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1 INTRODUCTION 1- Necessity of the thesis Resources used for production include labours, equipments, material, land and others, among that labours play a decisive role for development. Human capital belongs to the labour resource and it is the core of this resource. Nowadays, countries all over the world in general and in Vietnam in particular is transferring into the knowlegde economy, the economy much bases on intelligence in order to develop. In this economy, the most precious resources are the intellectual assets and the intelligence in enterprises. In order to promote the sustainable development of enterprises in the knowledge economy, human capital plays a decisive role so that we need to research to find out the ways to have the high quality of human capital meeting our country’s demand of industrialization and modernization next. Vietnam garment enterprises have grown strongly in export turnover recent years. However, according to the statistical data of some Ministries and Branches, although Vietnam garment enterprises have been equipped with modern equipments and technology not worse than other countries in the area but the labor productivity of them is still much lower, do not create their own brands of export products so they can not make products that contain high intellectual. This is the reason why Vietnam garment industry makes little added value and labours usually must work overtime. The main causes are : - Firstly : although the garment industry has been equipped with modern equipments but because of 2 characteristics of garment industry, the equipments can not replace entirely the skills of human resource. The mode of production of garment industry is mainly the semiautomatic so the skills, the training level and the experience of labours play a big role in having high productivity. In other words, the quality of human capital of garment enterprises influence strongly the labour productivity and if the quality of human capital is not suitable than we will not increase the labour productivity of garment enterprises. - Secondly, The quality of human capital influence strongly the creation in business, especially in garment industry because if garment enterprises want to survive, they must manufacture the highly fashionable products. Obviously, the quality of human capital of garment enterprises is very low so the added value of garment products can not be high as the management’s expectation. Human capital and quality of human capital have been mentioned on some researches in the world since 1960 but these matters are new and have not been researched systematically in Vietnam. According to the Strategy for the Development of Vietnam’s Textile and Garment Industry by 2015 and Orientations by 2020 which has been approved by Prime minister dated 10/03/2008, one of the important orientations is “Focusing on developing and enhancing the competitive ability of the garment industry in term of export in order to utilize the market opportunity”. To implement the policy mentioned above, we need some researches to solve the necessary matters of the human capital as well as the quality of human capital of the 3 garment industry and this is the purpose of the thesis ”Enhance the quality of human capital of Vietnamese garment enterprises” 2- Literature review At enterprise level, human capital has been acknowledged that it affects strongly the individual productivity (Schultz 1961a, b; Becker, 1962) and recently, more and more people believed that the human capital affects the competitiveness of enterprises (Davenport, 1999; Teixeira, 2002; Phillips, 2005; Griffith, 2006; Dinh Viet Hoa, 2009). Some researches on human capital of some authors of Vietnam and overseas have mentioned fulltime training, off the job training as the factors creating general human capital; on the job training helped to create the specific human capital (Becker, 1962; Tran Tho Dat and Do Tuyet Nhung, 2008). Borjas (1996) in the book “Labour Economics” has developed the theory of accumulation of human capital and the return rate in education. Few researches have mentioned the quality of human capital. The Polish economist used the difference of salary as the measurement to compare the quality of human capital between America and Poland (Cichy and Malaga, 2006). So the questions that the thesis must answer are : what is the quality of human capital ? What criteria can we use to assess the quality of human capital ? 3- Purpose of research - Clear concepts and arguments of human capital, the quality of human capital and criteria to assess the quality of human capital of garment enterprises. 4 - Based on researching the current situation of human capital of Vietnam garment enterprises, thesis clears the advantages and disadvantages of the human capital as well as processes to create the human capital of garment enterprises. - Build the new criteria to assess the quality of human capital of garment enterprises; Assess the current quality of human capital of garment enterprises according to the criteria showing the quality of human capital. - Propose the solutions to enhance the quality of human capital of garment enterprises. 4. Scope and object of research - Research object of the thesis is the quality of human capital of Vietnamese garment enterprises. - Research scope of the thesis including : + Scope of space : garment enterprises in Vietnam + Scope of time : from 2000 to now + Scope of content : research the matters related directly to human capital, quality of human capital 5- Research methodology Survey, analyze and synthesize the statistical data, interview specialists. 