In 1494, an Italian monk named Luca Pacioli published an overview of the mathematics of his time. His 36-chapter work described what has since become standard knowledge among the world’s finance and business professionals and a building block of balance sheet accounting: double-entry bookkeeping. And since the advent of this method, invested capital has been the pillar of every enterprise, government, and economy. Even today, in the wake of the global financial crisis and amid a spreading debt crisis, invested capital remains the core and the promise of economies everywhere. But a much bigger crisis is yet to come—one that strikes at the very purpose of economies but is scarcely noted, let alone managed: the crisis in human capital.
Every economy’s ability to compete depends on a steady supply of human capital and talent. When that supply is inadequate, imbalances result, creating serious threats not only to the economy but also to social and political stability and future development. This impact, moreover, extends beyond borders.
Significant imbalances in the demand for labor and its supply threaten 25 of the world’s major economies. Here are BCG’s projections country by country along with proposed remedies.