Human capital in the new economy: devil's bargain?
| Published date | 01 March 2004 |
| Date | 01 March 2004 |
| Pages | 153-164 |
| DOI | https://doi.org/10.1108/14691930410512978 |
| Author | Judy McGregor,David Tweed,Richard Pech |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
Human capital in the new
economy: devil’s bargain?
Judy McGregor
Human Rights Commission, Wellington, New Zealand
David Tweed
Department of Management, Massey University, Palmerston North,
New Zealand, and
Richard Pech
Graduate School of Management, Faculty of Law and Management,
La Trobe University, Melbourne, Australia
Keywords Human capital, Competences, Employment, Market economy
Abstract The burgeoning literature about the knowledge economy has marginalised its most
important dimension – people. The development of human capital and its role in the competitive
advantage of business is discussed in relation to the changed nature of the employment
relationship. In particular Drucker’s concerns about the threat to business of attenuated
relationships between workers and their organisations are examined. Contextual factors such as
the dynamic nature of labour markets, the centrality of profit making and the definitional
difficulties inherent in the new and old economy dichotomy are acknowledged. A transitional model
of human capital in the new economy is suggested as a way of modernising traditional thinking.
An analysis of the capabilities required by new economy workers leads to a discussion of the
corresponding competencies necessary for managers. The paper concludes that changed
employment relationships do not spell death to people development. Rather it makes managing
talent different and more challenging.
Introduction
The extraordinary volume of popular and academic commentary about the
knowledge economy has tended to marginalise its most important dimension –
people. Human capital in the new economy is largely a Cinderella topic. This is
despite Drucker’s (2002, p. 71) observation that developing talent is business’s
most important task, what he describes as “the sine qua non of competition in a
knowledge economy”.
Human capital embraces both the broader human resource considerations of
the business workforce (traditionally known as the labour market) and the
more specific requirements of individual competence in the form of knowledge,
skills and attributes of managers and the people they manage.
Dynamic global change has impacted swiftly on the way talent is managed
in businesses. At the end of the 1980s Charles Handy used the shamrock
metaphor to describe the organisation of the future with three shamrock
semi-circles describing the division of the workforce. These divisions were the
core staff of loyal employees, those who were contracted and paid for services
rather than by tenure, and the flexible rump of temporary workers.
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
www.emeraldinsight.com/researchregister www.emeraldinsight.com/1469-1930.htm
Human capital
in the new
economy
153
Journal of Intellectual Capital
Vol. 5 No. 1, 2004
pp. 153-164
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691930410512978
To continue reading
Request your trial