Question

9. What is difference between working capital and
human capital?

Answer 1

Answer:

>Physical capital

• Physical Capital, is used to mean, the company’s non-human assets like plant and machinery, building, computers, office supplies etc. that assist in the production of goods and services.
• Physical capital is tangible in nature, i.e. it can be seen and touched.
• The creation of physical capital is an economic and technical process.
• Physical capital can be sold in the market directly.
• Physical capital can be separated from its owner easily. On the other extreme,
• Physical capital is usually mobile, but some restrictions occurs out of trade barriers imposed by different countries.

>Human capital:

• Human capital is defined by collection of knowledge, talent, skills and abilities possessed by an employee or a group of employees working in an organization.
• Human capital is intangible, that can only be experienced.
• The formation of human capital is a social process, but it is also a result of conscious decisions taken by the entrepreneur in this regard.
• Human capital cannot be traded in the market, rather the services are sold.
• Human capital is inseparable from its possessor.
• When it comes to the mobility of human capital, it is not fully mobile between countries, as the mobility is restricted by nationality and culture.