Human Development and Economic Sustainability


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Human development ensures a country’s citizens’ well-being, fueling economic progress. A healthy and educated society fosters a growth culture, efficiently participates in achieving development goals, and supports economic activities while ensuring that they do not compromise the environment, social equity, or future generations’ ability to meet their needs. Modern nation-states like South Korea, Singapore, and Finland have proved that by creating employment opportunities, promoting a skills-based economy, embracing entrepreneurial culture, and getting acquainted with technological advancements, human development boosts long-term progress and prosperity and provides a firm ground for a country’s economic sustainability.

An overview of the terms: ‘Human Development and Economic Sustainability’, and their Connection

Moving towards the understanding of the terms, human development is a broad concept encompassing the citizen’s overall quality of life, warranting access to public resources and meeting basic human needs. Delving deep into its concept, the United Nations Development Agency (UNDP), an international development forum, devised a Human Development Index (HDI) in 1990 to gauge the extent of human development in a country. HDI is an all-inclusive measurement index that scales development performance and involves a new approach to development efforts. The foundation of HDI is built on the three crucial elements of a society’s progress: longevity, knowledge, and the standard of living. On the other hand, economic sustainability refers to the activities that portray long-term development while considering the perspective of being environment-friendly and enabling future generations to meet their own needs. It is backed by the Sustainable Development Goals (SDGs), an initiative by the United Nations (UN) to address sustainable development challenges by practicing the conservation of natural and financial resources to create long-term financial stability. Conclusively, a healthy and educated population builds the foundation of sustainable projects, boosting long-term progress and prosperity. Thus, human development is a prerequisite for economic sustainability for a country.

How does human development lead a country towards economic sustainability?

  • The enhancement of employment opportunities

          One of the critical dimensions endorsed by human development is promoting knowledge through schools, colleges, universities, technical and vocational training institutes, etc. It creates a prominent effect on people’s overall improved capabilities, provision of better learning opportunities, and generates a skill-based workforce able to cope with technological advancements, thus enhancing employment prospects. In addition, it helps eliminate poverty and unemployment, the challenges primarily faced by developing and under-developed countries. As per the World Bank report of 2019, “Singapore has significantly reduced unemployment through its knowledge-based economy.” Thus, human development fosters economic sustainability by generating multiple employment opportunities.

  • The focus on skilled Labour promoting economic growth

         In the same way, educated individuals who are more capable and trained play a vital role in facilitating a better economy by promoting high-valued industries and introducing cost saving measures. Investing in human capital helps a country maintain a stable workforce, generate considerable revenue, and condense socio-economic disparities. To demonstrate the fact, the case of South Korea can be taken as an example, which was once a war-torn country with limited resources, dependent upon foreign aid, having a per capita income of 70 USD. By rightly investing in human capital and technical education and promoting its labor-intensive industry, the country successfully executed the IMF exit plan and, after taking a remarkable journey, emerged as one of the most developed economies, raised its per capita income to approximately 32000 USD, and eventually became a member of OECD and G-20, a clear indication of its enormous economic growth.

  • The emphasis on productive workforce supporting the national economy

   Moreover, if the fundamental needs of people are fulfilled, indicated by higher values of HDI, they would be able to render their energies more creatively. Furthermore, they would have ample time to focus on more critical tasks and exercise the freedom to adopt an occupation that makes them feel more accomplished. On the other hand, low human development limits the options and opportunities for living tolerable life. The case of Germany is the same, where a healthier and better lifestyle promotes waves of opportunities and high productivity levels. The country’s emphasis on human development and removing the constraints, which may have been caused otherwise, has contributed to it hosting a solid manufacturing sector, providing a breeding ground for advanced technology, and producing noteworthy export-quality products; all these factors collectively support its national economy.

  • The investment in human development returned via exports

Similarly, investment in human development enables a country to compete in the global market. Educational excellence and mental health enhance innovation and creativity among its citizens, thus promoting a culture of research and development. The mushrooming of new startups leads to new products, generating fruitful results that positively impact the national economy. To illustrate this fact, the situation of Finland can be analyzed, where the skilled and healthy population proved to be an essential asset, and companies like Nokia emerged that took the international markets and set the bar so high for other telecom companies, boosting the exports and resulting in the economic success on a global level.

  • Human development: a factor that attracts FDIs

      Likewise, human development in a country is an indicator of its educated workforce, effective governance system, and low criminal activity. Since foreign investors tend to make decisions based on the risk factor of the project and the expected return on their investment, a safe environment and competent workforce ensure ingenious management of the country’s resources and safeguard the assets. For instance, the human development initiatives taken by the Singaporean government, like the availability of skilled personnel, innovation opportunities, and sustainable culture, have created a compelling environment for foreign investors. This proves that stockholders are more interested in investing in a country with a good HDI, expanding opportunities for free trade Agreements (FTAs), thus bolstering the state’s economy.

  • The promotion of entrepreneurship culture to overcome issues, leading to economic sustainability

Adding more to it, a population enjoying better access to resources encourages their children to seek higher education, leading to a generation of educated youth. It creates room for creativity and innovation, consequently fostering the spirit of entrepreneurship and igniting new startups. The overarching yield of entrepreneurs comes up with unique solutions to national and international sustainability problems, like the production of renewable energy, digitalization of currency, etc. A healthy business environment also helps talent retention and overcomes domestic issues like brain drain. Moreover, the educated population creates immense pressure for improved governance, helps combat social evils like corruption, promotes sustainable business policies, and positively impacts economic sustainability.

  • The technological advancements providing access to global markets

Lastly, when a country prioritizes its human development and invests in innovation hubs and research centers, the dream of economic sustainability is materialized in the shape of technological advancements. Such nations can easily catch up with other countries and lead towards multiple opportunities for international collaborations and trade agreements with other countries, exchange of resources, and provide access to markets across the globe, which enhances their economic resilience. Likewise, China has proved its mettle through aggressive development in its technological sector, thus propelling its economic growth and enabling it to become a significant player in the global marketplace.


In a nutshell, a country’s investment in human development by capitalizing on public education, healthcare, quality of life, and overall well-being undeniably establishes a strong foundation for balanced and sustainable growth over the long term.

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