Chapter Two

The Era of Human Capital Has Finally Arrived

Edward E. Lawler III

Why did the era of human capital take so long to arrive and why is it happening now? There is no single reason why it has finally happened, but it is possible to identify some key technological, political, and economic changes that have combined to make human capital a critical and nearly universally acknowledged element in the effectiveness of organizations. The growth rate in scientific and technological knowledge is one key driver that has contributed to the growing importance of human capital. The growth of knowledge continues to accelerate; it has changed the very nature of what organizations need to do, the type of products they produce, and how they produce ...

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