RESEARCHING THE TRANSFORMATIONAL IMPACTS OF HUMAN POTENTIAL ON THE ECONOMIC DEVELOPMENT OF REGIONS

Abstract

This research explores the transformational impact of human potential on regional economic development within the framework of globalization and Industry 4.0. The study aims to quantify how investments in human capital (HC) drive economic growth both directly and through intermediary channels such as institutional quality, environmental sustainability, and infrastructure development. The study employs a quantitative approach utilizing a Structural Equation Model (SEM). Data were gathered from a survey of 100 respondents using a 5-point Likert scale to evaluate five primary constructs: Human Capital (HC), Governance and Institutional Quality (GIQ), Environmental Quality (EQ), Infrastructure Development (ID), and Regional Economic Development (RED). The model's reliability was validated through Cronbach’s alpha (0.80–0.87) and goodness-of-fit indices, including CFI (0.93) and RMSEA (0.05).The study concludes that strategic investment in human potential is the foundational pillar for economic stability and competitiveness. While infrastructure and environmental factors are necessary (impacts of 0.350 and 0.280 respectively), their effectiveness is contingent upon the quality of human capital available to manage these resources.