Around the world, the talent hunt-ers are on the prowl. China, India, and the United States, the three larg-est workforces, are the prime con-tenders in the battle over jobs and skills. Technologys increasing im-pact across all job sectors has contin-uously raised employers demands for more intelligent, well-educated, career-ready workers. Replacement needs in high-skill occupations are due to soar. In 2010, a generational retirement shift began that will re-move massive numbers of talented baby boomers from the labor pool.

Joining the developed economies of Europe, Asia, and North America, billions of Chinese and Indian work-ers and potential consumers have flooded into the world marketplace. This has created many new eco-nomic opportunities. It also trig-gered a talent tsunami in labor mar-kets whose warning signs were largely ignored by most Americans.

Long-term forecasters tell us India and China may soon become eco-nomic superpowers. Their argu-ments for touting these two rapidly growing markets are at first glance overwhelming: China and India start

from a lower economic base. Their huge populations are waiting to con-sume. Their colleges and universities produce an inexhaustible supply of skilled scientists and technicians. Ongoing economic liberalization has given them significant economic power. Some see the rise of India and China as a major economic game changer.

However, the growing talent shortage in both China and India is a key issue that is further complicated by a host of socioeconomic prob-lems. India wants the respect con-ferred by its rising IT power, but a rickety infrastructure and wide-spread corruption challenge its cred-ibility. Chinas state-controlled capi-talism is forging into uncharted territory, run by a fascist-type police state that fears political liberaliza-tion. Something must change.

These and other major limitations cloud the future of China and India. A major war for talent is now under way as Chinese tech manufacturers and Indian IT firms hunt for skilled workers. This has serious implica-tions for a U.S. business community historically overdependent on im-porting skilled people from abroad.

Assessing the Global Talent Hunters

China and India have evolved cul-turally, economically, and socially over the past 30 years. The questions now are where they are heading and whether their growth means theyll continue supplying the United States and other industrial economies with talent. China and India may expand their own talent pool, eclipsing the U.S. economy and attaining global economic dominance.

One impact of the growing talent shortages is the serious threat of in-flation. Wages for migrant workers

in China rose 21% in 2011. Indian in-flation averaged 9.4% in 2010-2011, with a 13% increase in wages in 2011.

China: Growing Pains. Chinas young economy arose in 1978 from the ashes of the disastrous Great Leap Forward of the Mao era. It has benefited from a huge population of consumers and cheap labor. Now comes the hard part. As the economy matures, institutional changes in social/political structures are re-quired along with massive invest-ments in human capital develop-ment.

China now faces a major employ-ment crisis. The 30-year low-cost/low-wage manufacturing era that fueled its economic miracle is now over. Chinas 200-million migrant-worker army is growing increasingly restless over low wages and a lack of employment benefits.

Other cracks are also appearing in Chinas boom. Credit Suisse, citing alarming levels of credit expan-sion in 2011, warned of slower growth for the overall economy. Lo-cal government and state-owned or backed enterprise debt totals amount to well over 150% of Chinas 2010 GDP, according to Victor Shih, a po-litical economist at Northwestern University. (By comparison, the U.S. debt-to-GDP ratio is 73%.)

More Chinese economists are now predicting sharply lower annual GDP growth. This could undermine middle-class support of the Commu-nist Party that has been based on the so-called Beijing consensus, the contention that people dont think a lot about freedom of action, free markets, and democracy, as long as capable bureaucrats deliver major economic growth.

It is clear that Chinas greatest challenge is institutional change. Af-ter 90 years of existence, the Chinese Communist Party finds itself in cri-

The Global Talent Chase:China, India, and U.S. Vie for Skilled WorkersBy Edward E. GordonToo many tech jobs and not enough

tech professionals to fill them

China, India, and the United States

all face this dilemma. Here is what

each economic powerhouse is

and should bedoing to ease its

workforce gap, and a look at a

successful strategy known as

Regional Talent Innovation

Networks, or RETAINS.

www.wfs.org THE FUTURIST November-December 2012 43 2012 World Future Society 7910 Woodmont Avenue, Suite 450, Bethesda, MD 20814, U.S.A. All rights reserved.

reported that the majority of U.S. patent filings by many American companies are now being made by foreign nationals living in the United States (General Electric, 64%; Merck, 65%; Cisco, 60%). This motivates many in the U.S. business commu-nity to lobby Congress to raise the annual H-1B foreign visa quota from 65,000 to over 100,000.

But the talent tide is turning, as talent hunters from many nations woo their nationals to return home to become participants in their bur-geoning economies. Also, the United States has tightened immigration policies and raised visa application fees to screen out potential terrorists. It can now take up to a decade to ob-tain permanent U.S. residency. Fi-nally, many other nations are tap-ping the same STEM talent pool by offering attractive employment op-portunities and permanent citizen-ship to foreign nationals.

