[Excerpt] It is not surprising that most theories of human capital treat the firm as the key unit of analysis, given the deep imprint that Becker (1964 ) left with his early efforts to distinguish between general and specific human capital. It is especially understandable for research that focuses on American institutions and practices. Ever since the passage of the New Deal employment policies of the 1930s, firms have been assigned central roles in the delivery and financing of a variety of labor-market services, including the provision of workforce training and development (Osterman et al, 2001). Most of the chapters in this volume reflect this emphasis by exploring how individuals and firms allocate the costs and share the benefits of human capital, incorporating human capital development into alternative theories of the firm (such as transaction cost, resource-based, agency, entrepreneurial, and knowledge-based perspectives), and how human capital plays into emerging research on social capital, organizational capabilities, learning, and human resource strategies and architectures. But, as Chapters 12, 22, and 23 each suggest, firm-centric theories, particularly those founded upon the neoclassical economics framework, need to more fully take into account how firm boundaries, strategies, and practices relate to other institutions in society. This is particularly important given the changes in employment relationships that are acting to reduce the labor-market functions served by individual employers. In short, the central argument of this chapter is that a more up-to-date theory of the changing nature of employment relationships is needed to understand whether and how human capital is to serve as a source of competitive advantage in a modern economy—even one as decentralized as that of the US.