As the US and parts of Europe erect barriers against immigrants, developing countries are exploring different ways of attracting high-skilled workers to their shores
This article was first published in the April 2017 international edition of Accounting and Business magazine.
Alexander Graham Bell, the inventor of the telephone, famously said that when one door closes another opens. This old adage looks increasingly true today for internationally minded skilled workers like Bell, who migrated from Britain to North America in his early 20s back in 1870.
Freer movement of people is an idea that appears to be going out of vogue in certain key regions of the world. While the backlash against immigration in the US and parts of Europe has focused mainly on restricting entry of lower-skilled or culturally distinct foreigners, experts fear that it may also get harder for even top-tier workers to move to where their skills are most in demand. But while some rich nations may be raising the drawbridge, a range of developing nations, especially in Asia, are making it easier for highly trained workers to get visas and to have their qualifications recognised.
‘We are seeing something of a divergence around the world,’ says Gary Burtless, a labour market expert at the Brookings Institution in Washington. ‘There are ominous signs that the US and UK may lose sight of the economic rewards of welcoming outside talent. This would create inefficiencies that would be harmful to companies, countries and individuals. But it would also generate an opportunity for countries or regions that are becoming more open to skilled outsiders.’
The ability of top professionals to move between borders has considerable benefits, economists argue. For a start it can quickly bring in skills and expertise that would often take many years for the education system or firms to generate. ‘If you have a shortage of accountants with a specialised skill or experience, this is not something that can magically be created in a rush,’ says Alex Nowrasteh, an immigration policy analyst at the Cato Institute. Individual workers, meanwhile, can typically command higher salaries where their skills are most in demand. And aside from the direct boost to economic output, nations appear to benefit from a spurt to creativity and innovation. Research in the US, for example, found that around a quarter of patents filed in the country had at least one non-citizen inventor. And over 40% of Silicon Valley technology and engineering startups had at least one immigrant co-founder between 2005 and 2012.
Ways and means
Countries can seek to attract global talent in several ways, explains Kate Hooper, a policy analyst at the Migration Policy Institute. ‘The visa system can make it easier for companies to bring skilled workers into the country and allow foreign graduates to remain in a country after finishing their studies,’ she says.
Despite the well-documented benefits of skilled migration, Hooper argues that governments need to strike a balance, seeking to attract the brightest from abroad, but not allowing companies to exploit the immigration system to undercut the wages of local workers. In the US, several allegations of abuse by companies have soured the public mood towards high-skilled immigration. Back in 2015, for example, entertainment group Disney came under fire for allegedly using high-skilled visas (the H1B system) to import lower-cost information technology workers, while dismissing native workers. The outcry prompted changes at Disney.
IT outsourcing firms in the US have also been accused of using H1B visas to replace skilled US citizens with lower-wage foreigners. In response the Trump administration has drawn up proposals to tighten rules on skilled immigration, potentially raising the minimum salary companies must offer foreign workers in order to qualify for H1B visas. ‘While some reform makes sense, the worry is that this might go too far and choke off the supply of foreign talent that US firms rely on,’ says Burtless. ‘This could easily spill over into a kind of self-defeating economic nationalism.’
Meanwhile, immigration experts and recruiters worry that the UK’s exit from the European Union could impede the economically helpful movement of skilled workers. ‘At present this is a very low-friction system,’ says Nowrasteh. ‘No visas are necessary and the EU’s Mutual Recognition Agreements ensure that the qualifications of overseas workers are often recognised with little or no need for further testing or work experience. Whatever emerges from UK-EU talks is likely to represent a backward step, with greater administrative requirements and costs associated with moving country.’
If such traditional talent magnets as the US and UK become less welcoming, this could represent a human-resources windfall for countries that remain eager to attract overseas skilled workers. ‘So far the likes of Canada, Australia and New Zealand are as eager as ever to bring in brainy outsiders,’ says Nowrasteh.
Meanwhile, developing countries have been keen to reduce barriers to skilled workers. This is particularly true in Asia, where politicians have become more conscious of the adverse economic effects of ageing populations. Between 2010 and 2040 the World Bank estimates that the workforce in China will shrink by 10%. ‘Having traditionally been cautious of immigration, China appears to be becoming more receptive, especially to high-skilled workers from its own international diaspora,’ says Hooper. In 2012 China introduced a new law to facilitate the immigration of high-level professionals and a fast-track mechanism to process them. And four years later the government set up the country’s first immigration office tasked with attracting overseas talent – relaxing requirements for permanent residence.
And the 10 countries of ASEAN – the Association of Southeast Asian Nations – have been trying to emulate the EU’s highly successful Mutual Recognition Agreements to ensure the freer flow of skilled labour. These deals cover a range of professions from accountancy to architecture, with the goal of reducing the need for foreign practitioners to undergo time-consuming and expensive assessments or training to demonstrate their competence. ‘These deals are complicated to strike and have usually been confined to economic blocs or very trusted economic partners like the EU, Australia and New Zealand, and the US and Canada,’ says Norasteh. ‘They can have a hugely positive effect.’
The future could be testing for globally minded companies and workers. But there is at least the hope that more doors will open for skilled labour than are at risk of being closed.
Christopher Fitzgerald and Fernando Florez, journalists
"There are ominous signs that the US and UK may lose sight of the economic rewards of welcoming outside talent"