Switzerland and Australia top first OECD talent indicators

The prosperity of nations is increasingly dependent on their ability to attract talented and skilled individuals from abroad. Countries compete for this pool by implementing benign migration policies, which for the first time the OECD has ranked in an index.

Switzerland and Australia lead in attractiveness, appearing in the top six in three talent categories of migrants featured in the OECD Indicators of Talent Attractiveness or ITA – highly skilled workers at masters-PhD level; international students in tertiary education; and foreign entrepreneurs.

Since not all dimensions are of the same importance to every individual, the ITA allows the user to weight the relative importance of each dimension and produce an individually customised ranking showing which destination best corresponds to their own priorities.

The report, "How do OECD countries compare in their attractiveness for talented migrants", was published on 29 May 2019 along with the interactive talent index.

Country category rankings

Australia, Sweden, Switzerland, New Zealand, Canada and Ireland are ranked as the most attractive OECD countries for workers with postgraduate degrees. They have the edge in offering favourable labour market conditions and an excellent environment for highly skilled workers in general.

The attractiveness of several countries – including Israel, Japan and Turkey – was negatively affected by restrictive admission conditions.

For international university students, the top five countries are Switzerland, Norway, Germany, Finland, the United States and Australia. Some countries that have many international students – including Canada, New Zealand and the United Kingdom – fall in the ranking due to relatively high tuition fees.

For entrepreneurs, the most attractive countries are Canada, New Zealand, Switzerland, Sweden and Norway. This is a function also of relatively low minimum capital investments and job creation requirements in these countries. Greece, Mexico and Turkey lag on this indicator.

Of the 35 countries ranked in the ITA, Israel, Greece, Mexico and Turkey find themselves in the bottom half dozen nations in all three major categories of attractiveness. Chile narrowly escapes, to find itself in the bottom six in two categories — in attractiveness to entrepreneurs and university students.

The United States would rank among the top countries for highly qualified workers and entrepreneurs but is penalised by the fact that relatively few are able to obtain a visa, and the conditions for their family members are comparatively restrictive.

Whatever the existing ranking of a country, the OECD reports that most countries can increase their attractiveness simply by accelerating application procedures and offering better residence conditions to highly qualified migrants and their family members.

The OECD ITA was developed with support from the Bertelsmann Stiftung and measures the relative attractiveness of countries from a multidimensional perspective, for while in OECD countries there has been a convergence of policy frameworks, there remain significant differences in policies and practices.

Within the categories of postgraduates, tertiary students and entrepreneurs, it scores seven dimensions: quality of opportunities; income and tax; future prospects; family environment; skills environment; inclusiveness; and quality of life. It also takes into account how difficult it is for prospective migrants with required skills to obtain a visa or residence permit.

International students

The ITA uses two variables taken from proprietary data collected by the law firm Fragomen – refusal rates and processing time – that can be critical to students wanting to study abroad.

“International university students who have been admitted to a qualifying institution can theoretically obtain a visa in virtually all OECD countries but in practice face multiple constraints,” says the report.

“In order to factor in their likelihood to obtain a visa at their destination, the indicators account for university tuition fee levels for foreign students, which is a major determinant of students’ location choices.

“In addition, to capture the ease of obtaining a student visa relative to other channels of migration, the indicator incorporates a penalty based on the ratio between the share of international students in the total student population and the share of foreign-born individuals in the total population.”

The OECD reports that compared to highly educated workers and entrepreneurs, international university students are potentially attracted by a different set of countries. Before considering the actual admission possibilities, the top five choices are Norway, the United States, Switzerland, Canada and Australia.

In particular, the United States, Canada and Australia – as well as other countries, like the United Kingdom and New Zealand, where English is widely spoken – score high because of the English language use as well as their tertiary education spending.

In contrast, Norway, Germany and Switzerland dominate the 'income and tax' dimension, because their student visas permit broad access to work during studies, as well as applying the same tuition fees to domestic and foreign students.

The 'future prospects' dimension is more favourable in countries like France and Italy, which allow an easy transition to work permits after graduation, whereas countries like Chile and Turkey, that do not allow students to work during studies, fall into the bottom quartile of the 'income and tax' dimension.

Impact concerns

The OECD notes that there are “legitimate concerns” about the impact that global competition for talents has on countries of origin, notably less developed countries.

“A close monitoring of global movements of highly skilled migrants is therefore necessary to identify the winners and losers and activate, where necessary, relevant international instruments to better share the costs and benefits associated with the international mobility of talents,” says the report.

“[However], while it is important not to poach talent from vulnerable less developed countries, a significant part of the competition for talent is currently between G20 countries, which account for a large share of overall movements.

“What is more, international students acquire part of their human capital in the destination country, so that any returns represent a brain gain for the origin country.”

The OECD states that despite the enormous rise of educational levels and skills, the supply of skills has not necessarily kept abreast with increasing demand due to technological change, the development of research activities or more generally new skills needs.

According to the latest data from the OECD Database on Immigrants in OECD Countries, the stock of tertiary educated migrants increased by 108% in the OECD between 2000-01 and 2015-16. The share of migrants in the tertiary educated working-age population increased from 11% to 16%. About half of the high-skilled migrants in G20 destinations come from other G20 countries, and about the same share is in the OECD.