‘Labour migration into Europe boosts our competitiveness and therefore our economic growth. It also helps tackle demographic problems resulting from our ageing population. This is particularly the case for highly skilled labour. With today’s proposal for an EU Blue Card we send a clear signal: highly skilled migrants are welcome in the EU!’

This announcement by the European Commission’s President José Manuel Barroso, introducing the proposal for an EU ‘Blue Card’ aimed at attracting highly skilled migrants is a response to the increased awareness that Europe needs to step up its efforts to produce and attract knowledge workers. This is crucial if EU countries want to achieve the ambitious Lisbon objective of becoming the world’s most ‘competitive, knowledge-based economy’.

But it is by no means a new insight. A few years ago, the High Level Group chaired by Wim Kok, charged with the task of assessing the Lisbon agenda, concluded: ‘Europe needs to dramatically improve its attractiveness to researchers, as too many young scientists continue to leave Europe on graduating, notably for the US. Too few of the brightest and best from elsewhere in the world choose to live and work in Europe’.

The Blue Card proposal also mirrors policy action that has been taking place at national level, with varying degrees of commitment and success, in a number of EU member states. Last year, in the UK, the Department for Work and Pensions announced the formation of a new Migration Advisory Committee. It’s purpose is to advise the government on skills and labour market shortages in order to ‘increase investment, innovation and entrepreneurship in the UK’ and to ensure that migrants ‘continue to fill the gaps in the labour market’.

At the beginning of this year, as a result of an earlier consultation process, the UK government launched the first stage of a new point-based migration system replacing the existing multitude of work permit schemes to ‘help British business recruit the skills it needs from abroad so we are a global hub of global talent’.

The system includes a highly skilled tier replacing the existing Highly Skilled Migrant Programme ‘to attract the most talented migrants who have the most to contribute economically’.

These policy initiatives seem to echo Richard Freeman’s prediction that the world ‘has entered onto a long and epochal transition towards a single global economy and labour market’.

Or, as other, slightly more cynical, commentators have put it: ‘Rich countries have progressed from simply relaxing their immigration laws to actively luring highly qualified people’. ...

Download Towards a Global Labour Market? Globalisation and the Knowledge Economy

PDF format, 1.35MB, 73Pages. Provided by The Work Foundation.

Katerina Rüdiger
June 2008

Contents:

Introduction 4
1. What are global labour markets? 8
2. Supply and demand of human capital in the knowledge economy 19
3. The extent and nature of skill shortages 30
4. Tapping into the global supply of highly skilled labour? 38
5. Location decision of firms and the internationalisation of R&D 52
6. Policy implications 59
7. Conclusion 69
8. Contact details 72

Conclusion:

Finally, we can say that global flows of highly skilled workers are likely to expand for the economic and structural reasons outlined above. But this might be prevented by public opinion if governments fail to make a convincing case for importing skilled labour. Highly skilled migration is arguably a less contentious issue in the public discourse than low skilled immigration. Welleducated workers with a high income are rather unlikely competitors for social housing or health care against a British worker on the minimum wage.

However, it is often difficult to disentangle these issues in the public and political debate. Responding to insecurities around globalisation and changing work environments, policy makers are facing the dilemma on the one hand to act ‘tough’ on low skilled migration and on the other hand to be able to attract highly skilled migrants for their knowledge economies. This is why it is so important to separate migrant labour pools – highly skilled migrants are both in theory and practice very different from other migrants and governments must be braver in convincing the public of the benefits of highly skilled migration.

Within the light of globalisation and increased internationalisation of R&D, the impact of shortages of skilled labour can be very damaging for the UK and other European countries. The UK in particular, highly dependent on foreign funds for business enterprise R&D as it is, needs to retain its attractiveness as an R&D location. Weaknesses in the domestic supply of highly skilled labour combined with an increase in demand and exacerbated by demographic risk, all have a negative impact on future competitiveness. This means that, in order to keep our hightech industries at home, it is crucial that Europe and the UK further improve their ability to tap into the global supply of highly skilled labour. In addition to that, global companies benefit from the influx of knowledge workers with a global outlook and international experience.

Relaxing restrictive immigration policies is not enough. Europe, as well as individual countries, must start thinking actively about how they can make themselves more attractive to highly skilled migrant labour. Whilst well-tailored migration systems are a key feature, they are by no means the only or decisive factor making Europe and the UK more attractive to highly skilled migrants. Rather than merely relaxing entry criteria they must change to a more positive attitude, including an explicit strategy that involves being more open and receptive to global trends as well as providing the right social and cultural infrastructure. As much as we reject the notion of a ‘war on talent’, it does show that companies who have recognised the importance of attracting highly skilled migrants are already a step ahead of governments by being explicit about that need.

A greater awareness and understanding of the demand for skill in the knowledge economy is also an important prerequisite for policy action. By significantly increasing the number of graduates, the UK has taken measures to address the overall quantity of highly skilled labour. However, when it comes to the actual quality and the skills that are needed, a lot more has to be done.

Finally, we need to start seeing highly skilled migrants as more than just filling the gap. They contribute to the UK’s successful knowledge economy in their own right, as the example of London ably demonstrates. As the exploitation of knowledge and new ideas from a global perspective become more important, their knowledge, drawn from other places, experiences and their international outlook, will be a further asset for the UK to master globalisation.

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