Human capital and economic growth under modern globalization

Abstract

In the modern globalized world, human capital and economic growth roles have become increasingly vital, demanding a closer examination of their dynamics. It is crucial to grasp the unique nuances of globalization to comprehend how it shapes global socio-economic systems and impacts individual nations. This understanding also highlights the evolving challenges and opportunities for human capital in driving economic progress. Moreover, the distinct circumstances small countries face amidst globalization must be noted. Studies have confirmed that these nations operate under unique mechanisms that influence their socioeconomic development. This study focuses on a macro systemic analysis of the interplay between human capital and economic growth, explicitly offering tailored recommendations for Georgia. Research leveraged econometric methods and harnessed the power of artificial intelligence, specifically employing machine learning models. The analysis shows that the null hypothesis about no cointegration was rejected for the GDP per capita and spending on healthcare with the P-value of 0.0354, while for the GDP per capita (or GDP growth) and spending on environment had the P-value of 0.0074 (0.0052) in Georgia. This reflects the impact of spending on human capital on the economy (in Georgia and Ireland) and vice versa (in Georgia, Latvia and Lithuania). Research findings show that future-oriented skills training for entrepreneurs and specialists is essential in a modern, globally competitive environment, focusing on adaptability and global best practices.