Human
Capital
Sweden
Denmark
Italy |
European Commission and CEDEFOP
OECD |
The issue of Human capital
is a subset of the Intangible Assets topic. It is more focused on human
resources i.e. skills, training and social dimension.
Sweden
In Sweden, within Stockholm
University, a special research Institute works with the Human Resource
Costing and Accounting concepts: the Personnel Economics Institute -
PEI. Headed by Birgitta Olsson, it performs studies concerning Human
Resource Costing and Accounting (HRCA)
issues, is in charge of the "Journal of Human Resource Costing and
Accounting" and organises international workshops. This year, the
workshop is dedicated to "Measuring and Managing the
Invisible". It will take place on June 16, 2000 in Stockholm.
In fact, there is School
of thoughts based on the HRCA concept which born in Sweden and developed
in other countries: today, the HRCA Network is international. This
Network aims to contribute to the scientific exchange between researchers in the
field of Human Resource Costing and Accounting. The network met first in
Stockholm in June 1995, then in Stirling in 1996 and again in Stockholm in 1998
under the form of workshop around paper presentations. The 2000 workshop took
place in Stokholm on June 13, on "Measuring
and Managing the Invisible".
At present about 10
countries are represented in the HRCA-network. Since 1996, it publishes the
Journal of Human Resource Costing and Accounting.
In Sweden, the Swedish Ministry of
Labour and the Swedish Council for Work Life Research (RALF) are also
very active on human capital. Issues
involving working life and work environment will be also raised during
Sweden's tenure. As one phase in these efforts, the National Institute
for Working Life (NIWL), the National Board of Occupational Safety and
Health (NBOSH) and the Joint Industrial Safety Council (JISC) will hold
a joint conference in January 2001 called Work Life 2000. It will take
place on January 22-25, 2001.
In order to prepare
this event, a total of about 70 preparatory workshops have been and will
be held on important EU subjects between 1998 and 2000. The
"Workshop Statements" will subsequently serve as input to
sessions at the conference.
In that framework, a
workshop was
held in Brussels on the topic on intangible assets, in particular, in September 1998,
with the
"Human Capital workshop" on "The Value of
Investing in the Workforce".
"The managing of
intangible assets is a key issue in the creation of wealth for
individuals, organisations and nations. In the past the European
Commission has discussed appropriate measures to increase the
transparency of intangibles, especially those concerned with human
capital. However, too little is known about how the intangibles are
managed and accounted for and how they contribute to growth and
employment. In two workshops, such issues will be discussed. In the
present workshop human capital is highlighted, whereas intangible assets
in general are discussed in the second workshop". (Introduction
to the workshops)
The workshops scientific organisers
were Jan-Erick Gröjer and Ulf Johanson from the Stockholm University.
Denmark
In Denmark, the Danish Confederation of
Trade Unions - LO plays a major role is the largest national trade union confederation in Denmark
and is recognised as the most representative workers' organisation in both the
public and the private sector.
LO has launched "The
Developing Workplace" initiative in order to catch and reshape the
development process so that it matches the Danish model in which the employees
and employers conduct a dialogue and work together to solve their problems.
In that framework of building a
"community of interest", LO has taken part in the debate concerning
knowledge accounting. In a booklet published in June 1999 and entitled "You
knowledge - can you book it?", LO considers that it would be necessary
to make a "kind of account or statement of the knowledge : a knowledge
account", to make the staff and their knowledge visible. A knowledge
account could pave the way for investments in training, increase the interest of
investors in the company and finally, oblige individual employees to invest more
on their own knowledge and development.
It considers that the Trade
Union has a role to play. "The Trade Union Movement wants to see knowledge
accounting as part of the agenda for companies: "we must be able to work
with the development of knowledge accounts". Therefore, LO has developed
tools and methods to calculate investments in staff training. But Knowledge
account cannot be only considered as a technical matter. LO suggests that a
social and ethical account (attitudes to people, social responsibility, employee
rights, etc.) should be prepared in parallel with the knowledge account (people,
systems, the market, etc.).
