This difference is very important and is attributable to the human capital associated with traditional skills and knowledge, not obtained through attending educational institutions. In this chapter we discuss both human capital accumulated through formal schooling and human capital based on local and Indigenous knowledge (LIK). Certainly, measuring the latter is a more challenging task given the difficulty of quantifying the value and scope of LIK. It is worth noting that the lack of one (e.g., formal education) may be partially compensated, albeit indirectly, by another (LIK) in terms of human development. First, human capital is the most important ingredient in the "knowledge sector", which includes technologically advanced industries and services (e.g. information technology, high tech manufacturing, financial services, etc.)