The Impact of Intelligent Development on Income Growth and Human Capital Allocation

The phenomenon of 'intelligent development' has resulted in an increase in the average income level. This can be attributed to two main factors. Firstly, it has led to a rise in the demand for human capital, which in turn has caused a scarcity of such resources and consequently resulted in an increase in their prices. Secondly, it has also improved production efficiency, leading to a decrease in commodity prices and a subsequent expansion of labor demand, thereby contributing to an increase in incomes. The growth in income levels has played a crucial role in correcting the misallocation of human capital. Specifically, higher wages have served as an effective work incentive, motivating labor to upgrade their skills. Moreover, the higher production costs associated with increased incomes have acted as disincentives for inefficient enterprises to exit the market, compelling them to enhance their productivity and contribute to improved factor allocation among enterprises. Finally, higher incomes have made certain regions more attractive, facilitating the flow of human capital and alleviating misallocation. Based on these observations, we propose hypothesis 2.