In this book the author analyses three very important aspects of transition: human resources, foreign investments and financial sector. At the beginning there is an analysis of investments in human resources. It starts by definition and types of human resources, and continues with definition of knowledge life cycles and the process of human resources management. The work organization with the work process has been defined. Chapter ends by overview of the level of investments in human resources on the global level and distribution of those investments. Further on author presents two types of investments in HR. Investments in HR are a life-long process which mostly consists of formal education performed in educational institutions and non-formal education within family and work organizations. Special attention was drawn to the process of talents and managers development, as a tool to achieve sustainable system for development of organizations and economy as a whole. Current investment trends in human resources are presented, with review of the literature with citation of other authors’ findings on the topic of relation between investments in human resources and organizational performance. Further on there has been presented the system of evaluation of investments in HR, according to which the model of questionnaire which is used in empirical research has been made. Closing the chapter there is an analysis of increase of competitiveness achieved by investments in education and development of human resources in organizations. Section 2 starts with analysis of Serbian economy in transition. There is a comparative analysis with other transition countries, with special attention to financial sector. All factors that have had and which still have influence on Serbian transition are analyzed including factors of political instability and business infrastructure. It has been shown that despite all difficulties in transition, this process in Serbia is bringing positive results, especially in the financial sector. Ethical questions of transition like unemployment, pace of reforms, and employees involvement in the process are covered. It is shown that starting growth of unemployment as a direct result of transition is loosing its pace, and that during last two years there is a change of trend, with employment levels steadily rising. Real wages have been growing during the whole period of transition, and in order to have such positive results in the field of human resources to continue, it is necessary to include social partners in strategic planning of the future strategies in transition. Next topic covers the level of competitiveness created by investments in human resources in Serbian economy, its productive industry, and specially financial sector as a core of the research. According to results of the research the level of investment in education in Serbia is shown, with special attention to non-formal education. Most important national strategies which have been adopted in last few years are analyzed. This shows that regulations framework for development of human resources on the national level has been completed. At the end of the chapter are shown the characteristics of working population and some recommendations are given for the future corrective actions on the national level. Section three deals with investments and foreign investments in Serbia and relates them to investments in human resources, covering current trends of FDI in transition countries. It is explained how development of human resources influences the capacity for attracting foreign investments. The virtual circle of investments in HR and FDI is presented, the implementation of which enables technology transfer required for the economy growth and creation of qualitative competitive advantage on the global level. Legal and structural environment in which foreigners operate when investing in Serbia is covered. The levels and types of foreign investments during the transition period, with recommendations on how to approach the second stage of transition which begins with privatization of large scale public companies in Serbia are studied in details. The effects of human resources on transition and on level of foreign investments are analyzed with special attention to financial sector. There is an overview of knowledge based economy with recommendations on how to use current stage in virtual cycle in which Serbia is now in order to avoid the effect of economic crisis which is present on the world market during year 2009. Chapter ends with the analysis of the fundamental approach to human resources in the investment process of foreign investors. Section 4 introduces the empirical research of the companies operating in Serbian financial sector. The results give the insight of how this sector was developing during transition, what is the level of foreign investments and set the basis to establish relationship between FDI with investments in human resources made in companies and in the economy as a whole. There is a business analysis of financial institutions in Serbia. Major business indicators are analyzed with coverage of the level of employment. There are the results of empirical research and correlation analysis of HCI index level with business indicators Section five concludes the book with overview on how hypotheses are tested throughout the paper. It also gives some recommendations and perspectives regarding future research in this multidisciplinary topic.
