Towards a smart, inclusive and sustainable development. Investment in human capital and innovation. An empirical analysis

Open access


The importance of a smart, inclusive and sustainable development as well as their main determinants had benefit in the last decades of an emergent attention both in the current evolution of the mix set of socio and economic policies as well as in the theoretical and empirical research development. The paper focuses on the role of investments in human capital and innovation, two closely interrelated variables, for a smart, inclusive and sustainable development, within the European Union countries. Our main research results show that, at the EU level, there are significant differences between less inclusive and sustainable developed countries and, correspondingly, between more inclusive and sustainable developed countries in terms of investments in human capital (expressed by the Global Human Capital Index and tertiary educational attainment), on one hand, and the national innovation systems performances (as illustrated by the Summary Innovation Index and R&D intensity), on the other hand. Moreover, the correlation and regression analysis results suggest that existing gaps between inclusive and sustainable development, manifested at the EU level, can be explained by the level of human capital optimization and innovation performances. Therefore, more attention have to be paid to take some specific actions, especially in the less inclusive and sustainable developed countries (such as Romania, Greece, Spain, and Portugal, called also emergent countries) in order to improve innovation performance and the leverage of the human capital for the benefit of both individuals’ themselves and of the whole economy for increasing the inclusiveness and sustainability of development.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • Acemoglu D. & Autor. D. (2012). What does human capital do? A review of Golding and Katz’s the race between education and technology. Journal of Economic Literature 50(2) 426-463.

  • Aghion P. & Howitt P. (1998). Endogenous Growth Theory. Cambridge MA: MIT Press.

  • Barbulescu A. (2012). Youth unemployment in Romania and measures to combat it. Procedia Economics and Finance3 1196-1201.

  • Becker G. S. (1964). Human capital: a theoretical and empirical analysis with special reference to education. Chicago: University of Chicago Press.

  • Claude D. & Hippe R. (2019). The long-run impact of human capital on innovation and economic development in the regions of Europe. Applied Economics 51(5) 542-563 DOI: 10.1080/00036846.2018.1495820.

  • De La Fuente Á. & Domenéch A. (2006). Human capital in growth regressions: how much difference does data quality make? Journal of the European Economic Association 2006 4(1) 1-36.

  • Eurofound (2017). In-work poverty in the EU. Luxembourg: Publications Office of the European Union.

  • EU (2012). Employment and Social Developments in Europe 2011. Retrieved from

  • EU (2018a). European Innovation Scoreboard 2018. Luxembourg: Publications Office of the European Union.

  • EU (2018b). Employment and Social Developments in Europe. Luxembourg: Publications Office of the European Union.

  • Eurostat database (2019). Retrieved from

  • Fagerberg J. & Srholec M. (2008). National innovation systems capabilities and economic development. Research Policy 37(9) 1417-1435.

  • Gupta J. Pouw N. & Ros-Tonen M. (2015). Towards an elaborated theory of inclusive development. European Journal of Development Research 27(4) 541-559.

  • Hanushek E. A. & Woessmann. L. (2011). How much do educational outcomes matter in OECD countries? Economic Policy 26 (67) 427–491.

  • Hanushek E. A. & Woessmann. L. (2012). Do better schools lead to more growth? Cognitive skills economic outcomes and causation. Journal of Economic Growth 17(4) 267-321.

  • Hanushek E. A. & Woessmann. L. (2016). Knowledge capital growth and the East Asian miracle. Science 351 (6271) 344–345.

  • Herman E. (2012). Education’s impact on the Romanian labour market in the European context. Procedia-Social and Behavioral Sciences46 5563-5567.

  • Herman E. (2014). Working poverty in the European Union and its main determinants: An empirical analysis. Engineering Economics 25(4) 427-436

  • Herman E. (2016). Productive employment in Romania: a major challenge to the integration into the European Union. Amfiteatru Economic18(42) 335-350.

  • Kelley D. J. Singer S. & Herrington M. (2016). The global entrepreneurship monitor. 2015-2016 Global Report. Retrieved from

  • Klenow P.J. & Rodriguez-Claire A. (2004) Externalities and Growth Handbook of Economic Growth. Amsterdam: North Holland Press.

  • Krueger A. & Lindahl M. (2001). Education for growth: Why and for whom? Journal of Economic Literature 39(4) 1101-1136.

  • Lane M. & Conlon G. (2016). The impact of literacy numeracy and computer skills on earnings and employment outcomes. OECD Education Working Papers No. 129 Paris: OECD Publishing.

  • Lucas R. (1988). On the mechanics of economic development. Journal of Monetary Economics 22 (1) 3-42.

  • Mankiw N. G. Romer D. & Weil D.N. (1992). Contribution to the Empirics of Economic Growth. The Quarterly Journal of Economics 107(2) 407-437.

  • Mincer J. (1958). Investment in human capital and personal income distribution. Journal of Political Economy 66(4) 281–302.

  • Naude W. & Nagler P. (2015). Industrialisation innovation and inclusion. UNU-Merit: Working Paper no. 2015-043.

  • OECD (2012). Innovation for Development. A discussion of the issues and an overview of work of the OECD directorate for science technology and industry. Retrieved from:

  • OECD (2018). Education at a Glance 2018.OECD Indicators Paris: OECD Publishing.

  • Osakwe P. & Moussa N. (2017). Innovation diversification and inclusive development in Africa. UNCTAD. Retrieved from:

  • Pelinescu E. (2017). The human capital and development. The Romanian case study. Working Papers of Institute for Economic Forecasting 170702 Institute for Economic Forecasting.

  • Riddell W. C. & Song X. (2011). The impact of education on unemployment incidence and re-employment success: Evidence from the U.S. Labour Market. IZA Discussion Paper No. 5572.

  • Romer P. M. (1990). Endogenous Technological Change. Journal of Political Economy 98 (5 Part 2) 71–102.

  • Sachs J. Schmidt-Traub G. Kroll C. Lafortune G. & Fuller G. (2018). SDG Index and Dashboards Report 2018. New York: Bertelsmann Stiftung and Sustainable Development Solutions Network (SDSN).

  • Suciu M.C. (2001). Investitia in educatie. Bucuresti: Editura Economica.

  • Suciu M.C. Postma E Năsulea C. & Năsulea D.F. (2018). Competitiveness & innovation within the creative economy. BASIQ International Conference: New Trends in Sustainable Business and Consumption - 2018 p. 431-437. Retrieved from

  • Szabo Z. K. & Herman E. (2012). Innovative Entrepreneurship for Economic Development in EU. Procedia Economics and Finance (3) 268-275.

  • Szabo Z. K. & Herman E. (2014). Productive entrepreneurship in the EU and its barriers in transition economies: A cluster analysis. Acta Polytechnica Hungarica11(6) 73-94.

  • UN. (2015). Transforming our world: the 2030 Agenda for Sustainable Development. A/RES/70/1. Retrieved from:

  • van Gent S. (2017). Beyond buzzwords: What is “Inclusive Development”? Synthesis report. Retrieved from

  • WB-World Bank. (2018). Learning to realize education’s promise. International Bank for Reconstruction and Development. Washington DC: World Bank.

  • WB (2019). World Development Report 2019: The Changing Nature of Work. Washington DC: World Bank.

  • WEF- World Economic Forum. (2017a). The Global Human Capital Report 2017. Geneva: World Economic Forum.

  • WEF (2017b). The Global Competitiveness Report 2017–2018. Geneva: World Economic Forum.

  • WEF (2018). The Inclusive Development Index 2018. Summary and Data Highlights. Geneva: World Economic Forum.

Journal information
All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 24 24 13
PDF Downloads 43 43 32