In 2011, the World Economic Fo-

India has many advantages that China lacks. India has a democratic political system and an Anglo-Saxon legal code. Also, Indias younger age cohort is slated to continue growing, with the nations total population passing Chinas by 2030. There is much talk about Indias demo-graphic dividend (i.e., its relative youth), but this will only be an illu-sion unless the quality of Indias en-tire national talent development sys-tem is significantly upgraded.

U.S.: Myths and Realities for Talent Hunters. There is a growing mismatch in India and China be-tween the available talent pool and economic demands for more skilled human capital. Other serious socio-economic issues complicate their ef-forts to increase the number of high-skill workers. U.S. business leaders still believe that America remains the best location for the worlds top sci-entists and engineers.

A World Economic Forum study

sis. Chinas rising middle class views it as an entrenched elite.

The fact is that many people to-day foster hatred for government of-ficials and hatred for the rich, says Yang Jisheng, a former government journalist and author.

India: Dysfunctional Structures. Indias spectacular growth of recent years is beset by many political and social issues. Economists and busi-ness leaders now believe that Indias high inflation rate (9.1% as of May 2011) is the byproduct of broad eco-nomic structural failure driven by severe talent shortages, a dysfunc-tional transportation and power in-frastructure, and the unrealistic ex-pectations of many of its citizens.

Unless serious efforts are made to redress a growing human capital deficit, Indias economy may stall as it attempts to move up the value chain into more sophisticated IT ser-vices and manufacturing. Someday, India may challenge the supremacy of the United States in pathbreaking scientific research, but not in the foreseeable future. It lacks the large-scale, high-quality university gradu-ate programs needed for an abun-dance of such breakthroughs.

Chinese technology firm Inspur showcases its wares at the Fourth China Cloud Computing Conference, which took place May 2012 in Beijing. Tech firms growing presence in China are spurring new efforts by the Chinese government to recruit tech-savvy Chinese expatri-ates from overseas.

LAOZHANG / DREAMSTIME.COM

44 THE FUTURIST November-December 2012 www.wfs.org

exporting high-pay/high-skills jobs to skilled talent pools overseas, wherever they could be found. Both of these talent strategies are begin-ning to fail.

The demand for talent and the sup-ply of workers with the desired skills are out of balance all over the world. The populations of Japan, South Korea, and many European nations are in decline. India and China are moving into more-sophisticated high-tech manufacturing or IT services, but both are now encountering severe shortages of engineers, scientists, and technicians. In both countries, domes-tic labor pools lack the requisite edu-cational preparation due to deficient public-education systems and the in-adequate standards of institutions of higher learning.

Educationa 25% increase from 2009.

Structural Changes Alter Needed Skills

All of the worlds talent hunters face the same challenge: the ready availability of skilled people, which is often the primary driver for com-panies site selection. But rather than hunting for foreign talent, businesses over the next decade will need to create their own skilled talent pools. And their success will largely deter-mine the future success or failure of their national economiesand, by extension, the worlds.

Until recently, U.S. businesses have bridged this skills deficit by ei-ther importing educated workers or

rum found that more Indian immi-grants were moving back to India than were moving to the United States. A separate Kauffman Founda-tion study, Losing the Worlds Best and Brightest (2009), surveyed more than 1,200 foreign nationals attending U.S. colleges and universities and found that 60% of Indian students and 90% of Chinese students be-lieved that stronger economic oppor-tunities awaited them in their home countries rather than in the United States.

You have the cream of the crop coming over here getting educated, getting experience over here, and suddenly they become much more marketable and can do (just) as well anywhere else, concludes Vivek Wadhwa, the studys lead author.

Over the last 20 years, an esti-mated 150,000 highly skilled immi-grants have returned to India and China, says Wadhwa. About 135,000 Chinese students left the United States in 2010 and returned home, according to the Chinese Ministry of

Girls in a West Bengal, India, village demonstrate their computer-savviness. India has a surging population of youth who are, or will soon be looking for, new jobs in technology, according to Ed Gordon, who cautions that the country must urgently improve its education system and technology infrastructures if it is to find employment for them and continue to grow economically.

SAMRAT35 / DREAMSTIME.COM

to create more talented people at higher skill levels who will be able to better support a developed nations competitive businesses and be high-wage earners.

