It’s About Human Capital, Stupid!

Pithy expressions have a certain appeal. They have staying power, and can be adapted and used effectively in a variety of contexts.

One of my favorites is a three word phrase that has been appropriated by many and used with abandon: “The economy, stupid.” Yes, the contraction “It’s” has been typically inserted at the beginning to make it a proper sentence.

So who’s the genius behind such a succinct statement?

None other than political commentator and former strategist for Bill Clinton’s 1992 presidential campaign James Carville (pictured). Intended for Clinton’s campaign workers as one of the three key messages on which to focus (the other two dealing with healthcare and change), Carville’s message is so very appropriate for politicians of all stripes and level: municipal, state-provincial and national. If you’re not focused on what’s not just on voters’ minds but also the nation’s strategic issues, than you’re a lost cause as a politician.

Fast forward 23 years to 2015, where Canada has a federal election on October 19,and where the United States is in the throes of a protracted 2016 leadership campaign for both the Republicans (a gong show at best) and Democrats (a supposed coronation for Queen Hillary). It’s definitely not a pretty sight.

With Prime Minister Stephen Harper’s Conservatives (in power since 2006) clinging to the mantra that Canada has run-away crime (totally false) and a terrorist hiding under every bed (an illusion caused by excessive pot-smoking), virtually zero is being done to looking to the future in terms of developing the country’s capacity in such areas as the applied sciences, advanced technologies and basic research (cut heavily under Harper), which is where innovation resides. It’s a sad–and indeed terrifying–story.

I spent three decades in the public sector, working on such challenging subjects as labor market trends (eg, jobs of the future), global competitiveness of Canadian companies, and developing human capital (economist speak for education and training). If there were ever a time for a country to get its act together when it comes to building its workforce, it is now.

Yet, for the past decade Canada has slept while Stephen Harper has clung to the naïve notion that Canada is an energy superpower; investments in other sectors of the economy are not necessary. For someone with a Master’s degree in economics Stephen Harper has proven to be a bit of a slow learner, notably when it comes to globalization and the interdependency of markets.

And then the price of oil nose-dived, thanks largely to hydraulic fracturing (fracking) technology advancements in the U.S. and conservation efforts. Your correspondent can picture Harper waking up one morning upon news of the new reality and looking in the mirror, uttering “Holy crap!” Well, Russia’s stoic president Vladimir Putin probably expressed the same thought, considering the mess that country is in; call it what it is–recession.

In the past, politicians have been largely able to get away with taking a short-term view when it comes to government policy. However, the world has become increasingly volatile and unpredictable, in turn demanding longer-term thinking and policies. It will take time to make the transition. But valuable time is lost when effective political action doesn’t materialize, leading to the loss of lost time, the application of ideas and wealth generation.

No national wealth production means no income re-distribution, a hallmark of a civilized and progressive society.

(Note to self: The United States of America is not one to emulate when it comes to the distribution of wealth.)

At the core of developing a country’s long-term competitive capacity is human capital development. That’s economist speak for a nation’s stock (or national capacity) of its population’s education, training, skills, work experiences. The higher the percentage of the population and the greater the depth of the array of skills, the stronger the nation’s human capital stock.

Within a country’s human capital stock is one critically important component: early childhood education. At the heart of developing our children, so that they may grow into well-functioning adults who contribute to a nation’s development, is the concept of Community. By this your correspondent is referring to citizens taking a strong interest in how children are cared for and raised, and their right to receive an equal education, regardless of socio-economic means. Unfortunately, in Canada and the U.S. (especially) early childhood education is a crapshoot for parents of more modest means, but almost assured for the upper middle class.

This is an urgent call for a different style of national leadership, one that looks to the long-term and is willing to take an uncompromising, principled approach to leading a country. It’s a hugely tall order. Politicians live day-to-day, patronizing the electorate, making unrealistic empty promises and running for cover when shit hits the fan. (Read the latter point as hiding behind political aides and civil servants, letting someone else take the fall.)

Currently, Canada is in a leadership vacuum. But then so, too, is the United States and a host of other Western, industrialized countries. Canada’s next federal election is set for October 19, 2015. At this point, the leadership pickings are thin. However, I'm impressed with New Democratic Party leader Thomas (Tom) Mulcair, a bilingual Montrealer who served as a cabinet minister in a previous Liberal government in Quebec.

A feisty, articulate trained lawyer of Irish descent, Mulcair seems to get it when it comes to the critical importance of caring for and developing children. It’s about an investment for the future of the country, in contrast to current Conservative Prime Minister Stephen Harper who sees issues such as this as a cost, an expense to be cut.

As noted at the outset of this post, there’s a lot at stake for any country that is not paying close attention to human capital development, the building of its human capital stock and, specifically, the learning and growth of its children.

It takes a special type of national leader who gets it and who’s willing to take a principled stand on his or her beliefs and vision for the country. Citizens who elect politicians who engage in short-term thinking, possess fuzzy visions of the future, and make empty promises are only contributing to their country’s eventual slide to obscurity.

Don’t let that happen on October 19.

Get out and vote.

It is not the gifts we’ve received over the years, the technology or superfluous things, but rather the time we have spent together that we remember and cherish.
– Loreena McKennitt (Canadian musician)

Jim Taggart has been a student of leadership for over 25 years. A recognized thought leader, his blog Changing Winds is read in over 160 countries. Jim worked for the Government of Canada for three decades as a senior economist and project manager. He subsequently did contract work on such topics as leadership, innovation and business succession planning. Be sure to visit his blog.