#3.2 The Difference Between Human Capital and Physical Capital

Physical capital refers to resources made by businesses and governments to aid in production.

Human capital consists of physical assets such as machinery and transport vehicles.

Physical capital includes infrastructure such as roads, railways, and transport vehicles.

The reward for using physical capital in production is interest or profit.

The quality and quantity of physical capital are not relevant for economic growth.

Human capital represents the skills, knowledge, and experience of the workforce.

Education and training have no impact on human capital development.

Countries with a highly educated workforce often have a competitive advantage.

Human capital only applies to individuals and not to the population as a whole.

The compensation for labour is wages, which vary based on the value of work performed.

Physical capital is intangible, while human capital is tangible.

Investment in both physical and human capital can lead to greater productivity and economic growth.

Low-income countries typically face challenges due to a lack of physical capital.

Middle to upper-income countries mainly struggle with a lack of physical capital rather than human capital.

Physical capital and human capital are unrelated and do not complement each other.

Specialisation allows individuals, firms, and economies to focus on producing specific goods and services efficiently.

Division of labour increases productivity by breaking down tasks into simpler, repetitive tasks.

The interplay between physical and human capital has no impact on economic growth.

A country investing in advanced machinery does not need skilled workers to operate it.

Both physical and human capital are essential for sustained economic development.