I call these organizations Regional Talent Innovation Networks (RE-TAINs). They are local, broad-based community initiatives that include large and small businesses, commu-nity organizations (such as chambers of commerce or Rotary chapters), re-gional economic development or workforce development boards, county/city/state agencies, unions, public and private elementary and secondary schools, postsecondary educational institutions, founda-tions, parent groups, and nonprofit organizations in health care, literacy development, and other groups that serve challenged workers who need employment.

RETAINs are regional in composi-tion. They focus on talent develop-ment through a wide array of inno-vative programs. They are financed by private and public funds, includ-ing business investments, founda-tion grants, and local, state, and fed-eral funding initiatives.

Already, more than 1,000 RETAINs have been organized across the United States. RETAINs are now building functional collaborative networks of partners from all seg-ments of the community to create new, more open education-to- employment systems. These non-profit organizations are leveraging businesseducation partnerships into new linkages to meet long-term local talent needs. RETAINs help their communities keep local busi-nesses, stop population decline, and attract new industries and service businesses by expanding the local pool of talented people.

RETAINs are built upon the value of civic activism. Businesses collabo-rating with a broad array of commu-nity organizations, government agencies, and nonprofit groups are working together to form these new pipelines that connect people with jobs through both short-term and long-term initiatives. In the short term, they are moving to fill current vacant jobs. Through RETAIN net-works, businesses offer entry-level job-training programs for those cur-

skilled people who have kept their knowledge and applicable certifica-tions up-to-date and who can relo-cate where jobs exist.

Some critics blame popular cul-ture, and not just deficient education systems, for the lack of desired skills among workers. In testimony before the U.S. Senate, Charles Butt, chief executive of a Texas-based H-E-B su-permarket chain, said that finding qualified young workers is an in-creasing problem: Many schools in-herit an over-entertained, distracted student body.

The spread of new media zom-bies, who lack basic academic com-petencies, interpersonal skills, and critical thinking abilities, is reaching alarming proportions. It should not be surprising that the number of young people entering science, technology, engineering, and math-related (STEM) occupations is shrinking.

The major business issue today is not talent management. It has be-come talent creation. One-third of U.S. business executives report that they face a crippling loss of essential skills as the baby boomers retire en masse.

Current U.S. education-to-employ-ment systems are broken at the lo-cal/state/regional levels. They have outlived the labor economy for which they were created 100 years ago. Over the past 30 years, the in-cremental adjustmentsthe educa-tion reformshave done little to patch the broken talent pipeline con-necting people to jobs.

What steps can U.S. businesses take to remedy these massive defi-cits in the skilled talent needed to-day and over the next decade? Technology is easy to develop, states Dean Kamen, best known as the inventor of the Segway scooter. Developing a new attitude, moving the culture is the difficult part.

The RETAIN StrategyOver the past decade, my research,

consulting, and travels have given me the opportunity to learn about regional publicprivate partnership networks emerging across the Amer-icas, Europe, and Asia that are in-vesting in new talent-creation sys-tems. The goal of these networks is

A major structural change is also occurring in the U.S. labor market. Though the GDP has risen, unem-ployment has not fallen in a way consistent with the number of job openings. Why? U.S. productivity is increasing. In manufacturing and most other business sectors, its not just advanced machines. Its increas-ingly evident that many new ad-vanced technologies are digitizing the whole economy. These surges in productivity will create tomorrows jobs and raise living standards. New jobs will come from rising efficien-cies in production and innovative technologies spawning new prod-ucts and services throughout the en-tire economy.

The flip side to these break-throughs is that todays and tomor-rows jobs require advanced techni-cal skills. A workplace may need fewer people, but they must be bet-ter educated and able to work with advanced computer systems. This has become the new normal for em-ployment, whether it is in an office, production facility, hospital, law firm, or service business.

These digitized jobs present a new problem. The consensus among em-ployers is that people need to be reskilled for the new workplace. The urgent need to create more skilled workers is now a central political and economic concern in communi-ties across America.

The availability of better-educated talent with up-to-date career skills now largely determines where busi-nesses will locate. Communities that break down the structural barriers among businesses, education, and community groups and collaborate to renew their talent creation and economic systems will attract new businesses and retain current ones. Those that dont will wither and die.

The Great Recession has acceler-ated an ongoing labor-market shift that was masked by the many low- or semi-skilled jobs created during the housing/financial bubble. In to-days labor market, employment for low-skilled or semi-skilled workers has fa l len dramatical ly. Even middle-skilled professionals have seen a steady decline in jobs because of automation. In general, the job op-portunities are brighter for high-

46 THE FUTURIST November-December 2012 www.wfs.org

that future prosperity depends on the U.S.its government, business, people, universitiescoalescing be-hind a strategy for growth and creat-ing incentives so talent and capital

flow to promis-i n g s e c t o r s where the U.S. s t i l l h a s a n edge in an in-creasingly com-petitive global economy.

