Preface: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES
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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
Preface HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES - To learn more about this author, visit OECD Development Centre's Website.
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