Trade in people

Dr. Terry Cutler

Originally published: Business Review WeeklyApril 2002

What does a party in London on the 23rd April, the repeal of Section 17 of the Australian Citizenship Act 1948, and 5% of the Australian population have in common? The link is the passage of a new law allowing multiple citizenship. Now people will not automatically lose their Australian citizenship if they take citizenship in another country. There was not a lot of press coverage about this legislation, but it was an important victory for the Southern Cross Group, the lobby organisation representing Australia's growing expatriate community.

I will try to explain why this is important for innovation and Australia's place in the information economy. It is important because it is yet another reminder that the labour market for knowledge workers, as a distinct and growing segment of the workforce, has internationalised. This means that in our national accounts we should now be paying as much attention to people flows, the balance of trade in people, as we do to capital flows and trade in goods and services.

The second reason it is important is because human capital becomes the key resource creating wealth in the 21st century. Human resources, not natural resources, are now the key national resources. The challenge, therefore, is to become internationally competitive in people power and intellectual capital: in brain power. This has huge implications for our national investment in education and research and development. The competitiveness of nations is now all about global competition for scarce skills, for intellectual property, and for centres of excellence.

Capital and corporate investment will flow to and will co-locate with the premier people communities of the world, the hot spots for smarts, not to locations for cheap labour or cheap electricity as in the past. Government investment attraction strategies revolving around bricks and mortar must be replaced by strategies based on people policies and people attraction. Globalisation and the information revolution mean that skilled people have more and more locational choices.

Australia remains a net importer of skills in most areas, which is a good sign that a lot of smart people prefer to call Australia home.

But we cannot take this for granted. Numerous surveys, mainly carried out in the United States, have shown that knowledge workers put a premium on cities with lots of amenities, and a good environment and lifestyle. Multiculturalism, social pluralism, and cultural richness emerge from these studies as key correlates for the locational choices of footloose knowledge workers.

We know that people's attitudes to careers is changing. In an information economy, knowledge workers become self-employed talent, expecting to work across many different organisations and to move from location to location over the course of their careers. Mobility and change is the name of the new game. This is having very subtle implications for the engagement of people with their local communities and country of birth.

A recent article in the English Spectator magazine drew attention to the growing trend for people from the United Kingdom to spend more and more time in second homes on the continent or in the United States. This points to a subtle shift away from traditional notions of a principal place of domicile. The point is that there is groundshift, for the elites of the information economy, away from traditional linkages between people and place. This is the reality behind the jargon about virtual communities, and a cosmopolitan class of person.

The old cliché about someone being a citizen of the world now takes on a new significance. From a national perspective, the issues with people movement are much more complex than the simple calculus of "brain drain" versus "brain gain". The knee-jerk response that the answer is to lure our expatriates home, and to try and keep them here, is not necessarily straightforward. World class people will gravitate to where the action is: the global hot spots in their field, whether science or business. As South Australia's Andy Thomas says, it would be hard for him to be an astronaut in Australia.

A contrarian viewpoint is that a pool of well-connected expatriates can be a positive asset for any country. An Australian diaspora, a global tribe of Australians, can be hugely beneficial in connecting Australia into the world and to global centres of power and activity. In this view mobility creates a pool of globally networked people which can become an extended resource pool for the nation. This turns what could be seen as a disadvantage into a potential source of competitive strength.

In the 21st century the far-flung pool of expatriate Australians becomes a valuable resource which calls out to be harnessed and used. The new strategic response is to see this as the creation of a worldwide web of influence. The Information Economy now provides the impetus, and the means, to connect this extended "family" back into the life of the national community. There is the opportunity to create a sense of extended community, and "virtual citizens".

Economies like Australia have to market themselves, and capture global attention, as smart places where people are doing interesting things, and in which highly mobile professionals will find it attractive to live and work, or at the very least be plugged into from anywhere around the world.