Europe’s Not Got Talent

GUETERSLOH, GERMANY – Europe is in denial. Policymakers may view the continent’s looming demographic implosion – which soon will be compounded by the baby-boom generation’s exit into retirement – as a distant event that can be addressed later. But, given the scale and complexity of any remedy for Europe’s shrinking stock of skills and talent, the problem needs to be placed at the top of the policy agenda.

Innovation, sustainability, and prosperity all hang in the balance. And, although aging populations are the rule in Europe, the challenges they pose extend far beyond the continent. Indeed, the twenty-first century will be marked by the global onset – for the first time in human history – of peaceful demographic decline.

This process can be visualized as a champagne coupe, with a broad, shallow bowl mounted on a long, thin stem: an ever-slimmer base of young people supports an ever-increasing number of senior citizens, placing social-security systems under growing strain as the ratio of pensioners to the working-age population rises.

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 labor force. Competition for talent will increase.

It is precisely the champagne-coupe stage of demographic decline that is the most critical for growth and prosperity in knowledge-based economies like those of Europe. In this phase, economic health depends critically on the speed at which talent can be replaced.

As competition for talent grows and hubs of innovation spread, countries need to construct a talent pipeline that extends beyond their borders. But, obviously, such a project cannot be carried out in isolation. As an increasing number of international actors fish in the global talent pool in the coming decades, simply reeling in mature talent developed abroad will no longer be viable, particularly given that the source regions for talented people will be those in which skills development is now relatively low.

China, in particular, is expected to transform the global market for talent, because it, too, is likely to enter demographic decline by 2035. As a result, effective measures to counteract the global talent gap – characterized by a labor shortage in certain sectors, skills mismatches (workers with qualifications that are no longer in high demand), and under-skilling (few or no qualifications) – are needed today.

A recent opinion poll by the EMNID institute, commissioned by the Bertelsmann Stiftung, indicates that one in two people in Germany believe that international migrants could fill gaps in the labor market in the future. And, though a vast majority of respondents said that Germany is an attractive destination for skilled migrants, more than half thought that migration laws should be reformed. Indeed, the survey highlighted several measures, such as strengthening antidiscrimination legislation, that Germans believe their government should undertake in order to retain international talent over the long term.

The High-Level Dialogue on International Migration and Development that was held on October 3-4 at the United Nations in New York offered an opportunity for policymakers from around the world to reflect on these issues. The UN Special Representative for International Migration, Peter Sutherland, has already deepened thinking on today’s pressing issues and the great challenges of tomorrow. He has argued that migration is development, and that the post-2015 development agenda must harness its impact.

A high-level group, whose members included Viviane Reding, Vice President of the European Commission, and Pascal Lamy, former Director-General of the World Trade Organization, outlined the broad contours of the global agenda on migration in August. Addressing European institutions, the group called for the further development and pursuit of a global “fair deal on talent,” which would take into account the interests of both source and recipient countries.

For Europe, this would entail becoming a dynamic talent hub, as well as a major developer of the global talent pipeline. The “fair deal” would include encouraging international “coalitions of the engaged” aimed at intensifying exchange of information, enlarging our knowledge about emerging talent gaps, and finding solutions to bridge these gaps. It would also develop scalable and economically sustainable models for providing the education, apprenticeships, and training needed to increase the global skills base.

We are on the threshold of an era in which the amassing of brainpower will be the key to economic growth and prosperity. It is time to convene all concerned to raise awareness and to forge a global strategy for ensuring adequate supplies of talent. The High-Level Dialogue on International Migration and Development was one such opportunity; the Global Economic Symposium in Kiel, Germany, in early October was another.

But, given the issue’s scope and complexity, such opportunities will not be enough. The European Commission should consider establishing an annual EU-wide talent summit, open to EU and non-EU stakeholders alike. Denial is not a strategy.

Christal Morehouse is Senior Project Manager, Bertelsmann Stiftung.

Copyright: Project Syndicate, 2013.


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