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06 Jun 2008
While some markets suffer skills shortages, others are crying surplus, and people on both sides of the fence are moving accordingly. The migration of skilled professionals remains a hot topic for multinational firms the world over. But what does it mean for the countries involved? We asked experts from around the world for their views.
The concept of “brain drain” is not new. Wherever the opportunity has arisen, skilled workers from around the world – from doctors and nurses to engineers and architects – have looked to foreign shores for a better life, greater job security or even just a taste of adventure. And, as one country loses this talent, the country of destination enjoys “brain gain” and all the benefits that entails: a broad and deep talent pool, greater innovation and improved global networks.
In some countries, such as India, “brain circulation” has been a feature of the employment landscape, long before the market opened in the nineties, with skilled talent coming and going both within the country and beyond its borders.
Today, however, change is in the air. While talent from developing economies such as India and China continue to look to developed countries like the US, UK and within Europe for work, the picture at home is proving to be increasingly attractive. At the same time, multinational corporations are establishing themselves in these markets instead of bringing talent home. And they are attracting local talent through competitive salaries, greater training options and the prospect of an even wider employment experience.
Nonetheless, questions remain: What does all of this mean for the ongoing migration of skilled workers? What impact is it having on local economies? And where do the least developed countries fit into this picture?
One hundred years ago, the Middle East was sparsely populated, with smaller communities than we see today, no oil industry, and little industrialisation or Western influence. The Rub al Khali – the inhospitable desert or “empty quarter” that stretches from Oman to Riyadh and the Emirates to Yemen – has been crossed by Bedouin communities for centuries, but was more or less unexplored by Europeans until the forties and fifties. Today, however, with the growth of the oil industry and the arrival of foreign investment, the region has become a vibrant commercial hub.
Atkins has been in the United Arab Emirates since the seventies. Back then, the economy was driven by people coming in from other countries, applying for a work permit and living here on a temporary basis – typically, Europeans signed up for two-year contracts to work in the region and then left. It was a short-term brain gain for the region and, given the size of the indigenous population, it was an important part of local development.
Today, we find ourselves with 2,500 staff in the Middle East (1,000 based in Dubai alone) and ex-pat families that settled here 25 years ago. This has major benefits to the company and to the Emirates, and is a reflection of the benefits of living here.
More and more young people are also coming to the Middle East looking for opportunity, and they have become much more part of the fabric of the local economy. This is a major change for the region. People used to come to work in the peninsula largely for the money, but more and more it’s about the lifestyle. It’s attracting a lot of professionals, particularly Dubai, which is pitching for higher end industry and commerce – banking, finance, tourism. It creates an interesting society because people come to Dubai with a fixed idea of how long they will be staying, but they tend to stay longer than they expected.
Staff in Dubai generally work hard and play hard – it’s a very work-centric environment. People are serious about work and highly motivated. It’s brain gain at its best. It creates a society where you can have fun, but generally speaking, work remains at the centre of everything. This is in sharp contrast to a developed environment where society is much more mixed and lifestyle tends to be the centre of everyone’s environment.
Places like Dubai are enjoying a lot of investment from around the peninsula, which is creating, at a reasonable cost, the kind of high quality environment that professional people want to move to, make some money and enjoy themselves. It’s more than brain gain; it’s building one of the fastest growing societies in the world.
The migration of skilled workers has been critical for the UK’s economy over the past 10-15 years at least. There are three channels through which skilled labour has contributed to the growth of the economy.
First, highly skilled migrants are coming to the UK from overseas, where by and large the education quality has been higher than the native population in the UK. This has been boosting average skill levels rather than pushing them down.
Second, there are people coming into the UK via universities, particularly people who continue on to do their PhD, and many of them will stay in the UK economy afterwards. We’re one of the most attractive countries in the OECD for foreign students.
The third route is transfer within multinational companies. These don’t tend to be picked up in the official migration statistics; when foreign companies move staff across international borders, it counts as something else. Given the amount of employment and investment associated with foreign investment, and given the greater mobility of highly skilled labour, that must be becoming a much more important route, though it’s difficult to pin down the total numbers.
