ABSTRACT
Human capital theory posits that formal education results in higher individual earnings, health, and productivity while attendant R&D investments support advanced human capital development and generate new knowledge; both are critical for economic growth (Becker 1962, 1964; Schultz 1963; Romer 1986, 1990; Mincer 1997). Resent research shows, however, that human capital investment is necessary but not sufficient to explain why some regions and countries experience rapid, dynamic growth while other countries are left with a yawning ‘innovation gap’.1
