Industries and countries worldwide will require major increases of highly educated people in their workforces to sustain economic growth, argues a new report prepared by the World Economic Forum in collaboration with The Boston Consulting Group (BCG). The report, Global Talent Risk—Seven Responses, analyzes projected talent shortages by 2020 and 2030 in 25 countries, 13 industries, and nine occupational clusters. The report concludes that:
• Demand will be biggest for highly educated professionals, technicians, and managers. Professionals will be in particularly high demand in the trade, transportation, and communications industries in developing nations.
• In the next two decades, demand for professionals in manufacturing will peak at more than 10 percent in developing countries, exceeding 4 percent across all countries sampled. (Labour-demand growth rates are compounded annually.)
• Health care research and development alone will generate enormous demand for skilled labour worldwide.
• Employees without critical knowledge and technical skills will be left behind.
If left unaddressed, talent scarcity will become a threat to sustained growth, particularly in knowledge-based economies. “Human capital has replaced financial capital as the engine of economic prosperity,” says Hans-Paul Bürkner, BCG’s president and chief executive officer.
The roots of the global talent risk include the widely uneven quality of educational systems, erratic employability of the workers in the Southern Hemisphere, and demographic changes in the Northern Hemisphere, where retirement of the baby boomers will result in an unprecedented talent deficit. In Canada, Germany, the United Kingdom, and the United States, expected immigration and birth rates will not offset the workforce losses caused by aging populations. Today, foreign-born workers with university degrees or equivalent qualifications make up just 2 percent of the European labour market, compared with 4.5 percent in the United States and nearly 10 percent in Canada. Improved education and training must go hand in hand with increased labour migration.
“The global problem is no longer a mere talent mismatch. The scale of the predicted talent gap requires concerted action, starting with—and going well beyond—removing barriers to the mobility of talent,” says Piers A. Cumberlege, senior director, head of partnership, World Economic Forum.
The report proposes seven core responses to global talent risk:
• Introduce strategic workforce planning to address imbalances between labour supply and demand.
• Ease migration to attract the right talent globally.
• Foster “brain circulation” to mitigate brain drain.
• Increase employability by advancing technological literacy and cross-cultural learning skills.
• Develop a talent “trellis” by focusing on horizontal and vertical career and education paths.
• Encourage temporary and virtual mobility to access required skills easily.
• Extend the pool by tapping women, older professionals, the disadvantaged, and immigrants.
MORE ARTICLES ON HUMAN CAPITAL MANAGEMENT