LO has also published a booklet
of 22 pages entitled The National Human Capital Accounts focusing on
competence development and lifelong learning, both for the individual and for
society as a whole. This workbook shows, among other things, how to calculate
the value of investment in training and development.
|
Contact
The
Danish Confederation of Trade Unions - LO
RosenĆ
rns Allé 12 1634 Copenhagen V
Michael Jacobsen, senior economic adviser (Field
of responsibility: The Developing Workplace, social
policy, senior employees' policy)
Tel.:
+45 3524 6129, fax +45 3524 6307
E-mail: MJA@lo.dk
http://www.lo.dk
|
Italy
Italy counts a series of
networks and organisations interested in the issue of "social audit"
or "social balance and accounting":
- SEAN : Social and Ethical, Auditing
and Accounting Network.
Based
in Milan, the SEAN network ("Social & Ethical Auditing &
Accounting Network") is a coalition of auditing (KPMG) and
communication (Strategia d’Immagine) competences working to develop
methodologies to measure, assess and communicate business performance in
stakeholder relations.
- Linked to the SEAN network, the "Istituto
Europeo per il Bilancio Sociale" (European Institute
for Social Report ) is chaired by the the same president,
Roberto Marziantonio,
- A web site "Bilancio
Sociale" has been implemented on Social Audit
issues. This web site is the Italian part of an international
web site dedicated to social reporting Social
Audit in the world.
European
Commission and CEDEFOP
In October 1999, a
Communication on "Structural change and adjustment in European
manufacturing" and recent declarations of new Commissioner Erkki Liikanen
reaffirmed that "we must reinforce intangible investments which is a key
factor in competitiveness: life-long learning, spirit of enterprise, innovation,
protection of intellectual property, European patents (…)". Therefore,
EU Information Society policy, R&D and innovation policies and education and
training policies should include actions aimed to stimulate innovation, the
spirit of enterprises, creativity and the competitive development of European
companies through intangible investments. But the Communication recognised that "despite
the importance of these types of capital for the competitiveness of the economy,
our relevant data sources and our understanding of the investment decisions in
this field are inadequate".
Since 1994, the European
Commission has launched a series of studies, actions and projects which aim to
better understand the knowledge economy and the importance of intangibles as
competitiveness factors. The European Commission tends to consider that policy
makers should take stock of that evolution by defining new objectives and
instruments for industrial policy in relation, in particular to training.
In 1996 and 1997,
a series of documents analysed the industrial aspects of the information society
in the framework of DG III activity (Working document on Impact of the
Information Society on Industry and Service Sectors in May 1996; Analysis of the
Industrial aspects of the Information Society). This work has been influenced by
the specific recommendation of the Competitiveness Advisory Group
("Enhancing European Competitiveness. CAG June 1995 also called "Ciampi
report"). The CAG report identifies the need for a concerted European
approach in the form of self-sustaining Knowledge Resource Centres. These KRCs
will be linked in networks to enhance synergy and ensure a Europe-wide framework
for individual experiences. These networks will facilitate information supply
and demand and play a leading role in enhancing developments in the information
society. For the CAG, this includes fostering business opportunities and
education and training activities, diffusing solutions throughout Europe, and
encouraging learning organisations.
