What is the Difference Between Human Capital and Social Capital?
🆚 Go to Comparative Table 🆚The main difference between human capital and social capital lies in their focus and the resources they represent.
Human Capital refers to the knowledge, skills, abilities, and other characteristics (KSAOs) that individuals possess, which are valuable to an organization or country. It is the intellectual capital of an organization, including competencies, knowledge, skills, and creativity. Human capital is dependent on the employees, and when they leave a company, the human capital is negatively affected.
Social Capital refers to the resources gained from being part of a network of relationships among people who live and work together, enabling a society to function effectively. It is the interpersonal network formed by relationship investment. Social capital complements human capital to create a competitive edge for businesses and foster innovation. Individuals with high social capital tend to grow faster in their careers, get recognized more easily, and can validate organizational goals and help teams achieve them.
In summary, the key differences between human capital and social capital are:
- Human capital focuses on the skills, knowledge, and experience possessed by individuals, while social capital focuses on the resources gained from being part of a network of relationships.
- Human capital is dependent on employees, while social capital is derived from relationships and networks.
- Human capital is an individual's intellectual capital, while social capital is a collective resource gained from being part of a network.
Comparative Table: Human Capital vs Social Capital
Here is a table highlighting the differences between human capital and social capital:
| Feature | Human Capital | Social Capital |
|---|---|---|
| Definition | Human capital refers to the knowledge, skills, and experience of individuals, which are considered assets to a firm or nation. Social capital refers to the connections and relationships among individuals in a society, which enable the society to function effectively. | |
| Focus | Human capital emphasizes the skills, knowledge, and experience of individuals, including their value to a firm or nation. Social capital focuses on the relationships and connections between individuals, and the resources and advantages acquired from these connections. | |
| Ownership | Human capital is owned by individuals and can be seen in terms of their worth or cost to a firm or nation. Social capital is a collective resource that arises from the connections among individuals in a society. | |
| Impact | Human capital can be affected when workers leave a firm, as their knowledge and skills are lost to the organization. Social capital remains intact even as individuals come and go, as it is based on the connections and relationships among people in a society. | |
| Measurement | Human capital can be quantified by assessing the education, training, and experience of individuals. Social capital can be quantified by examining the size and quality of an individual's social network, as well as the resources and advantages acquired from these connections. | |
| Influence on Job Performance | Human capital, in the form of education and training, can directly influence job performance. Social capital, through relationships and connections, can also impact job performance indirectly by providing access to information, knowledge, and other resources. |
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