers we

already see in the cusp of that change

in the 3d printer and as consumers

become one in the same with producers

the power producer to supply the

uniqueness of producer the vertical

structure of the producer as the

dominant player and supply will start

dissipating as well as that happens what

happens then the big date doesn't matter

anymore what matters a small data

granular understanding of each

individual consumer down to their level

down to our human level away from us as

the blob on the screen in terms of the

data points and towards us as a human

being with our face with our preferences

with our feelings without desires what

else is going to happen although that

leads this merger producer and consumer

is going to lead to the decentralization

of the decision making and optimization

of the production processes that means

that risks are no longer concentrated in

one location but rather distributed

today across the different entities both

consumers and producers who wanted the

same and who nearly atomistic what

happens then no longer there is need

forest management because risks are not

concentrated so is the result of that

what we are moving towards is the

uncertainty management or mining of

uncertainty to extract the opportunities

out of it what else is there

well markers of this change are with us

already don't have to look far just look

at for example the contribution of

different factors of production that

exist in the economy towards economic

growth we have two sets of knowledge out

of this emerging the first step comes

from the advanced economies for the last

30 years or so what we've been

witnessing in the advanced economies is

the acceleration in total factor

productivity growth in human capital

productivity growth and simultaneous D

acceleration or decline in the

importance of physical capital and

technological investment that's right

technological investment in the age of

tech is declining the importance as the

contributor to growth as well what else

we are witnessing we're witnessing as a

result of the diminishing role of

physical capital the diminution of the

role of financial capital and debt in

particular hey hello we're at the

biggest epicenter of the debt crisis in

the world today this is the outcome of

change of the transition from one age to

another age of leverage is over for us

in advanced economies at the same time

creative industries the creative

contribution to the GDP growth

the innovative factor contribution the

factor of the creativity and design

arising and the importance interestingly

enough with the lag of about 20 or so

years exactly the same pattern is

happening in the middle-income and

emerging markets as well they are

catching up with stem following exactly

the same pattern of evolution as well

what the witness in there we're

witnessing near the flattening of the

returns to capital they're still high it

still pays to invest in physical capital

in those economies but the rate at which

they are rising has slowed down it's

flattened out next thing is going to

turn down what else we're witnessing as

well the age of leverage is nearing its

peak in those economies debt levels are

rising

not yet fully exhausted but they will be

soon or later we know that more

importantly what we're witnessing in

those economies is not the previous mode

of development whereby you produce more

and more of commoditized low-margin

goods at higher volumes the so-called

big China factories model of development

is disappearing as well from their

geographies they are going in the same

direction we travel in the negative

faster than we got there in the first

place that direction is infusing more

innovation component more design

component more indigenous creativity

component into their products and

services and developing new platforms

for launching of their businesses from

new forms of banking to new forms of

healthcare provision the economies which

we think as developing economies are now

at our heels at the top of our

distribution such as cardiac surgery for

example in India which has been supplied

to patients in the United States and in

Germany and the United Kingdom or the

banking services in Asia which are

displacing and removing through their

technological if you want capability and

through their ability to reach the

better customers and in a better way

serve them they displace in our own

banks currently as we speak so the

future is challenging the future changes

always challenge and it's the main

challenge - it is of course - the status

quo the difference in the current

challenge is that unlike in the previous

years we no longer need to provide the

platform of financial infrastructure and

physical infrastructure for something

that is coming next instead we have to

provide a platform of services and

policies and institutions which will

create an overarching concept of care

for human capital here is embodied in

creation of human capital attraction of

human capital ability of the economy to

retain that human capital and to enable

it as well this change is profound

across all of the structures of the

economy I will talk just about two of

them the private sector in the public

sector but there are also very

significant behavioral implications and

behave and also design implications the

way we live implication social

implications as well output in the

private sector the objective is for

making private sector and private

services in

tickler to become the enabler of human

capital how do we do that that means

that the firm will have to change

fundamentally from being a hierarchical

vertical structure whereby the

management serves the ownership into the

structure which actually is like a lob

horizontally distributed it rather

enables the creativity and risk taken of

the employees the ownership structure

will have to change with the firm

structure simply because their own is no

longer will be able to control fully the

entire production instead they will be

co-owners in the key intellectual

property that is being held by them

together with their employees

intellectual property concept will

change as well in a rapid pace of

innovation and creativity it's no longer

will make any sense to patent things and

copyright them you will not have time so

the change in structure of the ownership

will have to accommodate for it

management will have to drop out from

making any strategic decisions in the

future

currently management is a strategic

decision-making tool in the firm and

also the enactment tool for that

strategy into the production that will

have to add it will have to end in the

management will have to become nothing

more than a mechanic's standing on the

side of Formula one racetrack waiting

for the car to break down with tools at

the ready I will skip through the public

sector change simply because I have run

out of time as predictably academics do

human capital intensive growth is upon

us

it is common don't take it wrong it is

time for us to change for that future

like it or not

you