6. The new contribution of the thesis - The new academic and theoretical contributions + The previous researches on the quality of human capital have not started from the nature of the quality of human capital, instead of that, they started from the measurements so the academic system of these researches is not perfect. To repair this disadvantage and lay the solid foundation of researching the quality of human capital, the thesis has developed the definition 5 of the quality of human capital as following : Quality of human capital is the degree to which a set of characteristics of human capital make human capital able to fulfill the proposed or implicit needs. + Based on 4 characteristics showing the quality of human capital and the features of human capital of Vietnam garment industry, based on the models and the definition of human capital developed above, the thesis has proposed 7 new criteria to assess the quality of human capital of garment enterprises. Those are : Financial investment in education, schooling years, number of years of working experience, average earnings, increasing rate of earnings, labour productivity, labour turnover. + Based on the results of the specific researches on the quality of human capital of Vietnam garment enterprises, the thesis has found out that there are 6 factors which affect the quality of human capital of garment enterprises. Those are : full- time training, enterprise management, human capital needs of enterprises, demography, circumstance of family and policies of government. - The new findings and recommendations drawn from the research results + The thesis assessed the quality of human capital of Vietnam garment enterprises according to the 7 criteria proposed above and found out that the quality of human capital of Vietnamese garment enterprises was very low. + The research results show that there are 5 strategies to invest in the human capital of garment enterprises, but if we want to enhance the quality of human capital, the optimal solutions are : The big enterprises should use the strategy of 6 investment in the human capital whenever remaining the profit, the small and medium enterprises should use the strategy of investment in the human capital according to the benchmarking way. + The thesis proposed to upgrade data of job and task analysis of the garment industry into information capital in order to improve the quality of human capital of garment enterprises. Through research, the thesis draws the conclusion that : we need to create a knowledge market inside the garment enterprises to spread the knowledge products in order to expand the applied scope of the knowledge and skills to enhance the quality of human capital of garment enterprises. + In order to enhance the quality of human capital during the process of creating it, the thesis proposed the state to do research to identify the model of activity of the state owned colleges which belong to equitized enterprises as Vietnam textile and garment group; in addition, the thesis also proposed the government to allow to establish the university of the textile and garment industry. 7. The layout of the thesis Apart from the instruction, conclusion and the reference materials, the thesis is divided into three chapters : Chapter 1 : Scientific argument on human capital and the quality of human capital of garment enterprises (64 pages) Chapter 2 : Current situation of human capital and the quality of human capital of garment enterprises (72 pages) Chapter 3 : Solutions to enhance the quality of human capital of garment enterprises (46 pages) 7 CHAPTER 1: SCIENTIFIC ARGUMENT ON HUMAN CAPITAL AND THE QUALITY OF HUMAN CAPITAL OF GARMENT ENTERPRISES 1.1 Definition of human capital 1.1.1 The point of view of employees are assets of firms The point of view of employees are assets of firms mentioned 2 matters respectively but related to each other. Firstly, this point of view dignified employees because it emphasized the value which the employees contributed to enterprises. Secondly, this point of view may cause misunderstanding that enterprises owned the employees. 1.1.2 Definition of human capital 1.1.2.1 Definition of human capital Human capital is the aggregation of skills, working experiences, training level and the exploited ability of employees. 1.1.2.2 The point of view of employees are investors There are 2 ideas emphasizing employees are investors: Owning and controlling human capital : employees themselves, not organizations own human capital. Rate of return : employees act as investors and they will invest their capital where the rate of return is the highest. 1.1.2.3 Features of human capital General features of human capital : human capital is a non-tradable good; individuals do not usually control the way and the speed by which they obtain human capital; human capital has the qualitative and quantitative aspects; human capital can be general or specific; it contains the external effects. Particular features of human capital of garment 8 enterprises: specific human capital of new employees are usually zero; employees came from rural areas; a lot of employees are female; a lot of employees are not local; human capital of managers and technicians is quite stable but low. 1.1.3 Measurements of human capital 1.1.3.1 Employee capability a- Experience: Measured by the number of working years. b- Knowledge : Percent of income used to research and develop c- Learning : Measured by the new knowledge and skills d- Competencies: Measured by self-assessment of employees, organization. e- Educational level : Measured by the number of learning years 1.1.3.2 Human capital investment a- Finance the field of human resource b- Finance the human capital including the field of human resource, the salary and the benefits of employees. 1.1.3.3 Productivity Measured by the output of an employee, an hour… 1.1.3.4 Compensation and benefits a- Compensation : measured by the total compensation for all employees or the compensation for an employee. b- Benefits of employees : measured by the total benefits. c- Variable compensation: Compensation on variable pay plan 1.1.4 Relation between human capital of individuals and human capital of enterprises: human capital of enterprises is made up of human capital of individuals, so researching the whole forming process of human capital of individuals is needed to research human capital of enterprises. 