The role of foreign talent in economic growth

Features
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Published on 2021-10-26 at 11:00 by Mikki Beru
After nearly two years of pandemic waves and strict restrictions, borders are reopening around the world. To ensure sustainable growth, the States are considering a series of measures, including recruiting foreign talent. All sectors are currently in demand of foreign expertise, with innovative and high-tech sectors being the leading job providers. So what are the challenges of international mobility in the Covid-19 era, and how can foreign talent boost economic growth?

Foreign talents stimulate the economy

While British Prime minister Boris Johnson prefers local labour with the belief that the current shortages will subside over time, other global leaders are placing their bets on foreign talent while ensuring the employment of locals. Switzerland, Canada, Australia, the United States, France, Germany, and Thailand rely significantly on foreign labour to boost economic growth. For these States, the presence of foreign talent also promotes the free movement of people and ideas and contributes to the country's influence and development, which does not necessarily affect local employment. But, as global economies are recovering gradually, companies are struggling to hire. According to recent surveys, 70% of companies are finding it hard to attract qualified and skilled international labour. Countries are therefore working on communication campaigns to attract the best profiles.

Switzerland, a leading global talent recruiter before the health crisis, still has high ambitions. The country is very well aware of the essential role of foreign workers in economic recovery and is doing its best to attract the highest potential. Switzerland can boast a low unemployment rate (2.6%), a 3.2% GDP and a dynamic labour market. But just like Australia and the United Kingdom, Switzerland is also suffering from a labour shortage. Currently, 83% of Swiss companies are having difficulty recruiting (compared to 50% in 2019). This could be the worst labour shortage in 15 years. Most areas are concerned, including industry (skilled workers), transport (drivers, in particular of heavy goods vehicles, heavy equipment), administration (receptionists, administrative assistants, etc.), engineering (chemicals, electricity, mechanics, etc.), specialists (lawyers, researchers, notaries, etc.) finance, accounting, personal services, executives.

While Switzerland has opened its international borders, the UK remains partially closed. The British government opted for short-term visas for controlled immigration. For opponents, this measure is insufficient, considering the economic impact of Brexit. Most sectors, including transport, catering, agro-food, etc., have been affected, and companies are pointing out a significant loss of turnover. Many observers who do not agree with the Johnson immigration plan could have been avoided. For them, ensuring the employment of locals is not enough for reducing unemployment, neither in the short nor in the long term. It could even send the wrong signal to foreign talent and companies, scaring away foreign investments and capital. The UK is already paying a heavy price for Brexit. The European Banking Authority (EBA) has revealed that around 100 of the highest-paid bankers left London before Brexit to invest elsewhere. More than 440 major financial firms have left the UK or transferred some of their capital to other European powers.

Foreign labour and globalisation

The success of Pfizer BioNTech is a good example of the positive impact of foreign talent on economies. Özlem Türeci and Ugur Sahin are two doctors of Turkish origin who founded BioNTech. At the first stages of the Covid-19 pandemic, they started working with their teams of more than 1,500 employees, including 500 who focused on finding a vaccine. BioNTech then teamed up with Pfizer to release the successful Pfizer-BioNTech vaccine. The same goes for Albert Bourla, CEO of Pfizer. Born in Greece, the veterinarian and doctor in reproductive biotechnology joined the American group in 1993. He was appointed CEO in 2019 and actually plays a significant role in the fight against the coronavirus. Pfizer has thus become a giant in the global economy.

Many examples show the crucial role of foreign talents in all fields, especially research and development, innovation, new technologies, environment, health, etc. Hong Kong's finance sector has met success in part thanks to foreign talent. However, considering the political crisis in Hong Kong, these potentials have been eyeing Singapore for some time now. Southeast Asian economic powers like Singapore and Taiwan rely on foreign talent for development. In 2017, France introduced its new “French Tech” visa, too, with the aim of attracting qualified foreigners. In January 2020, the “Choose France” campaign was launched. And on July 7, 2021, the government unveiled its new brand strategy: "Welcome to French Tech" to attract more international talents into the French tech ecosystem. On October 12, French President Macron detailed his ambitions for "France 2030", with, in particular, a 6 billion euros investment in electronics and robotics, 5 billion in start-ups, 3 billion in research and the health industry, etc.

