Physical capital refers to the tangible assets that are used in the production of goods and services. It includes machinery, equipment, buildings, land, and other physical assets that are used to produce goods. Physical capital is also known as fixed capital, as it is a long-term investment in the business.


Human capital refers to the knowledge, skills, experience, and abilities of the workforce. It is the intangible asset that contributes to the productivity and growth of the business. Human capital is developed through education, training, and experience.



1. Nature of Assets: Physical capital is tangible assets, while human capital is intangible assets.

2. Source: Physical capital is acquired through investment, while human capital is developed through education, training, and experience.

3. Depreciation: Physical capital depreciates over time, while human capital appreciates with time and experience.

4. Mobility: Physical capital is immobile, while human capital is mobile and can be taken from one organization to another.

5. Value: Physical capital has a fixed value, while the value of human capital is subjective and depends on the skills, knowledge, and experience of the individual.

6. Lifespan: Physical capital has a limited lifespan, while human capital has an infinite lifespan.

7. Impact: Physical capital has a direct impact on the production of goods and services, while human capital has an indirect impact on the productivity and growth of the business.

8. Replacement: Physical capital can be replaced, while human capital cannot be replaced easily.

In conclusion, while physical capital is important for the production of goods and services, human capital is equally important for the overall productivity and growth of the business. A balance between the two is necessary for the success of any organization.

Human capital:-it includes competent and trained people who put together land, capital and other factors of production to produce goods. Physical capital:-it is a factor of production that includes fixed capital and working capital. 1)fixed capital like tools, machines etc which can be used in production over many year. 2)working capital is the factor of production which r used in the production process.