Human capital has been defined in different ways by various interest groups. In our view human capital is basically the capability of an individual to contribute some value to the community, employer or society he or she lives in. A higher level of human capital would enable even better value being created.

A human child may be described has having no human capital and is in need of support as it grows up in the community. The young child needs food, education, home and security as he or she grows up. The support comes from the parents, extended family, the local schools and perhaps government contributions where available. It actually consumes human capital.

With education at school and further learning at college or university, the young adult begins to acquire some ability that is beginning to be useful and valuable to a sustainable life in the community and society. The ability to read and count are foundation skills. This is enhanced further by specific learning of subjects that increase the capability to add value such as programming a computer, cooking for a restaurant, marketing and selling products, and driving an agricultural tractor at the farm, or teaching young kids at the local school. All these are called skills. These skills add value to life and is invaluable, and its now referred to as human capital here. These skills generate a salary or wage, or financial income.

It is useful to note that human capital creates financial capital that is usually recognized as crucial to enterprise and economic development traditionally. Through human efforts and skills, a person creates monetary value from work activities, and saves some of this value, to become financial capital for a commercial or industrial enterprise, or simply any business opportunity. As such perhaps we should see financial capital as a derivative of human capital.