The World's Top Innovators: The War for Global Talent

As with capital flows, for half a century the US has run a 'deficit' in engineers and technologists that has been made up by inflows from the rest of the world. In the 1940s and postwar years, a braindrain from Germany and Western Europe bolstered advances in US science and space research; in the 1980s and 1990s, Asian students flocked to California to study and stayed to make their fortunes in IT.

by Soumitra Dutta and Simon Caulkin, World Business
Last Updated: 23 Jul 2013

But in an article in the Financial Times earlier this year, Intel chairman Craig Barrett warned that that was no longer the case, as tightening security considerations at home and entrepreneurial opportunities abroad redrew the global map of human capacity.

On its own, he said, the US was incapable of meeting its needs for science and engineering graduates. "In a global, knowledge-based economy, businesses will naturally gravitate to locations with a ready supply of knowledge-based workers," Barrett wrote. "The hard fact is that if we cannot find or attract the workers we need here, the company - like any other business - will go where the talent is located."

Pressures such as these, coupled with falling productivity in traditional corporate R&D labs, are leading to more 'distributed' patterns of innovation, in which companies cross porous national boundaries in search of specialist creativity - for example, software in India, manufacturing research in China. The idea can be taken even further: in Procter & Gamble's 'open innovation' model, the company has committed itself to a goal of leveraging its own capabilities by sourcing half its new ideas from outside the company.

Such trends have implications for national policies and programmes. In the UK, the Advanced Institute of Management Research (AIM) argues that just as well-chosen offshoring delivers benefits to both parties, international trade in innovation is potentially a strong positive-sum game. The aim, therefore, should not be to protect national 'fortresses' of competitive innovation, but to gain leverage by developing skills in cooperation and joint research.

"China and India provide opportunities for innovation and scientific collaboration that can benefit the UK and the wider world," says AIM, adding that institutional factors - property rights, transparency in public funding, excellent universities and effective regulatory regimes - can be a powerful enabler of knowledge transfer and integration.

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