Modeling the Contribution of Network Human Capital to Economic Dynamics and Innovation Activity

Abstract

Purpose of the study. This article analyzes the contribution of network human capital to economic dynamics and innovation through econometric modeling based on data for 70 countries for 2020–2021. The main goal of the study is to analyze the relationship between network human capital, economic development and innovation activity.Materials and methods. The present study is based on feedback methodology. On the one hand, the development of human capital is a strategic factor in sustainable economic development. On the other hand, economic resources that increase under development conditions are invested in human capital. The authors have developed a two-stage method for assessing the contribution of network human capital to economic dynamics and the development of innovation. At the first stage, the influence of human capital on the factors of innovative development, assessed by the indexes of the Global Innovation Index (GII), was assessed. At the second stage, an assessment of the contribution of these factors to GDP per employee was modeled. The method was implemented through the development of econometric models that allow assessing the contributions of network human capital to economic dynamics based on the profile of the national economy and assessing the dependence of GDP per employee on the employment structure of the national economy.Results. Based on the results of econometric modeling, the impact of human capital accumulation on the innovative development of the economy was assessed. Statistically significant relationships between: an increase in human capital and the acceleration of the pace of development of new technologies and the knowledge economy; development of creative activity; increasing innovative ties have been identified and substantiated. Based on the modeling results, we empirically assessed, firstly, the contribution of network human capital to GDP per employee; secondly, the increasing contribution of new industries to GDP per employee and the decreasing contribution of traditional industries (using the example of agriculture); thirdly, the more significant contribution of those employed in IT compared to the contribution of those employed in education and healthcare to GDP per employee.Conclusion. The results of the modeling proved that network human capital influences economic growth and innovative development through two mechanisms. Firstly, network human capital is directly involved in the production processes of the platform economy as a factor of production. In this sense, the accumulation of network human capital directly increases aggregate output. Secondly, the accumulation of network human capital has a positive effect on classical factors of production and, in particular, contributes to technological progress.