Forget brain drain, here’s why brain circulation has become a thing in the war for talent

As cities struggle to emerge from a tumultuous year, the 2021 Global Cities Report by Kearney offers key insights on how Covid-19 and the resulting pandemic containment measures have impacted the level of global engagement of 156 cities around the world.

Comprised of the Global Cities Index (GCI) and the Global Cities Outlook (GCO), the report reveals that the leading global cities have been resilient and adaptable despite initially being hit hardest by Covid-19 because of their high connectivity and density.

Just as they led the global pandemic response, these cities are now poised to lead the global recovery—unsteady and uncertain as it may be.

Global cities leading in recovery

Global cities are now leading the global recovery from Covid-19. They are doing so in the context of a transformed world that is opening historic opportunities for them create a next-generation realization of urban living—one centered on wellbeing and oriented by resilience, the management consulting firm said.

It said that to realize that future, city leaders must proactively address five strategic imperatives:

  • Win in the competition for global talent.
  • Embrace the rapidly growing digital economy.
  • Ensure economic resilience by balancing global and local resources.
  • Adapt in the face of climate change.
  • Invest in individual and community well-being.

Global Cities Index results

Although many of the world’s most globally connected cities in the West and in Asia fell in their overall rankings as a result of the impact of the pandemic, New York, London, Paris, and Tokyo held onto the top four spots on the Index, demonstrating resilience across the many metrics in which they lead.

Los Angeles broke into the top five this year for the first time, after strong performance in human capital. Beijing fell one position to sixth place, as pandemic containment measures impacted the city’s cultural experience scores and muted economic performance limited its business activity, said Kearney.

Hong Kong slid to seventh place following another year of political instability, while Chicago and Singapore held strong at eighth and ninth place, and Shanghai rose two places to break into the top 10 for the first time.

Fastest risers

Overall, 21 cities rose six or more positions in the GCI ranking compared with last year, six of which are in the Middle East.

Doha saw the most dramatic jump, rising 15 places following the restoration of diplomatic relations with its neighbors and supported by considerable gains across human capital, information exchange, and cultural experience scores.

Addis Ababa moved up eight places, propelled by Ethiopia’s development investments that have supported rapid economic growth. Istanbul climbed seven spots to 30th, with the city’s efforts to become a global travel hub proving their worth, said Kearney.

Melbourne also rose six places, in contrast to Sydney, which fell four spots, demonstrating the impact of city-level policies and decision-making during a time of heightened national control and regulation.

Global Cities Outlook results

In terms of outlook, the 2021 GCO has highlighted the strong knock-on effects that healthcare quality has on the future viability of a global city, with European cities faring better than those in North America.

“Despite an overall drop in scores because of the pandemic, the cities holding the top 10 spots were largely unchanged,” said Kearney.

London has maintained the top spot in the GCO for the third consecutive year, while Paris, Munich, and Abu Dhabi each climbed three spots, landing at second, third, and fourth with Dublin rounding out the top five.

“This year’s results make it clear that the most globally connected cities were also the most vulnerable to Covid impacts,” said Kearney partner Antoine Nasr, head of the firm’s government practice in the Middle East.

“The decline in global movement and connectivity was observed across all facets of the Index, from economic activity to social interactions—and cities with a relatively heavier weight toward the physically global dimensions of the Index, such as international visitors, global trade volumes, and public events, were those that suffered most.

Less-connected global cities, predominately in developing and emerging regions, showed fewer impacts of the pandemic and in many cases rose in the rankings. However, we believe these improvements do not yet reflect the full reality, given the delayed impact of the pandemic in many cities.”

Five strategic imperatives for city leaders

The report foresees growing divergence between cities as an uneven recovery from the pandemic picks up and posits that the global recovery will be led by global cities.

Outlining the strategic imperatives for city leaders in that recovery, the report highlights five ways cities around the world can address the challenges they share:

  • Win in the competition for global talent. With human capital as the driving force behind economic activity, cities that adapt to the new priorities of prospective residents, with a renewed emphasis on urban livability and economic opportunity, will be those that emerge on top.
  • Embrace the rapidly growing digital economy. Although digital trends threaten to contribute to an emptying of cities and a relocation of business headquarters, cities that harness the benefits of the global digital economy to create a differentiated competitive advantage will accelerate economic growth.
  • Ensure economic resilience by balancing global and local resources. With the fragility of the global trade system exposed during the early months of the pandemic, cities that recalibrate and balance relationships at global, regional, and local levels will be the most resilient to future disruptions.
  • Adapt in the face of climate change. As climate change accelerates and in the absence of unified global leadership on the topic, cities must lead the way—driving sustainability around the world.
  • Invest in individual and community well-being. In recovering from the collective scars of the pandemic, cities that focus their investments on advancing the well-being of their populations will be those that create an environment in which innovation can thrive.

