Talent is scarce. Yet many countries spurn it

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Talent is scarce. Yet many countries spurn it

The Economist | August 15, 2024

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Given the advantages that highly skilled immigrants bring, you might think that countries would compete as vigorously to attract the best and brightest as companies do. Many governments say they want to lure the world’s top talent. China’s ruling party recently vowed to “improve the support mechanisms for recruiting talent from overseas”, perhaps by allowing foreign scientists permanent residence. In America Joe Biden’s administration has promised to streamline the process for admitting talented foreigners, especially those with skills in AI. Donald Trump has said that anyone who graduates from an American college should “automatically” get a green card (i.e., permanent residence).  

Yet few governments think systematically about luring talent, as a corporate recruiter would. Many have schemes to attract people with specific skills, in medicine or AI, say, but these are often piecemeal and bureaucratic. China’s “Thousand Talents” programme, which involved big cash gifts to lure academics from abroad, enrolled only 8,000 scientists and engineers between 2008 and 2018, mostly of Chinese origin. In many countries, far more political energy is expended keeping out the huddled masses than enticing the excellent. Indeed, though some governments fight fiercely for footloose talent, others actively harm their own cause. 

United Arab Emirates is much more open than USA.  Hence, although American universities are widely considered the world’s best, America has been losing market share to Australia and Canada over the past two decades.

To estimate how much footloose talent countries might gain if they were more open to it, The Economist analysed data from the Gallup World Poll. This is an annual survey of nearly 200,000 people from more than 150 countries and territories. Three big, rich, English-speaking countries are the most powerful magnets (see chart above). If there were no barriers to entry, 23m graduates would move to America, 17m to Canada and 9m to Australia.  At the other end of the scale, China and India would lose the largest number of graduates in absolute terms (14m and 12m respectively). In relative terms, however, places like Iran, Ecuador and the Democratic Republic of Congo would see the biggest net outflows. The uae would see only a modest inflow. A port in the desert is not inherently attractive—it is policy that makes it so.

Many things that make a country attractive are beyond a government’s control. Belgium cannot aspire to New Zealand’s scenic beauty, nor New Zealand to Belgium’s location. The most important pull factor—the quality of job opportunities—is hard to change in the short run.  Still, whatever their starting-point, there are plenty of things governments can do to make their countries more appealing to foreign talent. They can simplify the processes by which highly skilled workers enter the country, and foreign graduates of local universities enter the workplace. They can treat foreigners with respect. They can adapt to changes in global labour markets, such as the rise of digital nomads. And they can make it easier to build infrastructure to accommodate newcomers.  

The places that lure them best often have low taxes or a pleasant lifestyle and relatively easy entry requirements.  One problem with migrants is that they need somewhere to live. If lots of well-heeled ones arrive in a place where housing supply is limited, they can drive up prices, infuriating locals and creating a backlash.

3 key takeaways from the article

1. Given the advantages that highly skilled immigrants bring, you might think that countries would compete as vigorously to attract the best and brightest as companies do.  Yet few governments think systematically about luring talent, as a corporate recruiter would. Many have schemes to attract people with specific skills, in medicine or AI, say, but these are often piecemeal and bureaucratic.
2. In many countries, far more political energy is expended keeping out the huddled masses than enticing the excellent. Indeed, though some governments fight fiercely for footloose talent, others actively harm their own cause.  The places that lure them best often have low taxes or a pleasant lifestyle and relatively easy entry requirements.
3. One problem with migrants is that they need somewhere to live. If lots of well-heeled ones arrive in a place where housing supply is limited, they can drive up prices, infuriating locals and creating a backlash.

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Topics:  Immigration, Talent Competition, Global Economy