Switzerland, Singapore and Denmark are the top three most competitive nations when it comes to talent, according to the first edition of the Global Talent Competitiveness Index (GTCI) launched by INSEAD, based on research in partnership with the Human Capital Leadership Institute of Singapore (HCLI) and Adecco.
“There is a widespread mismatch between what companies need in terms of skills and what local labour markets can offer," comments Ilian Mihov, Dean of INSEAD. "Educational institutions are under pressure to supply the employable skills that the new global knowledge economy demands. Obviously, these issues require a collaborative effort among government, business, organised labour and global business schools.”
The GTCI framework considers how each country scores against six pillars – Enablers, Attract, Grow, Retain, Labour and Vocational Skills (LV) and Global Knowledge Skills (GK) – populated by 48 variables. This allows a broad combination of data measuring how a country grows, attracts and retains talent, going from government policy and quality of education to sustainability or lifestyle for example.
European countries dominate the 2013 rankings
The GTCI ranking is heavily dominated by European countries. The top ten include only two non-European countries, namely Singapore (2) and the United States (9). Within Europe, it is mostly the northern part of the continent that appears as most ‘talent competitive’.
The top ranked nations all have many aspects in common, including a long-standing commitment to quality education (UK, Switzerland, Finland, and Sweden), history of immigration (US, Australia) and a clear strategy to grow and attract the best and brightest (Singapore).
First-placed Switzerland excelled in almost all variables, its least convincing performance being on the Attract pillar (18). It also ranked first on both LV and GK pillars. Denmark outdid its Nordic neighbours by excelling in variables such as voicing concern to officials paired with high government effectiveness.
Additionally, Denmark has better labour market flexibility and social protection than its neighbours in Northern Europe, which allowed it to achieve third place in the ranking.
Paul Evans, The Shell Chaired Professor of Human Resources and Organisational Development, Emeritus, at INSEAD, and co-editor of the report noted: “There are differences among the 103 countries covered by this first edition of the GTCI: rich countries need more global knowledge skills to foster innovation and a job-rich recovery; developing countries still need the labour and vocational skills required to build infrastructure, health and education systems. But all of them have to build better environments to grow, attract and retain the skills and talents they need.”
Singapore shines, but many other Asian nations lag
“Talent competitiveness provides a contrasted vision of Asia,” says Bruno Lanvin, Executive Director for Global Indices at INSEAD, “Singapore is far ahead of everyone else, but some countries like Malaysia show that you do not need to be rich to be talent competitive.”
Singapore ranks very highly on Enablers – it is one of the easiest places in the world to do business with a strong and stable political setting. It is able to attract top foreign students and is strong in higher level skills and formal education. Improvements on Singapore’s relatively lower performance on Internal Openness, Access to Growth Opportunities, and Employable Skills, may enable this already well-placed nation to grow further.
However, Singapore was the only Asian country to make it into the top 20. Indeed, outside of Australasia, even the developed northern Asian countries are not in this year’s top 20: Japan charted at 21, Korea, Rep. at 28. China ranks at 47.
These results, when compared to the respective income levels of those Asian countries, call for cautious optimism about their future talent equation.
Asian nations performed better in the Grow category, especially Malaysia (37), which appears to be reaping the rewards of the strong education policies gradually implemented over the last ten years.
China performed relatively well in the Grow, LV and GK categories but failed to make the top 10 of any other variables Thailand, whose education system has long needed an overhaul, actually did quite well in the Grow category – where formal and informal education is a key factor – within its income group.
The Philippines performed well in its Income group (6) and on the Global Knowledge variable. However, relatively low scores in all other variables reduced its ranking to 73.
Generally, the good scores in the Grow categories for some key Asian nations suggest that investments that have been made in their education sectors over the past decade are showing results. However, it remains to be seen whether this will be translated into higher overall rankings in the near future.
A tool to learn and grow
“Nations, particularly those looking to enhance their talent capabilities, cannot take just one variable and concentrate on improving that particular field,” states Kwan Chee Wei, CEO of the Human Capital Leadership Institute (HCLI). “Rather, they should take a holistic approach to establish a talent eco-system of government, business and education to address the multifaceted challenges of employability.”
For employers and policy-makers alike, the results provide a timely insight into the global pools of talent and what drives competitiveness in this area. For governments, adopting the right talent policies can be critically important to attracting the global companies that can contribute to job creation, train local employees and spur further development.
“It is becoming increasingly important to understand what contributes to talent, not least in Asia, which is continuing to build its presence in a global economy," says Christophe Duchatellier, CEO of Adecco Asia. "The demand for highly-skilled workers now far exceeds the talent pool."Duchatellier adds that China, for example, may face a skills gap of more than 20 million college-educated workers by 2020. Indonesia’s need for skilled workers could rise from 55 million to 113 million by 2030.
"This talent gap can only be plugged if we know what strategies work best in developing and retaining talent,” notes Duchatellier.
The GTCI model and rankings rely on a variety of reliable international sources including the United Nations Educational, Scientific and Cultural Organization (UNESCO), the World Bank, and the World Intellectual Property Organization (WIPO).
Furthermore, the GTCI model has passed the test of a rigorous audit by the Joint Research Centre (JRC) of the European Commission.