Empirical analysis of human capital development and economic growth in Europe

Recent discussion of the knowledge-based economy draws increasingly attention to the role that the creation and management of knowledge plays in economic development. Development of human capital, the principal mechanism for knowledge creation and management, becomes a central issue for policy-makers and practitioners at the regional, as well as national, level. Facing competition both within and across nations, regional policy-makers view human capital development as a key to strengthening the positions of their economies in the global market. Against this background, the aim of this study is to go some way towards answering the question of whether, and how, investment in education and vocational training at regional level provides these territorial units with comparative advantages. The study reviews literature in economics and economic geography on economic growth (Chapter 2). In growth model literature, human capital has gained increased recognition as a key production factor along with physical capital and labour. Although leaving technical progress as an exogenous factor, neoclassical Solow-Swan models have improved their estimates through the inclusion of human capital. In contrast, endogenous growth models place investment in research at centre stage in accounting for technical progress. As a result, they often focus upon research workers, who embody high-order human capital, as a key variable in their framework. An issue of discussion is how human capital facilitates economic growth: is it the level of its stock or its accumulation that influences the rate of growth? In addition, these economic models are criticised in economic geography literature for their failure to consider spatial aspects of economic development, and particularly for their lack of attention to tacit knowledge and urban environments that facilitate the exchange of such knowledge. Our empirical analysis of European regions (Chapter 3) shows that investment by individuals in human capital formation has distinct patterns. Those regions with a higher level of investment in tertiary education tend to have a larger concentration of information and communication technology (ICT) sectors (including provision of ICT services and manufacture of ICT devices and equipment) and research functions. Not surprisingly, regions with major metropolitan areas where higher education institutions are located show a high enrolment rate for tertiary education, suggesting a possible link to the demand from high-order corporate functions located there. Furthermore, the rate of human capital development (at the level of vocational type of upper secondary education) appears to have significant association with the level of entrepreneurship in emerging industries such as ICT-related services and ICT manufacturing, whereas such association is not found with traditional manufacturing industries. In general, a high level of investment by individuals in tertiary education is found in those regions that accommodate high-tech industries and high-order corporate functions such as research and development (R&D). These functions are supported through the urban infrastructure and public science base, facilitating exchange of tacit knowledge. They also enjoy a low unemployment rate. However, the existing stock of human and physical capital in those regions with a high level of urban infrastructure does not lead to a high rate of economic growth. Our empirical analysis demonstrates that the rate of economic growth is determined by the accumulation of human and physical capital, not by level of their existing stocks. We found no significant effects of scale that would favour those regions with a larger stock of human capital. The primary policy implication of our study is that, in order to facilitate economic growth, education and training need to supply human capital at a faster pace than simply replenishing it as it disappears from the labour market. Given the significant impact of high-order human capital (such as business R&D staff in our case study) as well as the increasingly fast pace of technological change that makes human capital obsolete, a concerted effort needs to be made to facilitate its continuous development.

Roman Catholicism, diplomacy, and the European communities, 1958-1964

This article investigates the Roman Catholic Church's role in the process of European integration from the first Hallstein Commission in 1958 to the failure of the Holy See's application to establish a diplomatic representation at the European Economic Community in 1964. The article focuses on the Church's response toward emerging European institutions and shows that local mobilization in Luxembourg, Strasbourg, and Brussels was instrumental in shaping relations between the Catholic Church and the European Communities (EC). The Church's position toward the EC, placing local communities as prime actors in dialogue with European institutions, reflected the sensitive nature of religion during the Cold War.

The Ecumenical movement and the making of the European Community

The European Community has largely been considered a predominantly secular project, bringing together the economic and political realms, while failing to mobilise the public voice and imagination of churchmen and the faithful. Drawing on a wide range of archival sources, this is the first study to assess the political history of religious dialogue in the European Community. It challenges the widespread perception that churches started to engage with European institutions only after the 1979 elections to the European Parliament, by detailing close relations between churchmen and high-ranking officials in European institutions, immediately after the 1950 Schuman Declaration. Lucian N. Leustean demonstrates that Cold War divisions between East and West, and the very nature of the ecumenical movement, had a direct impact on the ways in which churches approached the European Community. He brings to light events and issues which have not previously been examined, such as the response of churches to the Schuman Plan, and the political mobilisation of church representations in Brussels, Strasbourg and Luxembourg. Leustean argues that the concept of a 'united Europe' has been impeded by competing national differences between religious and political institutions, having a long-standing legacy on the making of a fragmented European Community.