Ideas for Leaders #280

Inequalities in the Competition for Global Talent

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Key Concept

Finding and hanging on to people with the right skills is a problem shared by most organizations today — in both the private and public sectors. The ‘talent war’, however, is not being fought on a ‘level field’. The new Global Competitiveness Talent Index, a tool that measures countries’ efforts to attract, develop and retain talent and their access to both vocational and higher-level skills reveals significant disparities.

Idea Summary

The link between talent and competitiveness and sustainable economic development is now well-established. In all regions of the world, countries are reforming education systems, reducing gender and other inequalities to increase their ‘homegrown’ talent pool, and trying to find ways to attract qualified and entrepreneurial people from abroad.

Talent has become the key resource of the global economy — and one that decision-makers need to understand in depth.

How can countries know what their own ‘winning strategy’ might be in the current global competition for talent? How do you nurture, attract and retain the workforce of the future?

The Global Talent Competitiveness Index (GTCI), compiled by INSEAD, in association with The Human Capital Leadership Institute of Singapore and Adecco Group, sets out to provide some answers. Based on analysis of 48 variables, spanning quantitative data from organizations such as UNESCO and The World Bank and survey data from organizations such as The World Economic Forum, the GTCI ranks 103 countries for their talent competitiveness.
Countries are assessed using an input/output model: the Index measures both what they do to produce and acquire talents (input) and the vocational talent and high-level ‘global knowledge’ skills available to them (output).

Who’s top of the league — and why? The results, unsurprisingly, show a strong correlation between GDP per capita and talent competitiveness. The top ten slots belong to high-income countries in Europe such as Switzerland (world number one), Denmark, Sweden and the UK, plus Singapore (world number two) and the US. 

Looking a little further down the league, it’s possible, say the researchers, to divide the ‘winners’ into three groups. The first is made up of smaller countries and states that rely on outside talent. (Many of these — for example, those in Europe — also have a long history of good education systems.) The second is made up of large industrial countries that have a well-established tradition of immigration, such as the US (9th), Canada (11th) and Australia (15th). And the third consists of emerging economies such as Montenegro (26th) and Malaysia (37th) that are focusing on developing the skills their neighbours lack. (Malaysia would have been ranked higher — had its scores for tolerance to immigrants and gender mobility not been weak.)

What — apart from low GDP per capita — characterises those countries further down? The GTCI shows that a significant number are having problems acquiring or generating the vocational skills required to build the basic infrastructure they lack and to compete in more labour-intensive markets.

The researchers say that one of the challenges in the coming years will be allowing these countries to develop labour and mid-level vocational skills without widening the ‘global knowledge’ gap between them and the developed world.
The challenge is likely to be tough. Importantly, the study found that the input/output correlation didn’t always apply: examples abound of countries that have created high-quality education paths, only to see their graduates flock to higher-paying shores. 

Meanwhile, there’s a more urgent concern: the prospect of massive youth unemployment. This applies almost universally — but the problem is different at different ends of the GTCI ‘spectrum’. In less developed countries, it can be the result of demographic pressures. More than half the population of Nigeria, for example, is younger than 20.

In the developed world, on the other hand, countries face the (somewhat grotesque) paradox of high unemployment and high numbers of job vacancies. In the European Union, where some 26 million citizens were unemployed in 2012, there are expected to be 900,000 unfilled positions in the ICT sector by 2015. 

Business Application

The 2013 GTCI points to the need for government policies to promote greater cross-border mobility of talent and greater access to education for women, the disabled and marginalised ethnic and poor populations.

But there are ‘messages’ for the private sector, too. Companies, say the researchers, need to reinvigorate apprentice programmes to retain skilled workers and create local jobs — and they need to increase investment in effective training. Switzerland, world number one, strongest across all input and output variables, has a thriving apprenticeship programme and a system where employees can move back and forth from classroom to workplace.

One of the biggest imperatives is developing partnerships. The study calls for collaboration between businesses, governments, organised labour, educators and individuals. Such partnerships could help modernise curricula, move education and training methods closer to students’ and workers’ lifestyles and habits and manage human resources as a fluid and constantly changing pool of talents.

There is also, no doubt, more scope for multinationals to invest in training and development initiatives in developing countries. This would help level the ‘playing field’ and, ultimately, increase the global talent pool — for the benefit of all.

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Authors

Institutions

Source

Idea conceived

  • November 2013

Idea posted

  • December 2013

DOI number

10.13007/280

Subject

Real Time Analytics