Of course, the kind of people we want to attract from developing countries are not necessarily the best people from the point of view of the developing country itself. They would like to export their unskilled labour to us, whereas we’d like to import their skilled labour.
Where it can work to the advantage of both sides is in the short term, if someone came for a few years and gained experience, built up their skills and then went back home. You can see how that could help the economy on both sides. The problem, however, is one of scale. If very large numbers are draining away, that can’t be good for a country’s economy. And if people decide to make a long-term future in the new country, then that’s a permanent loss of quite skilled and talented people from the exporting economy. The question then becomes whether a country can sustain that movement over a long period of time.
The basic hypothesis of our research into the knowledge economy is that the movement of skilled labour is a key driver in this new economic reality. One of the reasons the UK has done relatively well in knowledge-based areas over the past 10 years is precisely because it has pursued very liberal migration policies. The fact that it is relatively easy for skilled people to come in and out of the UK has been one of the great underlying drivers. If you look at areas where we’ve done really well, it’s been in the international trade of knowledge services. A lot of that has been driven by fairly mobile multinational companies, big FDI flows and so on. And much of it has been accompanied by the free movement of labour, or the free movement of ideas and knowledge. On both of those levels, it has been a very important component.
The danger is if you move towards much more restrictive policies, you may start to cut off some of that supply.
Travel has always been part of Indian culture, driven by a desire to experience new things. India is a microcosm of the world; we are very comfortable dealing with cross-cultural issues. It is part of our way of life, not something that management books need to teach us about. If you look at Bangalore, for example, more than 60 per cent of the people living there are from outside the city itself. It is bursting at the seams and struggling to keep up with the pace of people coming in.
Having said that, there was a major “brain drain” in India over 20 years ago and it was seen as a real loss of human resources – until the same people who left turned out to be the biggest investors back into India. There were households, villages and towns dependent upon the money that was being sent back and they lived very prosperous lives. Now, Indians are coming back and the economy is booming, having enjoyed an enormous growth rate over the last four years. New products are being created and sold in the international marketplace by Indian companies, and this is changing things. Salaries are also going up – today, Indian salaries are attractive to skilled people from around the world – but there remains a dearth of talent and growth in the design and creative services side of the economy. As a consequence, skilled people who have left the country and gone to the US or Europe are coming back to fill these gaps. That’s going to make a big difference.
Today, India is able to produce world-class products. Manufacturing alone has come a phenomenally long way in the past decade. If you give an Indian company the right specs and process, they will produce a product that is as good as, if not superior to, anything coming out of China, with zero defects.
There is a huge base of talent here. These are educated people who potentially could develop one career or another and move on. And people here are hungry for training.
When a company such as Atkins sets up something like its design centre in Bangalore, it raises the level in the industry itself. It is definitely seen as a positive thing by the general populace, as well as other firms. You then have people working out of global firms and learning from them. There is a movement to and from these global firms, and I think the Indian industry and economy is benefiting from them.
It’s very important that this flow of skilled labour happens. It’s like the US – the reason it’s so resilient is because of its very proactive approach to immigration. Internally in India we have complete freedom of flow between states, and the government encourages this. It rejuvenates the workforce and that has been good for the country’s economy.
In recent years, developing economies like China, India, Singapore and South Korea have successfully managed their brain circulation. The home countries benefit from the experience of this additional knowledge and skills, and this can be a healthy thing for an economy.
In the case of the least developed countries (LDCs), however, this is not a common feature. Here, professionals tend to emigrate and establish themselves permanently abroad – returning home is rather the exception than the rule. Work opportunities take them abroad, typically to wealthier, more developed countries where potential earnings for skilled workers can be much higher. For example, a doctor, lawyer or engineer from an LDC who goes to live abroad in a wealthy country can often earn 100 times more than in their country of origin. As a consequence, there are some 10 LCDs, for example, where more than one-third of the population with a university-level education lives abroad.