But in the midst of a major un-employment crisis, executives at all levels are reporting increasing diffi-culties in recruiting skilled talent and filling scientific and technology positions. Among the worlds three largest workforcesthe United States, China, and Indiatechnology is outpacing current job training and preparation programs. China and India are moving from low-skill/low-wage manufacturing into high-skill/high-wage industries, but the needed talent is sorely lacking.

U.S. businesses can no longer rely on engineers and scientists from India and China to fill their skills gaps, as these sought-after workers are increasingly being attracted by opportunities in their native coun-tries. But Regional Talent Innovation Networks (RETAINs) are gaining momentum across the United States. More than 1,000 of these publicpri-vate partnerships are helping current workers upgrade their skills and are sponsoring regional career informa-tion and education programs.

As this centurys economic power-houses build upon their own strengths, prospects for the global economy as a whole will improve. No single businessor countrycan win this jobs battle alone.

About the AuthorEdward E. Gordon is presi-dent of Imperial Consulting in Chicago. His most recent book is Winning the Global Talent Showdown (Berrett-Koehler, 2009). He may be reached at Imperial Consult-

ing Corporation, www.imperialcorp.com.This article draws from his recent white

paper, The Talent Hunters: The United States, China and India in the Battle over Skills and Jobs (Imperial Consulting Corpo-ration, 2012).

ing them to a regional career pipeline for employment. Such regional over-hauls of education-to-employment systems are beginning to help sustain and grow local economies. If the RE-TAIN talent model is brought up to scale across the United States, more Americans will find good jobs and increas-ing numbers of U.S. businesses will become more competitive in the world marketplace.

New York Times columnist David Brooks wrote, The U.S. has always been good at disruptive change. Its always excelled at de-centralized community-building. America needs to build on these past strengths now. The McKinsey Global Institute agrees: To create the jobs that America needs to continue growing and to remain competitive, leaders in government, business, and education will have to be creativeand willing to consider solutions they have not tried before.

If the United States fails to address the current talent red alert, the price will be high. The survival of many U.S. businesses is at stake. Large cor-porations continue to poach many workers from small and medium-sized companies. In fact, Manpower has predicted that, between 2010 and 2020, 10% to 20% of U.S. businesses will close their doors due to the in-ability to fill key vacant jobs.

Civic activism has long been a hall-mark of American culture. Business persons, educators, union leaders, government officials, and community groups and organizations can work together to form these Regional Tal-ent Innovation Networks. The United States can move beyond the current job crisis into a decade of increased opportunity for those who are willing to form partnerships focused on de-veloping the skills and education re-quired for employment in a twenty-first-century global economy. We must act now before it is too late.

Improving Prospects for Global Prosperity

The success of the United States, China, and India, as economic power houses, matters to the world. As Wall Street Journal economics edi-tor David Wessel put it, Its clear

rently unemployed who have some of the required job skills and a will-ingness to learn the rest. Unlike pre-vious public job-training programs, RETAINs do not offer generic job training in the hope that this will as-sist an unemployed person in find-ing future employment.

Many of these publicprivate net-works are now linking individuals who have some of the required job skills to specific vacant jobs. For up to six months, an intensive training and education effort puts these train-ees both in the classroom and on the job to get the required knowledge. They receive a training wage from the business and their unemploy-ment compensation. In other words, they earn while they learn. The ma-jority of these trainees graduate from their education programs and are hired to fill vacant positions.

Two excellent examples of this ap-proach are HIRED in St. Paul, Min-nesota, and Chicago Career Tech in Illinois. Established in 1968, HIRED specifically matches an unemployed worker who has some, but not all of the required skills for a vacant job in a local business. HIRED then pro-vides the worker with classroom ed-ucation that addresses skill or educa-t ional def ic iencies , while the business provides a trainee position with on-site job-specific training. HIRED has established a growing network of companies using this proactive approach to fill their va-cant positions.

Chicago Career Tech was initiated in 2010 to retrain unemployed mid-level tech workers for new jobs. A rigorous educational program that was developed in collaboration with Chicago-area technology firms pro-vides these workers with the specific educational updates required to fill vacant positions. Of the 165 people in Chicago Career Techs first class, 149 received final program certifica-tion and were placed in jobs. A sec-ond class of 300 began in 2011.

For the long term, RETAINs are also developing career information and ed-ucation programs from elementary school through college. High-school career academies, as well as higher ed-ucation career and technical programs, are increasing the number of local well-educated students and connect-

A workplace may

need fewer people,

but they must be better

educated.

www.wfs.org THE FUTURIST November-December 2012 47