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When resources are scarce, human capital becomes a vital resource for success. In entities where resources are scarce - such as small non-natural resource economies like Hong Kong or Singapore, or capital-short entrepreneurial firms - human capital becomes a vital resource for success. Human capital consists of the education, experience, knowledge and skills of people. Investors, when deciding whether or not to put money in a start-up, usually attach high importance to the experience of the entrepreneur in determining its potential. Similarly, it's been found that venture capitalists cite management skills and experience of the recipient firm most frequently as the key criteria in their funding decisions. These are indications of the importance attached to human capital, especially for entrepreneurial firms. Such importance may be amplified as the work environment increasingly engages in more knowledge-intensive activities.
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