In less than two decades, Europe will need to attract a workforce the same size of the current working population of Germany – its largest economy – to sustain economic growth. Europe needs a talent strategy for its short, medium and long-term well-being.
Large-scale European talent surpluses will soon be confined to history books. With a sustained, low total fertility rate of between 1.4 and 1.6, Europe as a whole is in a state of demographic decline. The continent’s small but potent human capital endowment is in depletion. Europe is nudging past its demographic tipping point – in the wrong direction. However, buffered by the positive impact of immigration, European leaders often view the very real challenges of the continent’s demographic implosion (which will soon be compounded by the baby-boomer-exit) as far removed from today’s labour surplus crisis. According to projections by the World Economic Forum and the Boston Consulting Group, in less than two decades, Western Europe will need to attract a workforce equivalent to the size of the current working population of its largest economy, Germany, in order to sustain economic growth. During the same period, the United States will need to add more than 25 million workers to its labour force. Competition for talent will increase.
1. Get over the intra-EU mobility molehill
The current political debate regarding intra-EU labour mobility neglects the fact that this mobility remains a relative rarity across the EU. According to Eurostat and the European Labour Force Survey, in 2012 just 6.6 million workers in the EU27 were citizens from another EU member state. This equates to roughly 3% of the EU labor force, 2% of the total working age population (15 to 64 year olds) and 1.3% of the overall population of the EU27 in 2012. Introducing regulations that would infringe upon the rights of all EU citizens’ mobility would be like cracking a nut with a sledgehammer. It is rather the lack of intra-EU labour mobility that is demonstrably holding Europe back. The European Council estimated the economic losses due to economic inactivity or unemployment among young people to be 153 billion euro in 2011. That is roughly 1.2% of EU GDP.
2. Go on a talent offensive
European member state governments need to understand that the future talent pipeline is not secure, and that intra-EU labour mobility is likely to only ease growing labour market gaps in the short and medium-term. The EU must form long-term global talent strategies. And the countries most bemoaning talent inflows could soon lose their shine in the eyes of the world’s highest skilled workers.
The risks of getting talent policies wrong are truly worrying. Innovation, sustainability, and prosperity all hang in the balance. This challenge will engulf not only Europe. The 21st century will be one in which, for the first time in human history, there will be a global onset of peaceful demographic decline.
As competition for talent grows and hubs of innovation compete with each other, countries need to develop a strategy for feeding the talent pipeline that extends beyond their own borders, to supply the necessary talent growth. This strategy cannot be conceived of in isolation. It has to be developed in partnership with a new understanding on the part of the international community and its rules.
3. Time for a “European fair deal on talent”
Rather than offending international talent, Europe should develop a talent offensive for the continent. The EU must urgently develop more effective strategies for fostering EU mobility. A “European fair deal on talent” strategy could contribute to the EU’s economic competitiveness as a bloc as well as to the economic rebalancing among its member states.
In cases where this talent is employed to the benefit of another EU country, a “talent mobility stabiliser” mechanism could be implemented in the short-term by EU member states. This means that the talent-lending country could receive a “talent investment package” to grow its future domestic talent pool and improve employment prospects at home. Such an initiative could be referred to as a European fair deal on talent.
4. This requires a talent mobility stabiliser
The temporary talent mobility stabiliser would consist of an economic package administered at the EU level. In accordance with benchmarks, EU countries that are net beneficiaries of talent could target investment at EU countries that “lend” domestically grown talent to their neighbours, in the short-term. Such an economic package could be ring-fenced to benefit programmes that develop the talent pipeline and reduce unemployment through, for example, investment in education, training, lifelong learning and in skills-matching initiatives. Potentially, talent hubs that are adjusting to providing services to a large influx of residents could benefit from such an investment package.
Such a mechanism would have to be discussed and developed among EU member states. A European fair deal on talent could, for example, be governed by indicators such as: flows of intra-EU mobility and specifically intra-EU labour mobility; scope of employment of EU nationals in other EU countries; overall unemployment and youth unemployment levels in countries lending talent; macroeconomic growth indicators and projections. The collection of benchmarks could include an indicator on unemployment rates among mobile EU citizens. The talent investment package could be included as a component in the next multi-year portfolio of the EU Commission. Or it could be created as a short-term, stand-alone fund at the EU level, initially on a pilot basis.
5. Embrace the age of human talent
In the short-term, Europe should add to its “toolbox” for growing and retaining talent, as well as matching that talent with employment opportunities. Talent attracts talent, and its exodus can lead to rapid talent depletion. In the longer-term, the EU will have to develop a strategy for a global fair deal on talent. It will have to invest in growing talent both at home and abroad, as well as compete for mature talent globally.
We are on the threshold of a ‘human era’ – one in which pooling and supplying money is secondary to amassing the brainpower to create positive change. Already, some refer to the coming age of knowledge-based economies and rapidly increasing global mobility as the age of ‘talentism’. It is time to develop a European talent strategy for the short, medium and long-term well-being of Europe.
Source: Policy Network
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