Trades in people

Dr. Terry Cutler

Originally published: Business Review Weekly23 August 2001

Its amazing how we so often use rhetoric and buzz words without regard to the import of what we are saying. A great example is our rhetoric about the importance of people, and all our buzz words like human capital, knowledge workers, and intangible assets.

High on my checklist of the major global forces of the twenty-first century is the internationalisation of labour markets and the accompanying re-definition of national competitiveness.

A decade ago the American Robert Reich described the emerging division of the world into two labour camps. In one camp are the knowledge workers - Reich invented the rather unfriendly term "symbolic analysts" to describe them. Many BRW readers will recognise themselves as among these corporate and country nomads: globally mobile and corporately footloose. Frequent flyers who know the importance of networking and building an impressive address book in their Palm Pilots.

In the other labour camp are two growing pools of support people: people selling personal services and routine production workers. These people are not highly mobile, but they need a growing pool of knowledge workers to fuel demand for their own labour.

Now the global trade in people remains pretty invisible in national accounts. We don't monitor people flows the way we monitor money flows or the movement of corporate head offices, but we should. In the twenty-first century the most important markets are the markets in people, and the futures trades in skills.

People outflows get a bad press as the brain drain. The reality is that cross-border movements will increase in a globalised economy, so we need to work on capturing the upside. The diaspora of expatriates, the global tribe of Australians, are a huge asset. Infiltrating global centres of power and influence, these expatriates can be valuable agents for creating a globally connected Australia, an Australia networked into the world.

The crucial flipside is the question of where globally footloose knowledge workers might choose to live. To where do smart people gravitate? There are some obvious and not so obvious answers.

Knowledge workers gravitate to vibrant hubs of activity, to centres of excellence, and to great, liveable, cities. Lifestyle, an unspoiled environment, and high quality community infrastructure are becoming scarce resources. But knowledge workers also need great airports - they demand direct flights - and great telecommunications.

There is a growing pile of reports, mainly from the United States, about the key factors in the escalating city and country competition for smart people and high technology success. The highly respected Brookings Institute recently brought out a shocking report that directly linked high technology success to the following indicators:

These findings went down like a lead balloon when I outlined them to a group of public servants working on investment attraction strategies! But we cannot afford to ignore the conclusion that "people in technology businesses are drawn to places known for diversity of thought and open-mindedness".

The faint hearted can focus on more sober reports that concentrate on the locational magnets of safe food and clean air, physical security and political stability. Australia starts to look a great place against the global backdrop of race riots, earthquakes, and epidemics like the looming European Mad Cow Disease crisis.

So how does Australia capitalise on some natural advantages and develop winning people attraction and retention strategies? How do we become a key people and skill hub in a knowledge economy?

Thinking about national competitiveness in the global trades in people, some productive areas for attention are immigration policies, tax, urban renewal, transport and telecommunications, multiculturalism, cultural policies, and some serious re-thinking about the contemporary meaning of citizenship and democracy. There are quite a few challenges!

One arm of a people investment attraction strategy will be to re-connect with Australia's expatriate diaspora. The Government's recent decision to widen people's ability to hold dual citizenship is an important step. But the Southern Cross Group mobilising Australia's million-odd expatriates is also calling for electoral reform to retain a vote in Australian futures. Last year the South Australian Government launched an innovative proposal for a virtual electorate with expatriates electing their own representative to parliament, and has set up an International Advisory Panel of eminent expatriates and global leaders. (Disclosure: I was involved in developing this "Information Economy 2002" strategy).

The other front is to build our knowledge based industries and to create new centres of excellence, building on recent initiatives in biotechnology and information technology. To reinforce strategies to fast-track skill and industry development, I think we now need to develop smart people attraction strategies and policies to expand our traditional focus on company and capital attraction. In the twenty-first century, capital and companies will follow people.

A true knowledge nation will be a community of globally connected people who choose to call Australia home.