Role of human capital in the promotion of technological progress, economic growth and development in Africa: A case study of Kenya

Abstract

Background: This article evaluates the role of human capital in the promotion of technological progress, economic growth and development in Africa by focusing on the case of Kenya.

Objectives: The overall objective of this article was to evaluate the effects of human capital on technological progress, economic growth and development in Kenya over the period between 1971 and 2014.

Method: In this article, human capital was measured by human capital index defined as the ratio of current level of human capital in the national economy to the level of human capital 2 years ago. In particular, human capital in the broad sense was estimated by computing the ratio between 2 years of the hypotenuse of capital and labour vectors, and this measure outperformed all the other measures of human capital by yielding very good regression results by way of the generalised least squares technique.

Results: Based on the econometric and statistical analyses, human capital in Kenya was found to have had a positive influence on economic growth in the long run. Human capital was also found to have had a positive influence on labour in the long run.

Conclusion: Both human capital formation and technological progress should be given priority in the promotion of economic growth and development in Kenya rather than merely increasing the productivity of either capital or labour. Capital accumulation and labour generation should also be encouraged because increase in the two variables always under normal circumstances results in economic growth and development.