The American model

Why is it important to recruit foreign talent? For the United States -- which is a land of immigrants -- the answer is simple. The country greatly owes its strength to foreign talents. They are an integral part of the DNA and of the American ecosystem. With this multicultural vision, the country has been able to embrace everyone's potential. In short, all talents are welcome, as long as they contribute to economic growth.

Some American observers believe that foreign talents have qualities that locals do not, such as an international vision and the entrepreneurship culture. These are assets that American companies are very interested in. The success of Silicon Valley and its many talents is a prime example of the "American miracle". The Biden government is reviving the US labour market. With the borders reopening in November, he hopes to attract potential foreigners from different backgrounds in most sectors, including IT, new technologies, finance, health, luxury goods, engineering, hotels and restaurants, communication, agro-food, etc. In 2020, despite the Covid-19 crisis, more than 1.30 million jobs were created in the IT industry alone. Beyond mere know-how, foreign workers generate millions of jobs. Founders of businesses, many of whom are world-famous, help boost the American power at all levels: economic, diplomatic, social, strategic. It is worth noting that among these talents, many of whom are Nobel Prize winners, a third of them were born abroad.

The Chinese contrast

China contrasts this model with a simple argument: its population (over 1.4 billion). The government believes that there is no need for a foreign workforce. However, there has been a significant decline in the birth rate in recent years, with a particularly sharp drop during the global health crisis. Experts were expecting such a decrease by 2027. In spite of challenges like a drop in the birth rate, ageing population, inequalities between the central and coastal regions, China is not willing to change its policy. Rather than opening the doors to foreign labour, the country chose to amend its legislation. In 2016, households were allowed to have a second child. Last June, it was again amended with the possibility of having a third child. The Chinese, however, are taking these measures with caution; considering the rising cost of living and the multiple burdens of raising a child, government incentives do not seem enough.

China aims at becoming the world's leading power from second place. According to the World Bank and the Center for Economics and Business Research, this could happen as early as 2030. In fact, Beijing relies significantly on its local workforce and prefers to forge strategic partnerships with influential foreigners for better access to other economies. For instance, former French Minister Jean-Pierre Raffarin has maintained close relations with China for nearly twenty years -- which led him to be awarded the “Medal of Friendship” by Xi Jinping.

When China communicates about international recruitments, it aims at boosting its offer. In this new generation of teleshopping (“livestream shopping”), Chinese companies are recruiting and training foreign influencers (most of them living abroad) to promote Chinese products. United States, Spain, France, etc., have their own Youtubers. This new system has a range of benefits. Shanghai-based influencer Alice Roche works in French and English and sells all kinds of products. She believes that live-streaming is a new way of consuming and that in a few years, it will be the main way for people to choose products.

Jean-Baptiste Onana, professor of African geopolitics at the University of Zhaoqing observed in 2016 that it is difficult to find a job in China as a foreigner, even with a solid academic background. However, the African populations face discrimination the most, and things have worsened since the Covid-19 epidemic. Many economies seem indifferent and cite China as an example. Others point out that the "American miracle" did not prevent the scourge of racism.

Foreign talent and multiculturalism in Canada

Canada probably offers the perfect equation. The country remains one of the favourite expat destinations for expatriates. Stretching 9.985 million km², it is the second-largest country in the world after Russia, with just over 38 million inhabitants. In comparison, the United States, the third-largest country (9.834 million km²), has more than 335 million inhabitants. Canada is always on the lookout for foreign potential and is currently implementing a new policy to welcome and retain foreign talent. Its openness policy is proof that the country is aware that each particularity is a strength. Like in other leading powers, many sectors are in tension: health, administration, finance, agro-food, catering, industry, research, new technologies, IT, communication, marketing ... However, keep in mind that Canada is not immune to socio-cultural conflict even if they do not tarnish its image. Canada's history is deeply marked by immigration. Besides, the Canadian government aims at attracting over 400,000 foreign workers this year, including over 100,000 highly skilled workers. Quebec is also facing a labour shortage in all areas. According to the international media, there some 188,000 positions are currently available in Quebec.

The revival of economic growth and the acceleration of international recruitment suggest that 2022 may be more prosperous than the past two years. Foreign talents are in demand more than ever as countries are reopening their borders. Vaccination against Covid-19 is in full swing, making it easier for foreigners and prospective immigrants to travel and seize opportunities abroad. Meanwhile, countries are hoping that their incentives will attract the leaders of tomorrow.