A nation’s human capital endowment—the skills and capacities that reside in people and that are put to productive use—can be a more important determinant of its long term economic success than virtually any other resource. This resource must be invested in and leveraged efficiently in order for it to generate returns—for the individuals involved as well as an economy as a whole. Because human capital is critical not only to the productivity of society but also the functioning of its political, social and civic institutions, understanding its current state and capacity is valuable to a wide variety of stakeholders. (HCR, 2016:1).

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The number of member states reached to 28 with the accession of Croatia to the European union (EU) accomplished in 2013, the population of the EU is about 510.1 million people as of 1 January 2016. The most populous member state is Germany, with an estimated 82.1 (16%) million people, and the least populous member state is Malta with 0.4 (0.07%) million. The European union is the second largest economy in the world (if treated as a single country) in nominal terms and according to purchasing power parity (PPP). The European union's GDP was estimated to be €16.5 trillion (nominal) in 2016 according to the international monetary fund, representing 22.8% of nominal global GDP (IMF, 2016). Germany has the biggest share and Malta has lowest share in the GDP.

 

This study measures the human capital performance of 28 member states of the EU in 2014 by a TOPSIS method, based on multi criteria decision making (MDCM) approach. Seven human capital criteria have been used to evaluate the performance of each country. TOPSIS is applied for different purposes. For instance, Agrawal et al. (1992) used TOPSIS for selection of grippers in flexible manufacturing.

 

Agrawal et al. (1991) applied TOPSIS for robot selection. TOPSIS was also applied for financial investment in advanced manufacturing systems by Kim et al. (1997). In other manufacturing applications, Chau and Parkan (1995) used it in a case selecting a manufacturing process. Parkan and Wu (1999) used TOPSIS in an application selecting robotic processes. TOPSIS has also been used to compare company performances by Deng et al. (2000) and financial ratio performance within highway bus industry by Feng and Wang (2001). Karimi et al. (2010) applied TOPSIS to examine the location decision for foreign direct investment in ASEAN countries. Dincer (2011) applied TOPSIS and WSA (weighted sum approach) in analysis of economic activities of European union member states and candidate countries. Sieng and Yussof (2015) used a fuzzy TOPSIS method in comparing the performance of Malaysian human capital with other countries. Balcerzak and Pietrzak (2016) applied TOPSIS method to examine the progress achieved by European countries in the field of implementing the concept of sustainable development.