It’s a question of the human capital in place in any given country. In order to develop productive capacities, to create wealth, improve the wellbeing of a nation and to make the economy develop, a country needs to have qualified professionals in the areas of health, computer sciences, engineering, law, business, accounting, and so on. Their departure in one of the LCDs means a loss of the human capital base, the pool of skills and professionals available to the country.
In order to minimise the impact of brain drain, countries need to improve the working conditions of professionals. There have been programmes to improve the working conditions of health professionals, such as doctors and nurses, in LDCs. These have helped increased their retention in the country of origin.
The same can be said in the case of education, by providing better pay and work conditions for research in universities in developing countries in general and more specifically in the case of LDCs. Education should be improved, even though this does increase the risk of further emigration. There have been a number of international corporate programmes, sponsoring Chairs in universities and thereby increasing the incentive for qualified nationals to remain in their countries of origin.
Another tactic is to lure nationals living abroad back home. Some international organisations, like the United Nations Development Programme and the International Organisation for Migration, help qualified nationals come back to their countries of origin by helping them get re-established, offering financing for new businesses and so on.
Another way to mitigate against the impact of brain drain is to make use of the diaspora, leveraging the skills of those qualified nationals who live abroad and getting them to work for their country of origin in other ways: through contacts, joint projects, by asking them to conduct research about their home countries or participate in specific programmes and projects in their home countries. Usually, nationals living abroad, even if they are permanently established there, are willing to collaborate with their homeland on specific activities.
This may not reduce the number of nationals living abroad, but at least it makes the countries of origin benefit one way or another and makes use of the skills some of these professionals may have, even though they are living abroad.
In the debate over “brain circulation”, in my experience, the US enjoys more brain gain than drain. The country remains an attractive option for the world, whether foreign students pursuing degrees at university who then remain for work or further study, or skilled workers trying to enter the market.
Having said that, today, the only way to be successful is to make a commitment to global recruitment. And with access to the internet increasing worldwide, it is a simple matter to connect with people and send through resumes for international postings – it’s a much smaller world than ever. The business world is already focusing on this phenomenon, if not today then in the very near future.
This is familiar territory for Faithful+Gould. We do a fair amount of international recruitment to the US, as we are UK-owned and have a multinational perspective. We receive many referrals from the UK and elsewhere, for permanent and short-term secondment assignments. People come to us, but we also headhunt talent – it goes both ways.
Our work in the US is broad and there are opportunities geographically as well as on a project-specific basis – this contributes to the “brain gain” we experience. We also have a number of people working for the US base of operations who have been assigned to projects in a range of places, from Dubai to Paris and the Netherlands, or from South America to the Middle East to Asia Pacific. People are coming and going in both directions. The US represents a continuing opportunity because people are interested in living and working here – a fair percentage of the people interested in working in the US are also interested in permanent status and a green card – while its connections on the international stage continue to afford it status in the “brain circulation” debate.
This is true not only on the business front, but on the academic front as well – the US has quite a broad and deep academic offering, and is deep in terms of talent in institutions as well. Tertiary education in emerging economies and countries may be picking up, but I don’t know that things are going to level off, academically, in the short term, much less the long term. Nonetheless, American colleges and universities, along with other higher institutions, are really feeling the competition for talent. They are also trying to become more competitive and are bringing more to the table as a result. Ultimately, the only real limitation is the visa and entry part of the equation.
Is brain circulation a good thing? It encourages people to look at their offering and their organisation, so that they focus on being competitive and an employer of choice. This in turn builds an organisation that people will want to work for, all because of that competitive global environment. It can be very difficult and can drive salary rates up – from that perspective, there’s some downside for organisations to consider. The upside is that it forces these same businesses and organisations to make sure they’re offering the right environment and benefits, management team, education and so on, in order to recruit and retain the top talent. Overall, there’s more upside than down.
Local contacts in our regional offices can be found in the Locations section.
Local language websites exist for Denmark, Sweden, Norway and Asia Pacific. To see a full list of our websites, go to the Our websites page.
In the Sector and Service part of the website, relevant regional contacts have been identified.
Faithful+Gould is a member of the Atkins group of companies.
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