Summary

The human capital theory emphasizes the importance of education and training to improve worker skills and productivity in the dynamic global knowledge economy and 21st-century capitalism. In Asia, development assistance modalities and contents required for human capital development, such as higher education projects and skill development projects, are implemented by emerging Asian donors alone and through their collaboration with international counterparts. According to the Asian experience, there are four key points. First, the various Chinese, Indian, and other Asian development experiences affirm that different developing countries require different combinations of basic and high skills in the 21st century. Accordingly, the distribution and mobilization of official development assistance (ODA) in human capital development must depend on culturally and contextually specific assistance projects designed for different developing countries. Second, all stakeholders in the skill ecosystem, which includes donors, recipient governments, education institutions, firms, and individuals, must assume responsibilities for not only balancing the skill demand and supply but also sustaining positional competition in the local and global job markets. Third, the system underpinned by innovative financing from the private sector, emerging donors, as well as traditional Organisation for Economic Co-operation and Development (OECD) donors must focus on inclusive and sustainable economic development rather than economic accumulation and gross domestic product (GDP) growth only. Finally, higher education institutions should play a more critical and active role in providing international development assistance to empower skilled and competent individuals as change agents to work for/in, guide, and lead the skill ecosystem, which eventually will not only respond to economic demands in the short term but also promote economic transformation in the long run.