“Invest in gold. Invest in metals, commodities, and oil. But do we say, ‘Invest in your children,’ enough?”

— Dr. James Barth

The Harbert College is dedicated to advancing scholarly impact and reputation of faculty through promotion of and support for industry and academic engagement. Thought leadership that impacts lives and helps business prosper is an important  avenue.

How can businesses worldwide grow and prosper while navigating the COVID-19 pandemic? According to Dr. Jim Barth, Lowder Eminent Scholar in Finance at the Harbert College of Business, human capital, that is a healthy and educated population, should be the focus of policy.

“It’s not the buildings and it’s not the equipment, because without people those buildings and equipment are of no use whatsoever,” said Barth. “We have to focus on building our human capital. What does that mean? Policy makers have to emphasize the importance of proper nutrition and adequate exercise as well as proper etiquette during a pandemic such as social distancing and wearing masks.”

Barth, an expert on bank performance and regulation, gave a live online presentation, “How COVID-19 is Changing the Global Economy,” on June 16. He put the pandemic into context, discussed government reactions, ensuing economic/financial effects, and impact on global trade. But he turned to human capital as the ultimate resource necessary for economic growth and for helping mitigate the serious adverse effects of COVID-19.

“We teach courses on investment at universities everywhere, but we don’t even mention that the most important investment is in human capital. Universities should emphasize investing in people, not only talk about investing in stocks and bonds, and real estate,” Barth added.

“Invest in gold. Invest in metals, commodities, and oil. But do we say, ‘Invest in your children,’ enough? Invest in your health by proper nutrition and a proper exercise routine. If we had done this to a greater degree, the number of serious outcomes would probably be less horrific than it turned out to be.”

Barth compared COVID-19’s impact on the national economy to the Great Depression and found an interesting difference. “What we are experiencing today with COVID-19 is a major health shock,” he said. “With the Great Depression, we didn’t have a human health crisis. It is a different type of event, a health shock rather than an economic shock. As a result, our government, and those in other countries, shut down large segments of economic activity. They locked down people in their homes, with trips limited to essential businesses. That has been devastating from an economic standpoint. Not surprisingly, there are now about 45 million people who have filed for unemployment benefits. The time has arrived, however, to reopen our economy and let businesses and individuals get back to work safely.”

“It’s had an effect that was never really contemplated for a country like the United States,” he added. “We never anticipated something like this would happen and it did happen. Now we want people to change their behavior like engaging in social distancing. The speed and strength of economic recovery is going to depend on people and firms spending again without social distancing being a major obstacle. Of course, a treatment for the coronavirus to minimize, if not eliminate, the worst outcomes and a vaccine to prevent another outbreak of COVID-19 would be a game changer for economies worldwide."