As the world’s nations and businesses become increasingly interconnected, so too does the flow of global migration. According to the OECD’s “International Migration Outlook 2018”, in 2017 some 258m people resided in a country other than the one they were born in and more than 5m foreign-born persons settled in OECD countries. The flow of migration is believed to not only improve the lives of the migrants themselves, but also to contribute significantly to the economic opportunities of individual businesses and countries.
Despite this, public opinion across the globe is turning against migration, much to the frustration of business leaders and economic research institutes that continue to stress its economic benefits. In turn, more and more nations are implementing measures to combat migration flows. Research suggests, however, that the number of those wishing to – or needing to – migrate across borders will continue growing. Together, these two trends will have a number of significant impacts on countries, industries and businesses.
Pace of Migration
The growth of global migration is outpacing expert estimates. While the 258m global migrants make up only 3.4% of the world’s population, this figure is already higher than the 2003 prediction by the International Organisation for Migration (IOM) that international migrants would reach 230m to account for 2.6% of the global population by 2050.
In its “World Migration Report 2018”, the IOM described global migration as “the variable that had shown the greatest volatility in the past and was therefore most difficult to project with some accuracy”. Based on the current trends of natural disasters and political headwinds, the reality of global migration is likely to continue surpassing the projections of analysts.
While most migrants choose to move abroad in search of better employment opportunities, between 2000 and 2015 an average of 20,000 people per day, or 6.9m annually, uprooted themselves due to environmental and political crises. The IOM points to conflict as one of the key drivers of global migration, in addition to generalised violence and other factors. According to the UN Human Rights Council, the number of people forced from their homes as a result of persecution, conflict, violence or human rights violations stood at a record 68.5m in 2017.
Despite progress in various areas of international diplomacy, internal conflicts persist, with 2015 seeing the highest recorded levels of forced displacement globally since the Second World War. In many cases, however, there is often overlap in causal factors, obscuring global trends. But what can be established is that many of the conflicts driving forced migration are unlikely to cease soon, while other, largely overlooked drivers of global migration will only continue to grow.
Key, long-running conflicts, such as those of Syria or Myanmar, show few signs of a short-term resolution. In fact, the current disorder of international relations and the shifting balance of power may well exacerbate these situations. “What distinguishes conflicts of today is that they are unending,” Demetrios Papademetriou, co-founder and president emeritus of the Migration Policy Institute, told international media in January 2018. “None of the conflicts are anywhere near being resolved because they are extremely complex.”
Another example of crisis driving migration can be seen in Venezuela. The UN estimates that 3m Venezuelans have already fled dire security, skyrocketing inflation, and widespread food and medicine shortages. The rate of migration is growing exponentially and could reach 4m by 2021 in neighbouring Colombia alone, costing the country almost $9bn.
Forced resettlement from troubled countries such as Venezuela could benefit the businesses that recruit migrants and the nations that provide them a new home. However, analysts predict years of lag before such a large population can be assimilated into the workforce and begin offering economic benefits, such as plugging skill gaps or restoring equilibrium to ageing economies. The result of growing forced migration also depends on how proactive governments are in assimilating immigrants into society. Taking such a stance in today’s political climate, however, will not be easy due to rising anti-immigration sentiment.
War has historically been a constant motor of migration, but new drivers are playing an increasingly significant role and could grow rapidly in the short to medium term. There is an increasing consensus that climate change is playing an overlooked role in migration, and that this role is set to increase substantially, Felipe Aliaga, professor at Colombia’s Santo Tomás University, told OBG.
Although rarely cited by migrants as a cause for their relocation, climate change could help explain the increasing impact of food insecurity on regions where agriculture plays a significant role in the economy. According to the IOM, a rising number of migrants from Africa and Latin America are citing poor harvests as a factor influencing their decision to migrate, while a 2017 study by the World Food Programme found that nearly half of the Central American migrants interviewed described themselves as food insecure.
