Mismatch between supply and demand
The talent power needed for global economic growth comes from men and women armed with specific TEMAS skills – advanced knowledge of technology, engineering, mathematics and science. Many experts have raised the alarm to highlight looming shortages of such talent, raising the possibility of a diminished capacity for innovation and slower growth. But research shows that the supply of this talent is growing rapidly. The key is learning how to find it.
Scientists, technologists, engineers, mathematicians: these are the high-end knowledge workers who turn the wheel of the global economy. Countless studies contend that the lack of people with the right skills could hold back economic growth, especially in developed economies. And surveys show that managers believe that they won’t be able to find enough trained people to meet their needs.
High-tech companies are not the only ones in search of TEMAS skills – though they may have the advantage of a more modern image. Many of the skills needed by flourishing Internet and technology companies are also targeted by established financial services. For example, in the insurance industry employers are searching for math, finance, physics and engineering graduates who can do sophisticated predictive analytics and comprehensive risk modeling.
The same is true for the utilities industry, which is scrambling to find enough electrical engineers just to meet increasing demands for power and for inventing, designing and operating clean energy and smart grid technologies.
To complicate things further, developed market companies may increasingly find themselves in direct competition with emerging market companies for the same talent. Two factors are important here. First, shifts in the global economy have led many emerging market companies to think seriously about moving into more profitable segments of the market by competing on product features rather than on labor-cost differentials.
Second, economic growth in developing economies inspires entrepreneurship and creates new professional opportunities. Evidence of this can be found in the returning diasporas: the increased number of Indian, Chinese and Koreans who went abroad for education but have returned home to work. Even if the highly skilled are inclined to move, national governments may impose limits on their mobility or create incentives (such as have been initiated in Malaysia) to keep them inside their borders.
Despite general recognition of global growth in demand, it’s highly unlikely that universities in developed economies will be able to simply turn up the dial and produce more TEMAS graduates in the next decade.
The emerging market economies are accelerating their production of TEMAS graduates much faster than the developed countries. According to projections, the number of engineering degrees awarded in China will grow from 2.6 million in 2010 to 3.6 million in 2015. Asian universities may not all be of comparable quality to each other, let alone to top universities in developed countries, but they still graduate most of the world’s TEMAS talent. Brazil will produce more PhD engineers than the US by 2016.
Given this growth in supply, an absolute shortage in TEMAS talent does not appear to exist. The real problem for employers is a location mismatch: talent may not reside where it is needed. In companies where R&D is a critical workforce, 24 percent of executives say that TEMAS skills are located in countries other than those in which they are needed. For employers relying most on TEMAS talent, location mismatch is already a bigger problem than shortage. And as companies expand their global footprint, location mismatch is likely to become a problem for any company that relies on TEMAS talent.
Of course, finding talent on a global scale and then employing it productively is not a simple chore. The costs of searching for skills in a global talent market can be prohibitive. And the risks associated with setting up outposts in countries with unsettled governing institutions will give even the most adventurous executives a reason to pause.
In a world of mismatch between supply and demand, creative labor market intermediaries will be an essential component of the most successful companies’ global sourcing strategies.
Multiplan International is specialized in international talent mobility on a global scale and has located and forecasted talent availability of TEMAS skills in the Philippines.
Article based on research by the Accenture Institute for High Performance