Question

Differenciate between physical capital and human capital

Answer 1

Answer:

Human capital refers to the capabilities, experience, and skill-sets that employees bring to a business organization. These capabilities, skill-sets, and experience contribute to the productivity of the employee. Simply put, the human capital of any given venture is the economic value that its employees add to it (1).

Physical capital, on the other hand, refers to all tangible, non-human, and man-made resources utilized in the production processes of goods and services. Examples of physical capital include business buildings and plants, vehicles and machines. Past educational background, ongoing professional related training, certifications, and employees’ networks make up human capital.

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