Human Capital: The Future Wealth of Nations—A Theoretical Study on the Kingdom of Bahrain

Abstract

In recent years, there has been a notable shift toward a knowledge-based economy, underscoring the importance of economic resources that are grounded in knowledge. This transition is particularly crucial for GCC countries as they strive to diversify away from traditional, oil-dependent economies. This necessity stems from the vulnerability of oil markets to price shocks, such as the significant disruption seen in 2014, which heavily influenced the economic stability of oil-exporting nations. This study employs a combination of theoretical and historical analyses, drawing extensively on contemporary theoretical literature including academic publications, scientific conference papers, and intergovernmental reports focused on human capital and the knowledge-based economy. It highlights Bahrain’s proactive efforts to diminish its reliance on oil by diversifying its income streams and investing in alternative economic resources, notably human capital. In pursuit of sustainable economic growth, Bahrain is implementing strategic initiatives to develop robust health and education infrastructures. These initiatives are critical as they aim to cultivate a competitive and innovative workforce, ultimately contributing to the economic well-being the nation seeks. Given the scarcity of scientific research on the knowledge-based economy in the GCC region, this study endeavors to explore the role of human capital in Bahrain. Moreover, it seeks to illuminate the vital importance of managing human capital and knowledge effectively to facilitate the transition toward a knowledge-based economy.