Today there is a high unemployment among college students in many countries. At the same time, there is a shortage of skilled workers in other countries. Most global companies recognize that their needs for skilled workers are getting more critical each year and could reduce their competitive advantage unless they take a strong action and demand for a change. The issue also points to the inefficiencies of several education systems that fail to address the needs of the job market.
In last year World Economic Forum (2017), many economists have concluded that this shortage can be solved based on two factors: Talent mobility and better education. The talent mobility can easily be solved by changing immigration law to allow skilled workers to work where they are needed. During the conference, several governments have agreed to review their immigration policies to allow highly skilled workers to migrate and work in their countries. However, due to a political issue, the policy has not been fully implemented yet. Currently, there is a proposal called “Stimulating Economies through Fostering Talent Mobility” focusing on addressing talent mobility away from politics. If this proposal is accepted, there will be changes in the immigration laws of many countries.
During the forum, many economists have warned that the global economy is approaching a “Demographic crisis” as the working-age populations of developed economies are declining quickly. There are many older workers (60 years or more) who are retiring but NOT enough younger workers (18 to 40 years old) to take their place. These economists believe that soon, “Human capital” will surpass “Financial capital” as the economic engine of the future. That means countries that have more skilled workers will dominate the global economy and control the world.
After several discussions, many economists have concluded that some countries must change their immigration laws to allow skilled workers to work wherever they are needed. They argued that it will benefit both countries: The countries that receive skilled workers (i.e., developed countries) will have what they need. The countries that send skilled workers (i.e., developing countries) will also benefit by getting a lot of financial remittances as most skilled workers would send money home to help their family. Since skilled workers make much more than labor workers, their financial remittance could triple or quadruple the amount of money sending back home as compared with labor workers who work overseas. These economists believed that with a large amount of remittance, developing countries can improve the standard of living, create more jobs, and improve their economy. Over time, skilled workers may return home after having experience working abroad, they can transfer their skills, capital, and technology back home and create significant advantages.
However, during the discussion, the main question was raised on whether countries that have a large population of younger workers could produce such skilled workers. A panel of five top economists asked: “Today, the needed skills are in the science and technology fields, we do not know which education system could produce such skilled workers? The talent mobility proposal will NOT work without skilled workers. To change immigration law is NOT enough, we need to require changes in their education system and focus on countries that have an appropriate education.”
Many economists agreed that since no single country can solve it alone. All countries, governments, universities, and businesses must work together to come up with solutions that meet the global demand for skilled workers. Given the complexity of this shortage crisis and the slow to change education systems, it may take many years to produce enough skilled workers to meet the global demand.
- Blogs of Prof. John Vu, Carnegie Mellon University