“Wealth is not just what you own. It’s what you know, how you connect, and who you become.”
For decades, mainstream economics has taught us to measure prosperity through the narrow lens of financial capital—land, factories, investments, balance sheets. Yet a growing body of research, including a fascinating study from the Annals of the Constantin Brâncuși University of Târgu Jiu (2015), reminds us that the deepest engines of economic growth aren’t physical or monetary at all. They’re human.
Human Capital: The Knowledge Economy’s Core
The report highlights what pioneers like Schultz and Denison argued long ago: education, skills, and health—the essence of human capital—are not just individual assets but national growth drivers. In Romania, as in many countries, low investment in education (only 4.24% of GDP versus an EU average of 5.4%) correlates with weaker labour market outcomes and lower competitiveness.
But it’s not just about spending more on schools. It’s about ensuring that learning leads to better opportunities, higher incomes, and sustainable livelihoods. Human capital flourishes when individuals can apply their knowledge and talents productively in society.
Social Capital: The Glue of Prosperity
The study also points to the role of social capital—trust, networks, reciprocity, and civic engagement. These invisible bonds make cooperation possible, lower transaction costs, and strengthen the foundations of economic life.
Countries with strong social trust (like Finland or Germany) are better able to scale innovation, support large organisations, and deliver long-term growth. In contrast, nations with weaker trust and lower civic engagement face stagnation, even if their people are well-educated.
For Romania, decades of centralised rule left a trust deficit. Rebuilding social capital is as important as reforming schools. For all nations, this lesson holds true: skills thrive in socially rich environments.
Psychological Capital: The Hidden Catalyst
The third dimension, often overlooked, is psychological capital. Traits such as optimism, resilience, confidence, and hope don’t feature in GDP tables—but they are decisive for growth.
The study argues that in a world of constant change, technical skills alone are insufficient. People need the mental resilience to adapt, recover from setbacks, and seize opportunities. This is the “soft edge” of hard economics: self-belief and perseverance drive entrepreneurship, innovation, and ultimately, national prosperity.
The Holistic View: Capital Beyond Cash
Together, human, social, and psychological capital form a trinity of growth. They multiply one another:
- Human capital supplies the skills.
- Social capital builds the trust and cooperation to use them.
- Psychological capital empowers people to keep going, even in the face of uncertainty.
The Romanian study concludes that education and human capital policies will only deliver growth if they are coupled with social cohesion and personal resilience. In other words: investing in people means more than paying for classrooms—it means nurturing communities and character.
What This Means for Us
At the Academy of Life Planning, we see this as a call to rethink “wealth.” True prosperity isn’t measured by assets under management but by human potential unlocked, trust restored, and resilience built. When planners help people invest in their human, social, and psychological capital, they aren’t just guiding finances—they’re fuelling sustainable growth for families, communities, and nations.
The takeaway from this study is clear: The future belongs to societies that put people first.
Academy of Life Planning 