Germany and the United Kingdom are good examples of how investments in human capital and
capital goods can lead to economic strength. Germany and the UK provide public education, and 99
percent of their citizens can read and write. Universities and vocational schools train people to be
productive members of the workforce. In addition,
both countries invest billions of dollars each year to
update factories, maintain infrastructure, and
support advances in technology.
In contrast, Russia has suffered serious financial
difficulties since the collapse of the Soviet Union in
- Years of low capital investment under
Communist rule left manufacturing plants with old,
outdated technology. Despite a high literacy rate
of 99 percent, Russia’s workers were not trained
with the skills needed by the country’s new
economy. Unemployment became a serious
problem that led to slower economic growth.
Since the early 1990s, Russia has invested billions
of dollars to update its factories and train its
workforce. As a result, Russia’s economy has
improved dramatically since 1991. However, its
GDP per capita remains lower than in other
industrialized nations.
Assess Your Understanding
GDP Per Capita (2015) for
Select European Countries
Belgium $43,584
Bulgaria $20,097
France $41,180
Germany $46,893
Italy $35,708
Poland $26,455
Russia $25,410
Spain $34,819
Switzerland $58,551
Ukraine $7,970
United Kingdom $41,180
Answer the questions using what you have learned as well as the chart showing GDP data for select countries
in Europe. - How have investments in capital and human capital contributed to high GDP per capita in
Germany and the United Kingdom?
- What challenges did Russia face after the collapse of the Soviet Union in 1991? What changes
is Russia making to improve its economy and increase GDP per capita?
- Which two countries listed in the chart have the lowest GDP per capita?
- What can you infer about these countries’ investments in education and capital goods?