Reflecting on a future defined by mobility

Across the OECD, regions and cities are looking for new ways to attract talent, investment and visitors. Do the pandemic and existing megatrends present new opportunities to do so?

They absolutely do. The Great Lockdown was also a Great Reset in that — from the supply side — labour has ever more power to decide where it wants to be. Meanwhile, on the demand side, cities have realised how important it is to be a desirable destination for workers, consumers, homeowners, and so forth. This realisation reinforces the pre-existing demographic reasons for cities and regions to be competing for young talent, namely the significant shortages of workers they have been facing, and which will undoubtedly become more acute over time.

You discuss a future defined by perpetual mobility (Move, p.94). In this future, the integration of migrants will lead to greater economic and social benefits for all. What can and should policy-makers do to maximise the benefits from increased migration?

The most important point is that we should not assume that more migrants will lead to greater social and economic benefits. Indeed, we can divide countries by those that undertake the requisite effort to “make it work” and those that don’t. For the mainstream, the economic case is easier to make than the social one: Immigrants tend to not compete with locals in the same sectors, pay in considerably more than they take out, fill crucial shortages that improve overall productivity, and are a source of innovation and diversity. But translating this theory and indeed empirical track record across all recipient nations requires significant planning and execution in areas ranging from skills training to cultural assimilation. These issues also can’t be seen in isolation from other important areas ranging from equitable housing policy to robust industrial policy. 

In your book, you suggest that we may have a moral obligation to relocate populations in the face of risks posed by climate change. In OECD countries, most climate-related public investment happens at the subnational level – indeed 64% based on 2019 calculations. What message do you have for subnational governments to manage the risks and opportunities as the distribution of the global population evolves?

The first and most fundamental point is that there should be alignment among federal, provincial, and municipal authorities. Climate models don’t respect political boundaries at any level. That said, the fiscal capacity of many subnational authorities enables them to craft tailored responses to their specific conditions. This includes everything from reducing emissions to adapting infrastructure to civic strategies for absorbing climate migrants. Since climate readiness is quite uneven, those locations that are better prepared through wise spending will become relatively more attractive over time. Not only do these investments have to be made, but at the federal level we will need systems that allow for greater fluidity among populations given rising volatility and unpredictability. 

How do you define talent? What are the missing skills in the future scenarios you put forward? And what might governments do to bridge the skills gap and to attract and retain young talent?

I define talent as people with skills that can be gainfully deployed somewhere, but there remains a large mismatch between the supply of talent and the geography of demand. Many youth with useful skills are trapped behind borders and remain under-productive in climate-stressed countries. Many of our critical economic sectors face skills shortages right now, from technology and medicine to construction and agriculture, depending on the country or season. Even at full employment, we have labour shortages — after all, growth itself generates greater demand. Governments not only need to develop stronger partnerships between academia and industry, but also to improve working conditions and keep tax rates sufficiently flexible for youth given the broader uncertainty in labour markets and the rising cost of living. 

You discuss this idea of a global competition for young talent. What will characterise the winners? And how might we minimize the long-term risks for those who lose talent en masse?

It is true – and worrying – that with lower fertility rates worldwide, the competition for talent does imply a sharper divide between winners and losers, as populations that are brain drained are less able to replenish their workforce. This competition for young talent therefore becomes almost zero-sum in a physical sense given the finite population of potential young migrants, though not necessarily in a digital sense, of course. And yet countries are engaging in this competition for young talent both in the physical and digital senses in order to spur both consumption and innovation within their borders. The winners will be the places that are “sticky” in attracting talent because they provide the elements of stability, affordability, and openness that young migrants seek. At the same time, we will need to do much more to support countries losing talent by helping them strengthen their role in the global division of labour.