This preliminary work has been
followed in 1998 and 1999 by several reports and studies stressing the
role of intangible and human resources as competitiveness factors:
- a series of benchmarking
studies on financing innovation, skills, ICT and new
organisational arrangements;
- at the macro level, a study on
"Intangible Investment and Human Resources"
carried out by WIFO. This study proposed a analysis of
the structural differences with regard to importance of
intangible investments across industrial sectors and
underlines weaknesses and strengths of the European
industry;
Concerning more specifically
human capital, Education and
Culture DG tries to develop new ways of
demonstrating the value of investments in human resources. The work is clearly
policy-oriented and is based on the fifth objective set out in the 1995 White
Paper "Teaching and learning: Towards the Learning
Society". The fifth
objective states that investments in training ought to be treated in the same
way as other capital investments. More recently, on the Luxembourg Employment
Summit in 1997 and especially the 1998 employment guidelines, Member States were
asked to re-examine the obstacles to investments in human resources and possibly
provide for tax or other incentives. A survey on prevailing accounting and tax
regulations in the EU Member States suggests other ways of achieving equal
recognition with other capital investments.
In this field, the European
Commission works in close cooperation with CEDEFOP (European Centre for the
Development of Vocational Training), whose aim is to develop indicators that
measure the effectiveness of vocational training and education. The "Centre Européen
pour le Développement de la Formation Professionnelle"
was established by Council Regulation 337/75 as a non-profit- making body,
independent of the Commission, to help rethink the direction and requirements of
vocational training and assist the Commission in promoting the development of
vocational training.
A series of recent European
Commission documents – principally the White Paper - see above - and "Towards a Europe of
Knowledge" – set out proposals and guidelines for stimulating VET. In
that framework, one task of CEDEFOP is to look at the financing of vocational
education and training and, more specifically, works on measuring and reporting
on human capital.
In particular, its aims is to
support the objective 5 entitled "treat capital investment and investment
in training on an equal basis" of the European Commission white paper,
"Teaching and Learning: Towards the Learning Society". Therefore, a
dossier on "Human resources accounting" was included in CEDEFOP
workprogramme for 1997-2000:
"Despite a number of
studies concerning the effects of training, information gaps hinder the
quantification of the effects of training and the qualification of the
respective roles of the different financiers. In economic terms, all financial
expenditure is a risk. The risk is greater when the results of the expenditure
cannot be formulated in tangible terms. One answer to this problem is to try to
translate intangible assets into tangible terms, by giving them a concrete
value."
"This is an issue which is
increasingly debated. The Commission’s White Paper on Teaching and Learning
emphasises the treatment of "capital investment and investment in training
on an equal basis" to explore possible ways to account for investment in
intangible resources. As we move towards the ‘Knowledge Society’, the
challenge for the future will be measuring the value of knowledge within
enterprises in the same way as other assets are measured.
The potential of human resource
accounting (HRA), however, remains stronger than concrete progress. A number of
conceptual, methodological, legal and institutional barriers exist. In addition,
there are different interests associated with this issue, in defining both its
objectives and the way in which it should be pursued. The dossier on this topic
will provide an overview of the various approaches to human resource accounting
as well as a comprehensive outline of the stakeholders’ interests in HRA."
Source: Funding Vocational Education
and Training: the CEDEFOP approach for providing information and informing
debates
CEDEFOP has conducted several activities
concerning the measuring and accounting of human capital such as:
- participation to conferences;
- implementation of a "human
capital network", i.e. a electronic meeting room for human
capital which contains resources on a list of research Articles,
Literature Review, Publications, Working Papers, Conference
Presentations, etc. on human capital;
- studies and papers such as:
- Exploring the returns to
continuing vocational training in enterprises, a review
(Barrett A., Hövels B., den Boer P. Kraayvanger G) -
1998
- Regognition and transparency.
- Human resource accounting:
interest and conflicts - Frederiksen Jens V. and
Westphalen Sven-Age
- Reporting on human capital:
objectives and trends - Westphalen Sven-Age
OECD
Work on human capital
and measuring of knowledge base is an important activity within ELSA
Directorate of OECD. In March 2000, OECD has organised an International
symposium on "The Contribution of Human and Social Capital to
Sustained Economic Growth and Well-being", in partnership with
Human Resources Development Canada. One aim was to draw on the work
already carried out in the OECD on Human Capital Investment to identify
possible new areas of research, data development and policy analysis.