by Er Suhaib Bakshi
Germany and Japan show that long-term development depends less on infrastructure and more on sustained investment in education, skills, and human capability, driving productivity and economic participation
Discussions about development often begin with what is most visible, such as infrastructure, technology, and industrial growth. These features matter, but they are usually the outcome of deeper, less visible processes. The experiences of Germany and Japan suggest that enduring progress is rooted not only in what is built, but in what is developed within people, their capacity to learn, to adapt, and to participate meaningfully in economic and social life.
Germany and Japan today rank among the world’s high-income economies. According to the World Bank World Development Indicators, Germany’s economy reached approximately 4.6856 trillion US dollars in 2024, while Japan’s stood at about 4.0276 trillion US dollars. GDP per capita was 56,103.7 US dollars in Germany and 32,487.1 US dollars in Japan in the same year (World Bank, 2024). These figures reflect high levels of productivity, but they are more fully understood when viewed alongside broader measures of human development.
The Human Development Report 2025 Statistical Annex, published by the United Nations Development Programme, places Germany’s Human Development Index at 0.959 and Japan’s at 0.925, with life expectancy at birth of 81.4 years in Germany and 84.7 years in Japan (UNDP, 2025). These indicators point to sustained improvements in health, education, and living standards, and to the expansion of what individuals are able to do and achieve over time.
Historical data help situate these outcomes within a longer trajectory. Long-run estimates compiled by the Organisation for Economic Co-operation and Development, based on Angus Maddison’s dataset, show that Germany’s GDP per capita rose from about 3,881 in 1950 to 11,966 in 1973, and to 15,929 by 1990. Japan’s increase over the same period was more pronounced, rising from 1,921 in 1950 to 11,434 in 1973 and to 18,789 by 1990 (OECD, Maddison Historical Statistics). These shifts reflect the steady strengthening of productive capabilities across successive generations.
Education has been central to this process because it shapes how people acquire and use knowledge. In Germany, vocational education and training combine classroom instruction with practical experience, linking learning directly with work (OECD, Skills Strategy Germany). In Japan, general education has been associated with strong learning outcomes. In the OECD’s Programme for International Student Assessment 2022, 23 per cent of students in Japan were top performers in mathematics, compared with an OECD average of 9 per cent (OECD, PISA 2022). These outcomes reflect the development of foundational skills across the population.
Education also extends beyond formal instruction. It includes how individuals learn to function within shared environments. In Japan, school routines often involve group-based activities and shared responsibilities as part of daily school life (OECD education reviews; UNESCO observations). In Germany, structured academic and vocational pathways introduce expectations related to responsibility, participation, and reliability within organised settings (OECD, Skills Strategy Germany). These aspects of education shape habits that support participation in wider social and economic life.
Learning continues beyond early education. OECD Survey of Adult Skills data show that both Germany and Japan perform above the OECD average in literacy and numeracy among adults (OECD, Survey of Adult Skills 2023), indicating that capability is sustained and developed over time.
Higher education contributes to the further expansion of these capabilities. OECD data indicate that tertiary attainment among young adults is approximately 66 per cent in Japan and around 40 per cent in Germany (OECD, Education at a Glance 2025). These figures reflect different institutional arrangements, but in both cases, education supports the development of advanced knowledge and skills.
The application of knowledge forms another dimension of human development. In Japan, universities are closely linked with research and industry, particularly in the science and engineering fields. In Germany, universities operate alongside applied research institutions. Organisations such as the Fraunhofer Society connect academic research with practical application, enabling knowledge to be translated into productive activity.
Across OECD economies, approximately 26 per cent of tertiary graduates specialise in science, technology, engineering, and mathematics fields (OECD, Education at a Glance 2025). These fields represent one way in which human capability is applied in practice.
Sustained investment supports these processes. OECD data indicate that Germany spends about 4.4 per cent of GDP on educational institutions, while Japan spends around 3.9 per cent (OECD, 2025). In research and development, Germany invests approximately 3.1 per cent of GDP, and Japan about 3.4 per cent, according to OECD and World Intellectual Property Organisation data (WIPO, Global Innovation Index 2025). These investments reflect continued attention to the development and application of knowledge.
Labour market outcomes provide an additional perspective. World Bank data show Japan’s unemployment rate at approximately 2.5 per cent, while Germany’s unemployment rate remains relatively low by international comparison (World Bank, Labour Indicators). These figures reflect how individuals are able to participate in economic life.
Taken together, these observations suggest that the economic and technological profiles of Germany and Japan are closely associated with sustained investment in human capability. This interpretation is consistent with broader global analysis. The World Economic Forum Future of Jobs Report 2025 highlights the importance of skills and human capital in shaping economic outcomes (WEF, 2025).
A considered appraisal of what other countries might learn from these experiences should be approached with due regard for local contexts. Germany and Japan do not present a single model to be replicated. However, their experience illustrates how sustained attention to education, skill development, and the effective use of human capability can be associated with long-term outcomes. The relevance of this observation lies not in imitation, but in recognising how investment in people can support development within different social and economic settings.
When human capability is supported over time, a range of outcomes may gradually emerge. These include improvements in productivity, broader participation in economic life, and the gradual development of technological capacity. Such processes are often incremental, but their effects accumulate.
In this sense, development may be understood as the expansion of what individuals are able to do and become. When attention is given to learning, skills, and the conditions that allow people to develop their abilities, progress can take shape in ways that extend beyond material indicators. Over time, this expansion of human capability forms the quiet basis upon which more visible forms of development emerge.
In the long run, the most decisive investment is not in what surrounds people, but in what resides within them.
(The author writes on digital infrastructure and the industrial foundations of artificial intelligence. Ideas are personal.)
