Second part of the article – Talent migration, education and the future
A. Migration and western education
Migration is a natural process that global forces cannot contain it. The rise on inequality (poor income families moving to wealthy urban areas in the search of better opportunities), this is starting to become a threat. Under these circumstances, the population living in urban areas are returning part of their earning into their families living in rural areas, reducing the effect of uneven distribution of income. This can be convenient for the production of more talent as a positive source of distribution; China has economic space to insist in this strategy. As Straszheim remarks:
“In 2033, this grand strategy is likely still to be operating successfully with only modest changes. Over the next 25 years, the heavy reliance on trade will need to change, giving way to domestic consumption and a heavier reliance on the still-immature services sector. The growth rate in China is bound to slow, but instead of the near 10 percent rate of the last quarter century, 6 percent to 7 percent still seems sustainable. China has built up remarkable resources that are now at its disposal, experience in managing its state-dominated economy, and a global network of relationships that are of great long-term value.” (Straszheim, 2008)
Another research followed the impact of China looking on the “transformational changes to business environments, skills and cultures”, a research made by Hartmann, Feisel and Schober (2010). This study showed how Western MNC’s are adapting their organisations to new cultural schemes. As seen in the case of China who prides on itself as the most prominent country in this matter. As matter of fact, educational institutions are aware of this major shift, The Economist (2012) forecasted:
“European schools must now compete for brains not only with other rich countries but also with emerging markets.”
In the future, China will produce the major shift in the paradigm of talent and skills (Altenburg, Scmitz and Stamm, 2008). This would produce a real impact in globalisation, the merging of Non-Western culture, with Western education. This process can be tedious, as results cannot be predicted at this stage, to see whether if there are positive or negative effects.
As professor Mayer-Schonberger (BBC, 2012) says:
“The big question will be whether the Chinese researchers can be as insightful as their Western counterparts – we don’t know yet.”
That is why, as Levin (2010) described, China has established an ambitious agenda for talent promotion. It seeks to expand their higher-education systems, and since the late 1990s, China has done so, aspiring to create a limited number of world-class universities. Nowadays, nine universities receive the most supplemental government funding recently self-identified as the c9–China’s Ivy League. Altenburg, Schmitz and Stamm have confirmed the overall of the policy statement. They found that China’s investment in human resources has created an advantage for local firms and R&D institutions as well as incentives for MNCs to shift knowledge-based operations to China, according to the UNCTAD (2005), the first global destination for R&D outsourcing.
For this plan to succeed, Levin found two key factors for that to happen: multidisciplinary breadth and the cultivation of critical thinking, which is found in western universities. Chinese students pick a discipline or a profession at age 18 and study little else thereafter. And unlike in elite European and US universities, pedagogy in China, Japan, and South Korea relies heavily on rote learning; students are passive listeners, and they rarely challenge one another or their professors in classes. The Chinese system is based on the mastery of content, not on the development of the capacity for independent and critical thinking.
Even these policies can produce an impact in the long term, however possesses a disadvantage in the present state. As Farrel and Grant (2005) described:
“If China is to avoid this talent crunch and to sustain its economic ascent, it must produce more graduates fit for employment in world-class companies, whether local or foreign. Raising graduates’ quality will allow the economy to evolve from its present domination to a leading playing role.” (Farrel and Grant, 2005)
But what is happening in the short term? Is China capable of closing the gap to talented human capital?
China has understood this problem by sending their young population abroad to be educated under western perspectives, and so study under multidisciplinary schemes. At the same time the Chinese government have been importing professionals from other countries, capturing this talent by offering them an improved return for their abilities, as a measure to close the gap of knowledge and talent in the local labour market. This is happening because China is diversifying its economy and making national investments in human capital, and other regions (inner China and in other regions in Asia) are also improving their technical skills. (Lewin et al, 2009)
The main objectives of China is to become a host of knowledge as this would improve the relationships with MNC. These companies would engage with the local market, reinforcing their relationship with the government, trying to close the gap in the labour market. This is why Chinese talent management should be able to retain as valuable resources for the MNCs (Bhatnagar, 2007; Blackman & Kennedy, 2008). To sustain this scenario to retain highly qualified employee, the market is offering higher wages, better job opportunities, a better quality of life and stronger R&D facilities (Michaels et al., 2001; Tung, 2008).
