The Role of Human Capital Development in Economic Growth: A Firm-Level HR Analysis

Abstract

Human capital development has increasingly been recognized as a key driver of economic growth, especially in knowledge-based economies. This study explores the relationship between firm-level human capital development initiatives and broader economic outcomes. Focusing on human resource (HR) strategies such as employee training, skills upgrading, and talent retention, the research investigates how investments in people translate into productivity gains and economic performance. Using both quantitative data from a sample of firms across multiple sectors and qualitative interviews with HR professionals, the study identifies key HR practices that contribute to firm-level growth, which, in aggregate, influence national economic development. The findings suggest that firms with structured and continuous human capital development programs experience higher employee productivity, innovation, and profitability, reinforcing the notion that workforce development is a cornerstone of sustainable economic progress. The paper concludes with policy implications for both private sector HR planning and government education and labor policies.