Switzerland, the United States, the United Kingdom, Israel, Australia, Canada, etc., are known for their skilled labour shortage and implementing policies to encourage immigration. But some countries are focusing on brain gain instead. With a never-ending pandemic, including new variants, economies are finding it hard to rely on foreign labour. Wouldn't it be a good idea if expatriates returned to serve their home country? Here's an insight into what's happening around the world.
Australia's "Think Local" concept
Anathea Ruys, new Marketing Director of UM Australia, formerly at Dentsu, USA, Jane Huxley, new CEO of Are Media, formerly at Spotify UK, Nicholas Ingate of HighSnobiety (global publisher of youth culture), former resident American, Stephen de Wolf, former Creative Director of Bartle Bogle Hegarty (BBH) in London. These people have one thing in common. They all returned to Australia during the pandemic. After occupying key positions in prestigious groups abroad, they found similar positions on their return to Australia. These are just a few examples of brain gain from the beginning of the crisis.
In May 2021, the Department of Foreign Affairs and Trade revealed that 538,000 Australians had returned from overseas since March 2020. Another 36,000 had already registered to return. In March 2021, 480,000 were back in Australia. The state thus welcomed 58,000 more citizens in two months, followed by a new wave of returns in the following months. Does the pandemic only account for this brain gain, or has the Australian government introduced new measures?
For many, such as marketing directors, literary agents, managers, engineers, etc., the decision was not driven by economic reasons. These Australians left a successful career abroad to return to Australia. However, not all of them are currently working for Australian companies. The global health crisis was a boost for digital nomadism, which transformed the importance of the workplace. For some Australians, remote work is the new norm since their return. And most of them believe that this can be a blessing for the country's economy. "I decided to return to rediscover my country", says a communications officer. "And since we're at the heart of a pandemic, we might as well experience it at home. There are many ways in which our presence is beneficial to the country. For example, I do my shopping at the convenience stores; I pay taxes, which keeps the local economy going. "
The Australian government relies heavily on this highly skilled workforce. Known as the Land Down Under, the country is boosting its potential, reinvesting in its culture, and therefore, in its inhabitants. Even the most restrictive measures introduced since the beginning of the crisis have the underlying aim to bring Australians together around a common project, a common vision. The ultimate objective is to see the end of the crisis and the return of growth. In an interview with the Australian media B&T, Nicholas Ingate said that he is delighted to be back after having lived and worked in Australia, Europe and the United States. "I can not wait to bring my international information and contribution to the (local) market, to help brands think global and act local [...] ”. In his opinion, Sydney and Melbourne have nothing to envy New York or London.
Think local, boost Australian culture and know-how. Is it a sustainable approach? In 2021, 37% of Australians who returned home were convinced about staying. But 35% conceded that they would consider a move abroad as soon as the situation improves globally.
France: Focus on reindustrialisation
"France Relance" was launched in September 2020 as a restart and growth project for all businesses affected by the pandemic. However, this plan has greater ambitions and is in line with the presidential program "France 2030". Its main objectives are to speed up reindustrialisation and fight against the brain drain. France is criticised for neglecting the industrial sector in the 1980s by focusing on services. This led to the boom of the tertiary sector and the erosion of the industrial sector. While the industry is still alive, the proportion is much lower compared to other States, particularly Europe. As a consequence, researchers, engineers and other talents left France for Germany, the United States and Canada, where governments are investing massively in industry. In 2018, industry represented 13.4% of French GDP, compared to almost double in Germany (25.5%). Paradoxically, the global health crisis acts as an accelerator. France is now making efforts to increase investments in the industrial sector.
The first results look positive, as evidenced by the Renault / AESC partnership in Douai, an industrial stronghold in northern France, a historic Renault site. On June 28, 2021, the automaker and the subsidiary of the Chinese giant Envision invested 3 billion euros in the production of batteries. On the same day, the French car company embarked on a new production of high-tech batteries by partnering with Verkor, another French company based in Grenoble, the country's "Silicon Valley". The Grenoble region is growing from innovation to investment: with "Displey Valley", a new city inaugurated on September 2, 2021. It intends to concentrate the best of European technology in microelectronics and flat screens. Further north, in the Lille region, the EuraTechnologies park is another “Silicon Valley” that has attracted startups and other talents. Created in 2009, it was the first startup incubator and accelerator in France and the third in Europe. It was joined in 2013 by La Plaine Images, an incubator and accelerator focused on the creative industries (animation, video games, virtual reality, digital marketing, etc.).In the same year, the government, led by former President Hollande, launched the French Tech, a network designed to bring together and promote French startups.
