The Importance of Human Capital in the Aviation Industry


Any robust economy is largely dependent on the functioning of one vital sector of its infrastructure - aviation. The function of civil aviation, which includes the implementation of interstate and long-distance communication, as well as meeting the needs of the population in terms of transportation, services and trade, makes it a priority pillar for the country’s economy, while its special and complex technical equipment, specificity of operation, costliness of services and, most importantly, functioning in diverse economic fields, grants the aviation industry its uniqueness. It operates, on the one hand, in compliance with the legal, economic, normative and organizational principles defined by its own country, and on the other hand, adheres to the administrative, operational and economic norms of regulation dictated by international standards.

Millenia ago, humans discovered the importance of a practice that we today call elementary ergonomics, by use of which it became possible to increase labor productivity. But only in the last century has there been a leap forward in the evolution of ergonomics and the importance of the human factor.

Ergonomics, also called ‘the human factor,’ is a scientific discipline that comprehensively examines the capabilities of the individual in relation to his use of technical means. When designing a workplace, specialists rely on knowledge of human anatomy and labor productivity so as to achieve maximum work potential with minimal damage to the workers’ physical and mental health.

The formation of the theory of human capital is chiefly associated with the name of U. Petty, who, in 1690, pioneered the idea that capital could have an intangible form too, and termed it the ‘living forces of action’. Petty described this force as an inalienable element of the country's wealth and reserves, which must participate in the elimination of social hardship.

In 1776, A. Smith asserted that knowledge and skills are the property of the worker, and not the organization he works for.

J.B Say defined capital investment as the preparation of supplies for the next generation through education, independence and dignity. Agreeing with Smith’s definition, Say maintained that useful skills and abilities are an intangible form of capital, formed by virtue of continuous human investment.

Maia Chinchaladze

J.S. Mill calls productive labor the creator of wealth. In his view, the wealth of the country implies the skill, energy and perseverance of the workers.

According to S. Fischer, human capital is an ingrained ability in humans to generate income. Part of it is acquired at birth, but a lot also depends on systematic education and practice. Therefore, says Fischer, human capital accumulates much like physical capital.

I. Schumpeter, one of the first scholars to theorize about entrepreneurship, also engaged in vigorous analysis of the ever-increasing complexity of capital structure in view of its new intangible forms.

In the twentieth century, E. Denison developed a classification of factors for economic growth. From 23 factors, four he attributed to labor; four to capital; one to land; and 14 to the contribution of scientific and technical progress. In Denison’s system, the quality of the workforce comes first, which in turn depends on the quality of education.

The function of human resource development is to take the initiative and assist in any matter related to the staff of the organization. These activities are all marked by a concern for employee well-being, as well as ensuring assistance and training in a way that provides mutual benefit for the employee and the organization.

Air traffic control in the airspace of Georgia is carried out by Sakaeronavigatsia Ltd., which provides air traffic services and flight safety in the take-off and landing areas of Tbilisi, Kutaisi, Batumi and Mestia airports. Independent airlines, airports and travel agencies carry out passenger and freight transportation. Educational institutions, together with civil aviation specialists, provide training and retraining of flight, engineering and technical personnel, while research institutes carry out research and design activities for aerodromes, ensure the development of aircraft flight and maintenance procedures, and work to improve air traffic control.

Independent use of Georgian airspace began in 1992. The new conditions required the refinement of the air traffic service, acquisition of modern equipment and designing new international navigation routes. The Georgian civil aviation system is composed of Georgian air carriers, airports, navigation systems and other organizations related to aviation services, which carry out entrepreneurial activities independently of each other and in accordance with the Law of Georgia on Entrepreneurs. The unity of their activities creates a system that is designed to satisfy the consumers’ interests.

In the early stages of aviation development, many problems are related to issues such as vibration, temperature changes, acceleration, and the impact of these forces on humans. Physiologists, psychologists and physicians are well aware that human physiology and human role optimization are reflected in all aspects of human activity. Such activities include decision-making process and cognition, designing cabin controls, devising modes of communication and using software. The same applies to the preparation of plans and maps, as well as documentation, aircraft operation manuals, etc. Knowledge in the field of the human factor is increasingly used in personnel selection, preparation and testing.

The urge to master the knowledge of human factors arose during the First World War. The optimization of industrial production was driven by the incentive to perform military duties more efficiently. During World War II, there emerged an even greater demand for refinement of military and technical management techniques. At the time, staff selection and training had risen to a scientific level.

Nino Dierashvili 

The increased interest in the role of the human factor sprang from the rising concern for the issues of security. Applying knowledge in the field of aviation and the human factor requires taking into account the maximum capabilities of human beings.

In the aviation industry, colossal attention is paid to the safe interaction of humans with other components, with due regard for human capabilities. For instance, a complex automatic or semi-automatic system is used to disseminate or reflect meteorological information, which must provide the possibility of non-automated input of data on meteorological elements, which cannot otherwise be observed through automatic means.

In order to ensure safety and optimize human capabilities, the ability of a person to act in accordance with the safety and effectiveness measures of the aviation industry should be consistent with the human resources instructions set out in the Human Factors Training Manual.

Effective management of human resources plays a pivotal role in the functioning of modern economies. It affects the development of the country’s economy as a whole. Georgia’s economy has suffered significantly due to the current global crisis: in the first quarter of 2020, real economic growth declined by 1.5% compared to the same period of the previous year.

Any pandemic can hit the economy hard. During the COVID-19 pandemic, in 2020, Georgia's foreign trade turnover decreased by 2.7 %. In 2019, about 211,000 persons were unemployed. As a result of the crisis, the number of unemployed people is expected to reach 560,000. What remains the primary goal for Georgia is to minimize contact between people and in so doing curtail the spread of the disease.

A free market produces not only tangible or intangible goods but also ideas. Ideas are also goods. The importance of the human factor has been mounting, with huge emphasis on the uniqueness and potential of human resources. At times as such, the role of human capital plays a crucial role in finding ways out of the economic crisis. The new mission of the human factor is to help us prepare for an innovative, robust economy.

Today, the mission of the human factor is to increase competitiveness, improve the management system, introduce effective mechanisms to minimize risks and dangers, and in this manner guarantee the most important condition- security.

It is necessary to focus on the human factor in the aviation sphere. We must first study what the human factor is and then use this knowledge to provide practical guidance for persons employed in this field. The collection and dissemination of information on human factors enables the international aviation community to ensure the safe and efficient operation of airlines.

About the Authors

Ana Kurtanidze- Georgian Aviation University, Faculty of Business Administration, Professor

Maia Chinchaladze- Georgian Technical University, Associate Professor

Nino Dierashvili - President of the Gauss Young Diplomats Association; Georgian American University, Diplomacy Faculty; One of the founders of Campus Lions Club Tbilisi- “CLCT”; Brand Ambassador at “madamwine”


11 February 2021 20:30