The main theme for the programme of work 2001-2002 at the Development Centre was Globalisation and Governance. Multinational enterprises (MNEs) are a key actor of globalisation and also raise numerous governance issues. Accordingly, their role in poor countries has always interested the development community.
The Development Centre has contributed to the debate by organising a forum entitled “FDI, Human Capital and Education in Developing Countries” in December 2001 in Paris.
During this event, a number of experts, including policy makers, researchers and civil society specialists from around the world gathered to discuss how MNEs and government policies can be mobilised to promote human capital formation and hence economic growth. Ironically, one of the main conclusions from the conference was our lack of knowledge with respect to the human capital development activities of the MNEs.
This synthesis by Koji Miyamoto, presently at the Directorate of Employment, Labour, and Social Affairs of the OECD, is a follow-up of this conference. The purpose is to assess the current state of the literature on FDI and human capital formation and to see what we could learn from the information available to policy makers, academics, and other stakeholders.
The author finds abundant evidence in the literature that human capital formation is indeed among the important pre-requisites for developing countries to start benefiting from FDI. However, an intensive investment in human capital is not sufficient for developing countries to continuously benefit from FDI. Other essential fundamentals include: i) sound policy and an attractive investment climate; ii) co-ordination between formal education and training policies; iii) collaboration among all stakeholders of human resource development including host government, investment promotion agency (IPA), MNEs, and educational institutions; and iv) identification of the type of MNEs that would benefit host countries the most in terms of human capital development and technology transfer. These conclusions point out the importance of solid governance in host developing countries to fully benefit from the waves of globalisation via human capital development and technology transfers.
Prof. Louka T. Katseli Director OECD Development Centre 28 July 2003 OECD DEVELOPMENT CENTRE Working Paper No. 211 HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES by Koji Miyamoto
To learn more about this author, visit OECD Development Centre's Website.
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Created in 1962 by the Organisation for
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