– Labour shortages and ageing populations affect both emerging and developed markets
– Demographic changes are shifting the distribution of global talent
– New technologies are shaping global workforce demand and education trends
– Countries are incentivising immigration to lure foreign talent and know-how
As the global economy continues to adapt to ongoing macroeconomic shocks, many countries are looking to boost human capital through training programmes, technology adoption and immigration.
Following key shifts in labour trends resulting from the Covid-19 pandemic, such as the switch to remote work and acute labour shortages in a number of developed economies, countries are re-evaluating how to foster a skilled workforce to facilitate sustainable future expansion.
Population projections see growth concentrated in emerging markets as developed markets tackle challenges associated with ageing populations. As of mid-2023 half of the global population lived in areas where the fertility rate was below 2.1, the number required for a population to replenish itself. Particularly evident in developed economies, such demographic trends could prove detrimental to economic growth by placing stress on both labour supply and welfare systems around the world.
Indeed, the supply of international talent is set to peak in 2040 as the global workforce reaches 700m due to growth in Africa, Asia and South America, according to the World Economic Forum. Similarly, as education opportunities continue to expand, 80% of working-age adults with high school degrees will live in these regions, compared to 19% in Europe and North America.
Amid these demographic shifts, an increasing number of emerging markets are working to build the capacity of their local workforce. As training programmes seek to improve know-how, new technologies are changing the way people learn and migration is creating new global leaders in talent.
Future-focused digital learning
The shift to remote work and online education during the pandemic restructured the labour market, with increasing numbers of workers using digital learning platforms to reskill or change careers.
The “Coursera Impact Report 2021” published by online learning platform Coursera showed that 189m people were enrolled in the company’s courses worldwide, up seven-fold compared to 26m in 2016. Regionally, Asia Pacific represented the greatest share of the firm’s online learners, at 28m. Africa, while home to 3m learners on the platform that year, witnessed the sharpest growth in course enrolment, at 50%. The US and India topped the country list in terms of enrolment, at 17m and 13.6m, respectively, followed by Mexico at 5m.
The metaverse – which combines virtual and augmented reality, sensorial technology and spatial computing – is seen as crucial for increasing the efficiency and efficacy of digital training programmes. A 2022 report from global consultancy PwC found that metaverse and virtual reality technology allowed employees to learn the same material in a fourth of the time required using traditional classroom learning.
In early 2023 Colombia became the first country to hold a judicial hearing in the metaverse. Its government has since partnered with global technology firm Meta to launch Meta Spark, a platform to train entrepreneurs in augmented reality and other emerging technologies.
Latin America is a market with outsized potential for metaverse technology, which could contribute some 5% to regional GDP by 2031, compared to 2.8% globally. While infrastructure challenges exist, the technology could be used to help Latin Americans access medical care or legal proceedings, and allow businesses to provide simulated training in high-value sectors such as mining.
Global technology firms are taking stake in the region, with South Korea’s Samsung announcing its intent to spend $35m on metaverse projects in the region in December 2022.
Meanwhile, thanks to sustained investment in artificial intelligence (AI), a number of GCC countries have set up training programmes to cultivate local skilled human capital to fill future roles working with emerging technologies.
Public entities are spearheading this development, with the UAE’s Federal Authority For Government Human Resources launching its Jahiz digital platform in late 2022 to train government employees in AI, and blockchain and metaverse technologies to boost productivity.
Attracting talent
In addition to training, some countries are seeking to incentivise the migration of skilled workers to build domestic capacity.
The World Bank has recommended emerging markets make migration part of their long-term strategies by providing training for valuable skills and facilitating the flow of remittances, and many host countries are working to provide avenues for legal migration and improve migrants’ access to jobs.
In February 2022 Bahrain launched its Golden Residency Visa, part of a wider trend in the Gulf as countries in the region work to retain foreign talent. The scheme applies to investors, entrepreneurs and skilled workers from abroad who have resided in the country for at least five years and meet a monthly income requirement, allowing visa holders the right to work, unlimited entry and exit, and residency for close family members.
With multiple development projects ongoing amid a push for more foreign firms to locate their headquarters in Saudi Arabia, skilled migration to the Kingdom is set to grow significantly. In December 2021 the Saudi Press Agency reported that 44 global corporations – including consultancy firm Deloitte and consumer goods company Unilever – had agreed to move their regional headquarters to the country, bringing with them their multinational workforces.
The number of non-Saudis signing up for the country’s social insurance scheme increased almost six-fold from approximately 200,000 individuals in the second quarter of 2022 to 1.2m in the third quarter of the year. A new temporary work visa scheme introduced in 2021, as well as a visa-on-arrival programme for certain passport holders that was rolled out in 2022, are also supporting increased migration.
Other countries are rolling out digital nomad visas, seeking to attract a portion of the global workforce that made the switch to digital commuting as a result of the pandemic.
In September 2022 Thailand launched its Long-Term Resident visa programme, which offers a 10-year renewable visa and tax benefits to both high-income pensioners and high-potential professionals, with the goal of attracting 1m foreigners within the next five years.
One notable success predated the pandemic. Launched in 2010 the Start-Up Chile programme offered foreign entrepreneurs visa and financial incentives to develop their start-ups in the country and mentor local talent. As of 2023 participants in the programme had generated over $1bn in global sales, with the homegrown start-up scene hosting a number of unicorns, including on-demand grocery delivery app Cornershop.
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