The challenges startups face in recruiting the talent they need to thrive was something I touched upon in a recent article, after research from Cornell University highlighted the difficulties many scientists face in navigating the immigration process in the United States.  These challenges meant that they overwhelmingly elected to go to larger companies that can help them with the bureaucracy, rather than the startup where their talents might be better put to use.

The importance of foreign talent to a country’s innovative capabilities was underlined by a recent letter signed by 40 heads of business schools from across the United States, which makes the case for a more liberal immigration policy that allows greater mobility of talent.

“We do not believe the U.S. has the high-skill talent it needs, nor does it have the capacity to train enough people with those skills,” they write. “Without a substantial change in our approach, this deficit of skills in key fields will hinder economic growth.”

Early warning

It’s a concern that has manifested itself in a paper produced by the Graduate Management Admission Council (GMAC), which both highlights the crucial role immigration grows in fueling productivity and economic growth, but also the risks of political short-termism resulting in this talent supply being shut down.

“The reality is, it is talent that is in shortest supply,” the authors say. “Nations that prioritize its development, its attraction, its retention, and its movement across borders will be best positioned to compete. In a world of machines and algorithms, competitive advantage will come from the exchange of human capital.”

It assesses the landscape through the lens of data from the United States, United Kingdom, Canada, China and India, with a particular focus on business school application data via GMAC’s Application Trends Survey Report 2019.  This allows the researchers to gain a unique insight into the role immigration plays, and the vital role business schools are playing as the gatekeepers of immigration and talent development.

“Business schools are uniquely positioned to explain how mobility of talent connects to economic growth and vitality through our faculty research and expertise. However, as the developers of talent, we also have almost real-time data showing new trends in where talent is choosing to locate,” said Bill Boulding, Chair of the GMAC Board and Dean of Duke University’s Fuqua School of Business. “We feel it is critical we share this information now with policy makers around the world as talent will be the most important factor in determining who wins and loses economically in the future. The issues we are raising are important not just in providing the opportunity to cross borders for education but also to foster robust and vibrant national economic activity.“

Improving the talent gap

A number of (US-based) policy reforms are proposed to improve matters, including removing the visa caps that are currently placed on countries, and significantly reforming the H-1B visa program so that the talent the country needs has a better chance of entering the U.S.  They also urge the processing procedure to be modernized to make it easier for people to navigate.

The paper cites well documented stats around the importance of migration, whether it’s the high number of PhD students born overseas, the outsized number of startup founders or even the one in three U.S. Nobel Prize laureates from the sciences who were immigrants. Indeed, while immigrants make up just 15% of the workforce, they’re closer to a quarter of all entrepreneurs and inventors.

When talent is able to go to places that allow them to maximize their abilities, it provides a boost to the global community, not just the host community. As William Kerr notes in The Gift of Global Talent, it’s common for migrants to return to their homeland, and the skills and experiences they gained while overseas are tremendously valuable to their native community.

Of course, that’s not to say that some of the concerns raised around immigration are not valid, and there are undoubtedly challenges in terms of integration and generally supporting jurisdictions with changes to the local population, especially in terms of service provision, yet the report urges the baby not to be thrown out with the bathwater.

“Unfortunately, the issue of global talent has become subsumed into broader conversations around illegal immigration; important nuances and points about skilled immigrants and students studying in schools have been washed out in the larger emotional debate about securing US borders,” the authors say.

Regional inequalities

They also draw attention to some of the regional inequalities that migration, and indeed technological innovation, can bring.  I’ve written previously about the advantages large populations have in terms of innovation, due both to the talent advantages their larger populations provide and also the bigger markets they offer new products and services.

This can easily see large cities and countries thriving while smaller towns and regions see their talent and prosperity sucked into these metropolises.  These hubs of innovation and economic growth can be hugely valuable for countries and regions, but it’s important that policy makers don’t forget other parts of the country.

The authors urge investment in local talent, and not to rely purely on importing the skills required. It should not be regarded as an either/or decision however, as economies thrive when they have the best talent available to them, so investing in domestic skills development while also encouraging talent from overseas to move are complimentary and beneficial approaches. After all, as the entrepreneurship data shows, it is often the migrants of today that create the jobs of tomorrow.

Show me the talent

With organizations so beholden to the talent they have however, it’s simply not viable to bury one’s head in the sand and pretend the problem doesn’t exist.  As recent research from Wharton illustrates, if organizations can’t bring the talent to them to do the work they require, then increasingly they will move the work to where the talent is instead.

The research revealed that there was a considerable surge in foreign employment after the H-1B rules were tightened.  This is an important finding, as organizations were not responding as advocates for the new rules had hoped.  They weren’t turning to the domestic labor market to find the talent they needed, or indeed investing in training local workers, but instead offshoring to where the talent already was.

Perhaps unsurprisingly, this phenomenon was most pronounced among firms that were heavily R&D focused, with software firms especially prone to take work to where the talent was, even if that meant offshoring it.  It’s a message that came through loud and clear at the recent annual conference of the European Institute of Innovation & Technology (EIT).

“Talent is vital to productivity and innovation, and we should strive to be passport agnostic when it comes to ensuring that the best talent has the platform upon which it can achieve its full potential,” EIT governing board member told the conference.  “If Europe is to remain competitive, then it must ensure that it both develops the talent of its citizens, but also remains open to the mobility of talent from across and outside of Europe.”

German AI company Inveox provide a great example of this in action.  The startup, which recently secured €17 million to further develop it’s AI-based cancer diagnosis technology, has 27 different nationalities represented among their fledgling workforce, and founder Maria Sievert believes this diversity is a key factor in the success they’ve enjoyed to date.

For innovation to thrive, it’s vital that industry and academia are listened to, and we remain open and welcoming to talent regardless of their passport.  In a world where the pressure to shut down rather than open up seems to be growing daily, it’s a battle that must be fought afresh each and every day.  Our future depends on it.