New Delhi, Sept. 28 -- With protectionism and industrial policy returning to advanced economies, and with geopolitical tensions on the rise, this is an inauspicious moment for trade-led growth strategies. Since future growth will increasingly depend on sound domestic policies, low- and middle-income countries should focus on ensuring that existing resources are fully and efficiently deployed. And no resource is more valuable than human capital.

While economists and policymakers have long recognized the accumulation of human capital-particularly through investments in education-as a driver of growth and development, they have devoted far less attention to the efficient allocation of existing human capital. An economy at any level of devel...