In an economy, the three fundamental components of production are human resources, land, and physical capital. The availability and efficient usage of these resources play a significant role in the economic growth and development of a nation. Human resources differ from land and physical capital in that they are intangible and have the ability to grow, learn, and create.
How Human Resources different from Other Resources?
Human Resources
Human resources are the people who work for a firm or organization. They are seen as a great asset to an organization since they have the necessary knowledge, skills, and competence to carry out numerous jobs and responsibilities. Human resources include both skilled and unskilled workers, managers, executives, and other personnel who help the firm run smoothly.
Examples
- Executives, managers, professional and unskilled workers, and administrative personnel are examples of firm employees.
- Consultants are independent contractors who supply services to the company.
- Trainers and coaches assist employees in improving their skills.
- Consumers who offer comments on the company’s products and services.
Land
Natural resources such as land, water, minerals, and forests are examples of land resources that are employed in the creation of goods and services. Several economic activities, such as agriculture, mining, forestry, and building, rely on land resources. These resources are finite and must be managed and conserved properly to ensure their long-term availability.
Examples
- Agricultural land is used to grow crops and raise livestock.
- Forests used for logging and animal conservation.
- Body of water utilized for fishing, transportation, and recreation.
- Gold, copper, and coal are examples of industrial minerals.
Physical Capital
Physical capital resources are tangible assets owned by a corporation or organization. Machinery, equipment, tools, buildings, and other physical infrastructure needed in the creation of goods and services are examples of these assets. Physical capital resources are necessary for an organization’s efficient operation, and their optimal exploitation can lead to greater productivity, profitability, and competitiveness.
Examples
- Computers, cars, and manufacturing tools are examples of machinery and equipment used in production.
- Buildings utilized for business operations, such as factories, warehouses, and offices.
- Roads, bridges, and power plants are examples of infrastructure used for transportation and energy generation.
- Patents, copyrights, and trademarks are examples of intellectual property used to protect innovations and brand identification.
Human Resources Vs Land and Physical Capital
Resource |
Definition |
Examples |
Key Characteristics |
| Land | Natural resources are found on or beneath the Earth’s surface. | Forests, minerals, oil, and natural gas. | It is a fixed resource and cannot be created or destroyed. |
| Physical Capital | Tangible assets are used in the production of goods and services. | Machinery, equipment, buildings. | It can be created and destroyed, and its value depreciates over time |
| Human Resource | The knowledge, skills, and abilities of people are used to produce goods and services. | Labor, talent, education. | It is a flexible resource that can be developed and enhanced through education and training. |
Key Differences
- Human resources are malleable and may be developed and improved via education and training, whereas land and physical capital are not.
- Human resources can think, make decisions, and innovate, whereas land and physical capital cannot.
- Human resources can be transported from one area to another, while land and physical capital are not.
- Only human resources have a direct impact on the quality of goods and services produced; land and physical capital have an indirect impact.
Conclusion
Resources like land and physical capital cannot compare to the tangibility, growth potential, and inherent value of human resources. They are an essential resource for economic growth and development, and their effective use can benefit society greatly.
FAQs on Human Resources
Q 1. What are human resources?
Answer-
Knowledge, skills, and capacities of individuals that can be used to produce goods and services are known as human resources. The labour, talent, and expertise of society are referred to as its human resources.
Q 2. What role do human resources play in an organization?
Answer-
Human resources are essential to the operation of every business. They are in charge of managing and developing the workforce, finding and employing new employees, providing chances for training and development, and ensuring compliance with labor laws and regulations.
Q 3. Why is physical capital important?
Answer-
Physical capital is vital for an organization’s efficient operation since it supplies the infrastructure, equipment, and tools required for the creation of goods and services. Effective use of physical capital can lead to enhanced production and profitability, higher product and service quality, and greater market competitiveness.