Social cohesion is vital to promote long-run growth

Outlook

Reports from the World Bank on the changing nature of work and from the Pathways for Prosperity Commission on inclusive growth argue that countries need to maximise their human capital to fulfil the opportunities offered by digitalisation.

Exploiting human capital (the skills, knowledge and capabilities of a workforce) depends on social capital (personal and social relationships, social norms and civic participation in society). Social capital provides the social cohesion that licenses governments to invest in the health and education of children, particularly to develop advanced cognition, social behaviour and adaptability, all regarded as critical for developing the human capital that promotes growth.

Countries with higher social than human capital will find it easier to invest in people, those in the reverse position will struggle.

Impacts

• Longer lives and workforce churn make lifelong learning key, but training needs to focus more on the low skilled than the already skilled.
• Social assistance and insurance schemes can mitigate the losses from worker reallocation as workers will more securely aim for new skills.
• E-monitoring of teachers and health workers in India and Kenya has improved outcomes: such successes need to be scaled up.