Stimulating Economies Through Fostering Talent Mobility

Stimulating Economies Through Fostering Talent Mobility

          
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Stimulating Economies Through Fostering Talent Mobility

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    In This Article
    • Countries need to prepare for the challenges of demographic shifts by investing in their own supply of highly skilled workers.
    • Additionally, countries should work to attract highly skilled migrants by designing appropriate migration policies.
    • Governments, companies, educational institutions, and international organizations should collaborate to address talent shortages through redesigned talent mobility.
     

    The global economy is approaching a demographic shock of a scale not observed since the Middle Ages. The working-age populations of many developed economies will start to decline shortly. Numerous organizations will be unable to find enough employees in their home markets to sustain profitability and growth. By 2050, the global population of those 60 years old and older will exceed the number of young (less than 15 years old) people for the first time in history.

    Human capital will soon rival – and may even surpass – financial capital as the critical economic engine of the future. The scope of the challenge is so broad that no single stakeholder can solve it alone. Education institutions, business, governments and non-governmental organizations must come together to propose new frameworks and solutions that will create a new talent environment, suitable for the era of workforce scarcity and balancing the needs of both developed and developing economies.

    In Germany in 2030, there will be 50 people aged 65 and over for every 100 of working age. Today, that ratio is 34%. The United States will need to add 26 million workers to its talent pool by 2030 to sustain the average economic growth of the two past decades (1988–2008) unless a technological breakthrough replaces manpower, while Western Europe would need to add 46 million employees. While most developing nations will have growing populations, they may face increased difficulties in filling the jobs with the right skills. Continued economic growth paired with a limited employability of the workforce (only 10-20% of graduate students are employable by international standards) is a recipe for large skills gaps.

    There are no simple answers to the complex workforce challenges of the 21st century. However, increased talent mobility will certainly be part of the solution. Contrary to conventional wisdom, greater mobility can benefit both nations that receive talent (typically developed economies) and sending nations, especially large nations such as India. In addition to fuelling their countries of origin with remittance funds, many expatriates that decide to return home are armed with skills and business acumen developed abroad. Highly skilled expatriates can also transfer skills, capital and technology back to their home countries.

    Considering more closely the highly skilled—which includes both very highly educated people and people that perform specialized occupations where particular expertise is crucial to value creation—skills gaps affect nations in one way and industries in other ways. Some industries, such as healthcare, education, IT or business services, are likely to experience smaller or bigger—but significant—skills shortages regardless of geography. Certain countries (Japan, for instance), will face highly skilled shortages in many industries.

    To solve these challenges, countries and companies alike need to make effective forecasts of both supply and demand for job categories, in order to acquire skills in short supply and retrain workers appropriately. Given the scale of the approaching talent crisis, strategic decisions need to be taken now, as implementation will take years to bring the desired results.

    Countries need to prepare to face the challenges of demographic shifts and a fast-changing labor market environment by defining adequate education and migration policies. First, they have to invest in their own supply of highly skilled workers. There are several ways:

    • Assess current and anticipate future skills shortages through strategic skills planning. Governments should analyse capacity and productivity risks for each job type (e.g. mechanical engineers) and develop policies to mitigate anticipated shortfalls. Australia, for example, has set up an independent, multistakeholder body that advises the Minister for Education, Employment and Workplace Relations on Australia’s current, emerging and future workforce skills needs.

    • Develop skills recognition mechanisms for both native born and migrant workers. Governments should ensure development of their workforces’ skills, particularly critically needed skills. For instance, the United Kingdom’s government, industry associations, training providers and other important skills stakeholders have established 25 Sector Skills Councils to develop training solutions and influence and shape the future development of qualifications.

    • Provide tax incentives for businesses to train employees. Tax incentives can be used to encourage companies to train new employees and retrain current employees whose skills need an upgrade. Germany, the Netherlands and Austria, for example, have developed special corporate tax incentives for training current employees for both present and future jobs.

    • Develop public-private partnerships (PPP) for promoting education and training.  Governments should encourage partnerships between businesses and academic institutions that improve the match between supply and demand of skills.

    • Promote student mobility. Portability of loans and grants and better cooperation among universities would increase the quality of higher education and give students international exposure.

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