“The task at hand for global cities is daunting, and city leaders are under unprecedented pressure to deliver for their residents,” said Kearney Partner Rudolph Lohmeyer.

“Despite the obstacles ahead, we see incredible opportunity for global cities. Not only can they lead in recovering from the pandemic, but they can also serve as testing grounds for policy and innovation that can address some of the world’s greatest challenges—from economic inequality to climate change to the global crisis with respect to individual well-being,” he said.

Win in the competition for global talent

Human capital is the driving force behind a city’s economic activity—and its competitiveness. As the urban studies theorist Richard Florida puts it, “What drives innovation and startup entrepreneurship is not the density of jobs or offices but the density of talent.” Crucially, for global cities in particular, this talent must be globally sourced.

One detailed study using US county data over 35 years showed a positive correlation between immigration and local innovation, economic dynamism, and wages. In fact, half of all engineering and technology start-ups in Silicon Valley are headed by immigrants.

Yet the Covid-19 pandemic has challenged the ability of cities to source global talent like never before. The number of new visas and residence permits issued in Organisation for Economic Co-operation and Development (OECD) countries fell by 46 percent in the first half of 2020, largely because of border restrictions.

At the same time, cities around the world showed ugly occurrences of anti-immigrant and xenophobic prejudice, with distressing and violent instances of COVID-related racism reported across the globe.

Meanwhile, a renewed emphasis on the livability of cities—and attention paid during the pandemic to somewhat idyllic small and mid-size cities—has expanded the playing field in the competition for talent.

Even as they lack the centralized power to manipulate several of the policy levers most associated with sourcing global talent—namely, immigration policy and the issuance of visas—global cities still have a powerful ability to influence immigration and draw talent.

Particularly in today’s competitive environment, cities that can build and project a brand as immigrant- friendly, with high quality of life in addition to economic opportunities, are those that will win out.

Around the world, Kearney notes several ways in which global cities are specifically addressing this competition and aiming to get ahead:

Offering trial periods to skilled would-be immigrants.

While San Francisco is recognized the world over as the preeminent tech epicenter, it is of course by no means the only city where tech innovation thrives. The city of Helsinki recently ran a campaign to show that the city not only has a thriving tech sector, but also offers excellent amenities and a high quality of life—for Finns and expats alike.

The city’s 90 Day Finn campaign offered foreign tech professionals and their families the opportunity to live in the city for three months to help them decide whether they want to relocate there permanently. Although the campaign selected only 14 applicants (out of more than 5,000), the city hopes the publicity helps attract more people to fill the local talent gap and has created a database of the candidate profiles for local executives to access.

Supporting immigrant integration.

While attracting residents may be the first major hurdle for global cities in talent development, retaining and effectively integrating individuals into a city is crucial for ensuring longevity of the benefits they bring. In New York City, leaders recognize that the successful integration of immigrants and protection of their rights are essential for maintaining the city’s vibrancy.

As such, New York has one of the most extensive city-based programs in the United States to support immigrant integration through the Mayor’s Office of Immigrant Affairs (MOIA). One of the successful initiatives provided by MOIA is We Speak NYC, an English language learning program that help immigrants learn about city services. Informational flyers and videos are also available in multiple languages to ensure accessibility to the wide range of nationalities in the city.

Incentivizing “brain circulation”

In contrast to the oft-discussed phenomenon of brain drain, brain circulation refers to the luring back of residents who have gone abroad and acquired education, knowledge, and skills in the meantime.

The city of Shenzhen’s Peacock Talent Program, established in 2011, attracts overseas talent, including Chinese nationals and foreign citizens, and has helped to turn the city into China’s Silicon Valley.

The three-tier, high talent-attraction initiative includes financial incentives for globally recognized intellectuals, executives, and athletes and aims to draw professors who taught at world-renowned universities to help grow the local education and innovation ecosystem.

Buoyed by its reputation as a city with a welcoming and tolerant city culture, Shenzhen’s attraction program drew 1,219 highly skilled individuals in its first five years, only 74 of whom were not Chinese nationals.

For individuals, a job alone is no longer reason enough to move to a new city. As economic competition intensifies and more cities develop into hubs of fast-moving and high-earning industries, potential employees will continue to enjoy a wider range of choice when it comes to city living.

Therefore, global cities must center their identities and economic growth plans on the human individuals who they want to attract and retain as residents, offering an improved city-living experience.

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