France communicates massively around these new structures and encourages partnerships between educational establishments and businesses. La Plaine Images is also home to 3 schools, and surrounding companies with international influence, like Ankama, the French pillar of digital creation, regularly recruit their students. Same spirit in the health sector, especially in the fight against Covid. Air Liquide, a world leader in gases, technologies and services for the health industry and Bastide Medical, a key player in home care, are a few examples. France is looking to retain talents right from college and even before. High school forums and observation internships in companies (from college) attract young people to French industries. However, salaries offered in certain branches are not competitive enough compared to other countries.
Tax benefits in Israel
Israel's high-tech sector is currently suffering from a skilled labour shortage, and the health crisis has only made the problem worse. Science and Technology Minister Orit Farkash-Hacohen recently announced a new plan to encourage local companies to hire foreign talent. In fact, it's now easier for expats to apply for jobs from abroad. However, the government agrees that it cannot only rely on global talent. So Farkash-Hacohen urges Israeli talent living abroad to return to the territory so that they can support the economy. More than $ 20 billion have already been invested in this project in 2021. Amid the pandemic, Israel - which also stands out in terms of vaccination and the fight against Covid - is increasing its investments. But the country's hasn't been able to meet its ambitions yet due to the labour shortage. This new law is expected to encourage the return of Israeli expats.
Negotiations are still underway, but the government has already defined the contours of the future law and its main benefits. A two-year contingency plan, it would grant tax relief to all qualified Israelis who have lived abroad for at least a year. The exemption would apply to all income earned abroad as well as the continuity of their expat benefits after their return, such as tax exemption on the costs associated with their stay abroad and their return to Israel for two years. For qualified foreigners, the government is proposing a lower tax rate (for two years) on income earned in Israel and help with relocation and settling in Israel. The government wants more chances of attracting the greatest number of Israeli and foreign talents.
Bringing the youth back to Croatia
Unlike Israel and its tax benefits, Croatia is offering cash, up to 26,000 euros, for Croats who decide to return home. This is an emergency measure as the country has recorded a sharp decline in the birth rate for the past years. The country's joining the European Union (EU) in 2013 accelerated the brain drain, especially among young people. The pandemic has made the situation even more alarming. A global baby crash was reported (-23.3% of births in Taiwan, -10.3% in Russia, -13% in France, etc.). In Croatia, the population has already lost its trust in the government promises - which might explain fewer births and little attractiveness. Entire regions look like deserts, like the Lika Plateau. Jovana, a Serbian immigrant, interviewed by the French newspaper Le Monde in October 2020, said: " We are going to move to the coast. There, at least, our children will not be four in their class". But the government wants the opposite, and this is where it becomes really challenging.
By promising a sum of 26,000 euros, the government is looking forward to reconciling Croatian talents with their country, especially young people. Because in Croatia, too,
there is a skilled labour shortage. To get out of the crisis and fight unemployment, there is now a greater focus on industry and new technologies: shipyards, automotive, etc. Faced with the Covid, the state is accelerating the transition to innovation and technology to attract young talent. So far, the results look promising. According to the Croatian Chamber of Commerce, the IT sector has grown by + 14.7% since the beginning of the pandemic. The IT market share has grown four times faster than the national GDP. Croatia's new challenge is that of making industry and new technologies its leading economic pillar after the crash of the tourism sector. This could be a new motivation for Croatians to stay in the country.
History is also helping in a way. The epic story of Nikola Tesla, a native-born inventor-engineer, is proof to the world, especially the Croatians, of the nation's creativity and potential. More recently, in 2006, Silvio Kutić created Infobip, an IT and telecommunications company which today is a global leader in omnichannel communications. In 2009, Mate Rimac, who was then barely 19, produced the first 100% Croatian electric car. This is was the start of a revolutionary industry. His company, Rimac Automobili, specialises in the manufacturing of electric hypercars. The media compare the genius inventor to Tesla. What Silvio Kutić and Mate Rimac have in common is that they attended Croatian universities. The government is using these arguments to retain expatriates, at least 4000 to 5000 of them. Corruption remains a significant challenge, though.
Attracting and retaining foreign talent and local skilled labour are part of the same struggle. Contrary to analyses opposing foreign and local potential, both contribute to countries' economic growth. Business excellence attracts both foreign and local talent, although this virtuous circle is more appreciated at the global level. Better communication between people ensures a better flow of information and sets the pace for creativity, innovation, and economic growth. 2022 promises to be another year challenging year for countries already having to deal with the pandemic so that they do not lose their investments and to ensure sustainable growth.
