Human capital and development: the Southern dilemma

Abstract

This paper deals with the problematic and complex framework of the relationshipbetween human capital and the development of South's lagging economy.We will start by focusing - from a quantitative and qualitative point ofview - on the processes of education and investment in knowledge, innovationand research. The first critical evidence is that, although important progress hasbeen made in the field of education, it has not led to significant increases ineconomic wellbeing. The «Southern dilemma» to solve is where is the jam ofthe mechanism of development, which should have drawn an extraordinary leverfor growth just from the accumulation of human capital. The answer suggestedby the analytical evidence is that human capital, in recent years, has largelybeen «underutilized» for southern economic development, causing - along witha number of other factors - the interruption of a positive trend and even a processof depletion of the human capital in this area. Our idea is that economic andsocial factors - both current and prospective - have become and will becomeever more crucial in the education choices of new generations. The process ofaccumulation of human capital, fundamental for the development, risks beingundermined by poor economic performance, which will affect in particular labourmarket, and by the serious inadequacy of the institutions responsible forpromoting the transition from education to employment. Therefore, it is necessaryto implement a wide range of policies - from «differentiated» educationalinvestments to bridge the gaps as well as effective policies for job guidance, toselective industrial policies which support the demand for skilled workers - inorder to come out from the «trap of underdevelopment» of the South of Italy.