“The focus on violence is eclipsing the big picture … people are saying they are moving because of some version of food insecurity,” Robert Albro, a researcher at the Centre for Latin American and Latino Studies at American University, told international media in October 2018. “This has a strong link to climate change – we are seeing tremendous climate instability that is radically changing food security in the region.”
The World Bank estimates that increasing temperatures and extreme weather will force an estimated 3.9m climate migrants to flee Central America over the next 30 years. The climate change trend can be applied generally across regions with agriculturally dependent economies, such as Latin America, Africa and Asia.
Beyond climate change, other often overlooked factors that are likely to accelerate migration include the increasing prevalence of precarious work, inequality and unequal development, Aliaga told OBG. These could all play a further role in boosting migration. Similar to migrants driven by conflict, the majority of migrants driven by climate change and other factors are also likely to place a burden on the nations receiving them at first, but could later provide various economic benefits if successfully assimilated into the workforce.
The international trend of tightening migration policy, particularly in more economically advanced countries such as the OECD states, appears to already be having an effect as migrants increasingly seek alternative destinations. A particularly striking example can be seen in Latin America, where Mexico, previously a transit hub for migrants heading to the US, is now becoming a destination in itself. The number of foreign-born persons in Mexico increased from around 970,000 in 2010 to almost 1.2m in 2015.
Analysts expect this trend to accelerate thanks to US President Donald Trump’s anti-immigration rhetoric and policy initiatives. The IOM’s research shows the majority of applicants in Mexico come from Central or South American nations, but an increasing number come from Africa and the Middle East, who see Mexico as a more viable option than the US.
Across the globe, South-South migration flows (across developing countries) continue to grow compared to South-North movements (from developing to developed countries). Most prefer to migrate within their country or continent, rather than undertake the increasingly difficult journey to the US or Europe. The general consensus is that this trend will likely harm the economies that have previously benefitted greatly from liberal migration policies, such as the US, where migrants make up 13% of total population; Canada, with 22%; and Australia, with 28%.
The impact of this will likely become more marked as companies, universities, laboratories and research centres struggle to hire the talent necessary in an increasingly tech, knowledge and research-driven economy.
According to international press in June 2017, tightening migration policy has already “created costly delays, complicated legal issues and uncertainty for anyone seeking to hire immigrants” from foreign countries, while discouraging talent from migrating to the US.
Across the pond, top British universities have already alleged that Brexit is fuelling a brain drain, while the National Institute of Economic and Social Research predicts that Brexit’s effect on migration could reduce the UK’s GDP by up to 1.16%.
As the US and many European nations with stricter migration policies are expected to see a reduction in the number of skilled workers among their populations, other countries that had previously missed out on the flow of labour and talent, such as Mexico, are set to benefit from changing global trends. Nations actively undertaking initiatives to combat their brain drain, such as India and Sri Lanka, are also expected to benefit from the growing anti-immigration sentiment.
Chile has long been attempting to take advantage of the declining interest among migrants in nations such as the US and the UK to actively promote migration, particularly in the tech sector, by offering incentives to foreign entrepreneurs. It appears to have already made some impressive gains since launching its Start-Up Chile programme with valuations totalling $1.4bn in eight years since 2010. Various European nations such as Estonia are undertaking similar initiatives to attract top STEM students and tech talent. According to consultancy firm McKinsey, top talent in fields such as engineering can be “anything from three to 10 times more productive” than the average recruit. Rapidly growing technologies, such as artificial intelligence and the internet of things, rely heavily on talent and knowledge, as do research and development centres.
Although such initiatives appear to be providing positive results, their outcome will still depend largely on salaries, which continue to determine migration flows. High-income countries still host almost two-thirds of all international migrants. And despite the high number of skilled workers coming from across Africa to work in Morocco, for example, efforts to stop local talent from moving abroad have not yet yielded significant results.
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