Investments in Human Potential and Human Capital as a Leading Factor of Economic Development

Abstract

The relevance of the article is determined by the fact that human potential and human capital are the leading factors of socio-economic development of the state. On the one hand, the level of human capital and potential determine the productive force of the country’s economic growth, on the other hand, the human being is the main consumer of the results of this growth, the highest aim, and the main criterion of the quality of economic growth. The article presents the results of theoretical analysis of the categories of “human capital” and “human potential”. As a result of the analysis, it is determined that to date there is no unified methodology of categorical and conceptual apparatus of “human capital” and “human potential” in the aspect of increasing the efficiency of human resources utilization both for individual economic entities and for the state as a whole. It is established that human capital, based on economic theory, is a phenomenon that is already directly used in the production process, while human potential is a category that involves the potential acquisition of higher professional quali-fications (competencies, knowledge, skills and abilities of labor activity) by an employee. It has been proved that in order to develop the level of human potential and capital, individual business entities and the state as a whole, implement various investment programs that ensure the improvement of professional qualification of the country’s personnel. However, this investment is accompanied by a number of risks, and one of the main risks is the lack of scientifically-based criteria for assessing the effectiveness and efficiency of investment pro-grams. The article presents possible reasons for this problem and formulates proposals for its solution. The practical significance of the article lies in the fact that the obtained results of theoretical analysis and the identi-fied problems of investment can be used in the practice of public management and administration in the im-plementation of measures aimed at the development of human potential and human capital.