China is producing a considerable effect in the migration process. Highly talented professional are migrating from other countries, especially from the US and EU to China. In that sense talent is migrating, the main reasons being the good economic conditions provided by China can reinforce the capacity of this human capital, not only in producing economic wealth, but also as it was stated before, to stimulate creativity. China has become an important centre for creative environment.
B. Is China producing a brain drain in the world?
China is benefiting from talent migration, improving educational standards; by sending Chinese students abroad, with the invested expectation that they will return back to serve their country (the term used for this kind of students is “Sea Turtle”). But, what are the consequences of this process in the global world? Many academics fear the possibility of a brain drain from western societies, reducing their capabilities of production of knowledge.
The migratory movement of talented and high skilled human capital is shifting. Pricewaterhouse Cooper’s researchers discovered that over the past decade, global movement of talent increased by 25 per cent. They project that by 2020, this type of migration flow will grow by another 50 per cent. This evolution in global recruiting affects more than just the largest businesses (Jackson, 2012). It is not just large US companies that are moving their supply chains, people and headquarters are being relocated for business advantages. Wherever you are located, whatever industry you operate in and no matter the size of your company, MNC will be competing for top talent in a global pool and against work teams around the world.
Solimano supports the case that brain drain is occurring due to economic effects (Solimano, 2002). These conditions of the host country can be an important driving force behind migration (pushing factors). But he does not discard the importance of education as an addition driving force in migration from one country to another (pulling factors). Following this idea, China is sending students abroad to increase their knowledge through universities in the US and EU. Economic conditions present an opportunity (for current human capital) to develop that knowledge into further prosperity and economic wealth.
What could happen in western economies in the long term? Stark (2004) argues that countries with low quality of human capital can stagnate and the less production of knowledge can lead to poor economic conditions. As Stark mentions: “If individuals could be persuaded to form more human capital, the human capital in an economy could rise to the socially optimal level.” China is offering these conditions to improve the quality of their human capital and by that the economy, however there is no evidence that the West is acting in the same direction.
C. What is next?
A long-term scenario of a brain drain from Western economies to Asian economies is occurring at present time. What Mckinsey established as a “War for talent” could lead to the expectation of one winning side, unless policies or incentives are applied.
What is happening now in China, is what Xiang Biao calls “ritual economy of ‘talent'” (Xiang, 2008). He showed how Chinese engineers and entrepreneurs from Silicon Valley have accelerated the development of the information technology sector in China. All these promoted by government agencies that organise conferences and business fairs.
“These business people have transferred technical and institutional know-how much faster and more effectively than local entrepreneurs or large corporations working on their own would have been able to do.” (Saxenian, 2005)
As the Chinese influences grows, highly skilled professionals and business will be attracted to return to their home country. China is preparing to receive this massive income of talent and reproduce this into benefits for the country and its particular interests. (Pieke, 2012)
In applying these said policies the paradigm of migration must be understood with another input. In terms of talent, migration had been analysed from a traditional perspective. As Solimano recalled talent was migrating from a developing economy to a developed one, however an opposite outcome can be expected.
Human capital is moving from the US and the EU (developed economies) to Asian countries (China especially, which can be considered as a developing country). What has changed? The expectation of a higher income still remains as a prime factor, in addition to this, is the environment for creativity. Individuals are using that logic and reviewing the process of added value in producing on a healthy economy that is growing (so their contribution is significant), while on a unstable environment can lead to an exhaustion of learning curve process and thereby a lower contribution to welfare in society.
The process of creativity is more “doable” in a growing economy (provided by with a considerate amount of resources). As Solimano argues, by concentrating the talented and highly skilled workforce in places where the availability of human and physical capital is already high can potentially result in a better economic process. Also he argues that this can create an unequal concentration of knowledge on specific parts of the globe, creating new global inequalities, in terms of human capital and knowledge.
In that sense governments should start a review process of the migration policies in terms of the benefits that are produced and the impact in long and short term on innovation and wealth. Western countries could suffer badly of a brain drain in the long term if the opportunities and the economic conditions are not meet for the next generation of students.