9 1.1.5 Differences between human resource and human capital Table 1.1 : Compare human resource with human capital Human resource Human capital - Employees are the human resource of an organization - Employees are the investors - The role of employees is p assive - The role of employees is ver y active - Research the man who has enough legal ages to work - Research all process of forming human capital from being born. - Can not value human resource - Can value human capital 1.1.6 Differences between human capital and physical capital Table 1.2 : Compare human capital with physical capital Item Human capital Physical capital Property right - Can not separate the owner - Can separate the owner Characteristic - Intangible - Tangible Marketability - There is no market to exchange - Can exchange Decision o f accumulating - Many subjects such as parent, organization, individual decide - Managers decide Process o f accumulating - Less present-oriented, depend on external effects - Present-oriented more Mobility - Depend on the adaptive ability of employees. - Depend on restructured and globalized periods Depreciation - Do not lose entirely when employees die because a part of human capital can be transmitted to other generation - Lose entirely when it can not be used Ability to be financed - More difficultly because it is very risky. - Easier because it is easy to be seized, sold, jointly owned… Return -Employees are active to create the returns for themselves - Owners accept the returns of the market 10 1.2 Human capital models 1.2.1 The Schooling model Supposing that W COL is the sign of earnings of college graduates, W HS is the sign of high school graduates, H is the sign of cost for one year learning in a college. Present value of earnings stream if the employee only gets a high school diploma is : ∑ = + = + +++ + + + += 46 0 462 )1()1( )1( )1( t t HSHSHSHS HSHS r w r w r w r w wPV (1-1) Present value of earnings stream if the employee gets a college diploma is : 465432 )1( )1()1()1()1( )1( r w r w r w r H r H r H HPV COLCOLCOL COL + +++ + + + + + − + − + −−= (1-2) Post-college earnings strea m Direct cost of learning in a colle g e ∑∑ == + + + −= ( 46 4 3 0 )1()1 t t COL t t r w r H Source : [58] The marginal rate of return to schooling is calculated as following : %∆w ∆w/∆s Percentage change in earnings = = (1-3) ∆s W Source : [58] The schooling model find out “the stopping rule” that tells a worker when he should leave the school. That is : Quit school when the marginal rate of return to schooling = r (1-4) 1.2.2 The human capital model of Mincer 1.2.2.1 Age-earnings stream [...]... thesis has proposed 7 new criteria to assess the quality of human capital of Vietnamese garment enterprises 13 CHAPTER 2 : CURRENT SITUATION OF HUMAN CAPITAL AND THE QUALITY OF HUMAN CAPITAL OF GARMENT ENTERPRISES 2.1 The overview of Vietnam garment industry From 2000 to 2011, the average growing rate of export turnover of Vietnam garment industry was 21,3% In 2011, garment industry used 970.660 employees... of employees working in garment enterprises; policies of the government as well as Vietnam textile and garment association and Vietnam Textile and garment group CONCLUSION OF CHAPTER 2 Chapter 2 has assessed the current situation of building the specific human capital and assessed the quality of human capital of Vietnam garment enterprises according to 7 criteria mentioned in chapter 1 During the assessment,... garment enterprises Chapter 3 also proposed 6 solutions to enhance the quality of human capital of garment enterprises which related to the role of the State, Vietnam Textile and Garment Association, Vietnam Textile and Garment group and Vietnam garment enterprises 22 CONCLUSION Enhancing the quality of human capital will help the garment enterprises to build and remain the advantages of competitiveness... capital of garment enterprises must be suitable to integrate into the world 3.1.4 Enhancing the quality of human capital of Vietnam garment enterprises must be implemented synchronically from building human capital and identifying its demand needed to develop comprehensively Vietnam garment enterprises 3.1.5 Enhancing the quality of human capital of garment enterprises must be suitable with the progress... Solutions to enhance the quality of human capital of Vietnam garment enterprises 3.2.1 Improving the process to build human capital for garment industry The educational organizations which provide the human 20 resource training for garment enterprises must improve identifying training needs in order to be suitable with the strategy to develop Vietnam textile and garment industry by 2015; enhance the quality,... order to enhance the quality of human capital of Vietnam garment enterprises 3.3.1 Recommendations to the State : Facilitating the land for the investment of garment enterprises in rural, decreasing the tax for the enterprises using a lot of employees, creating the channel for the convenient circulation of human capital 3.3.2 Recommendations to Vietnam Textile and Garment Association : Creating the channel... and helped to illustrate the picture of the quality of human capital of a typical garment enterprise in Vietnam garment industry nowadays 19 CHAPTER 3 : SOLUTIONS TO ENHANCE THE QUALITY OF HUMAN CAPITAL OF GARMENT ENTERPRISES 3.1 The viewpoints aim to enhance the quality of human capital of Vietnam garment enterprises 3.1.1 Heighten the garment enterprises’ awareness of roles of human capital and its... quality of human capital of Vietnam garment enterprises, the thesis has found out that there are 6 factors which affect the quality of human capital of garment enterprises Those are : fulltime training, enterprise management, human capital needs of enterprises, demography, circumstance of family and policies of government 4 The thesis assessed the quality of human capital of Vietnam garment enterprises according... identify the model of activity of the state owned 24 colleges which belong to equitized enterprises as Vietnam textile and garment group; in addition, the thesis also proposed the government to allow to establish the university of the textile and garment industry 8 Some opened matters of the thesis which may be continued to research are : a- Researching the rate of return of human capital of garment enterprises... the quality of human capital of garment enterprises is low 2.4 The quality of human capital of Garment company 10Joint Stock company To show clearer the picture of the quality of human capital of Vietnam garment enterprises as well as to illustrate clearer the criteria used to assess the quality of human capital of garment enterprises, the thesis has chosen Garment company 10 as a typical garment enterprise . next. Vietnam garment enterprises have grown strongly in export turnover recent years. However, according to the statistical data of some Ministries and Branches, although Vietnam garment. matters are new and have not been researched systematically in Vietnam. According to the Strategy for the Development of Vietnam’s Textile and Garment Industry by 2015 and Orientations by 2020. the quality of human capital of Vietnamese garment enterprises. - Research scope of the thesis including : + Scope of space : garment enterprises in Vietnam + Scope of time : from 2000 to

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