Research On The Effect Of The Entrepreneur Human Capital In Henan Province On The Economic Increase

With the arrival of the knowledge economy age, the modern economy has already entered the period that based on human capital instead of physical capital. Theory and practice has confirmed that human capital is the engine of economic growth and the key factors that can narrow the regional economic development gap between countries. Since reform and opening up, there has been a breakthrough in Henan province’s economic development. The gap between Henan province and the average level of national is gradually narrowed. Especially, the Gross Domestic Product of Henan province has been the fifth ten years over the whole nation. However, compared with other provinces in central part, Henan province is left behind in the economic development.From the perspective of per Gross Domestic Product, Hubei province ranked the seventeenth in year2006and later rises to the13th in year2010. While Henan province finally down to twenty-first in year2010compared with the sixteenth of year2006. What factors restrict the development of Henan economy? What’s the driving force of economic increase in Henan province? To examine these problems, this article builds a hierarchical model from the perspective of entrepreneur human capital, which including common human capital and entrepreneur human capital based on Solow model. Then after selecting the production elements’time series data of Henan province from1992to2007, we describe the contribution of physical capital and entrepreneur human capital in economic growth by quantitative analysis. This is the following main conclusions:Firstly, at present, Henan province has a rapid economic development speed, but capital accumulation is still the main driver of economic increase. The contribution of capital comes up to47.03%and the pattern of economic increase of Henan province still belongs to crude production model, which is consistent with previous research.Secondly, the entrepreneur human capital has significantly positive effect on economic increase. Since1992, the entrepreneur human capital has increased at a high speed. Its direct contribution to economic growth has been dramatic increased from10.95percent to17.14percent, which is significantly faster than the average direct contribution of human capital. It shows that the advantage of entrepreneur human capital is gradually revealed in Henan province. Thirdly, the entrepreneur human capital and economic increase is not coordinated in Henan province. The contribution coefficient of physical capital, labors and entrepreneur human capital is less than1. Actually common labor and entrepreneur human capital play a positive role in Henan economic increase, but the three elements lack of economies of scale. Discordant between industrial structure, capital structure and the way of economic increase may leads to many contradictions and problems.Through these examination and analysis, the author analyzes the constraints of economic increase in Henan province from the view of the element inputs, and finds that there have been some shortcomings in industrial structure, human capital accumulation as well as human capital structure. What’s more, we puts forward some constructive suggestions from four aspects to deal with the problems in economic development, which includes diversity the main body of human capital, increase investment in education, optimize the structure and growing-up environment of entrepreneur human capital.