Would it be better if our top talent emigrated … for a while, at least?

 

If (or as I fear, when) England fail to make the final stages of the World Cup in Rio, the post-mortem is predictable:  “We need fewer foreign players in the Premier League. We need quotas so that the majority of the players are English. Something must be done, and done immediately.”. Without being defeatist, it is worth heading off this knee-jerk response before the plane leaves for Brazil. Partly because it would be disastrous for one of the UK’s greatest success stories – the modern Premier League. But more importantly because this debate illuminates some important, but little talked about aspects of migration policy. 

Let’s look at the football situation. It’s clearly true that English players are a minority in the Premier League. They played only 32% of the total minutes played last year. 68% of players are not English. The foreigners come from all over the world. The largest contingent is the French and the Spanish, but they only have 10% each. The UK is not unique. If we look at the European nations most likely to make the World Cup final, then their percentage of overseas players has been growing. In spite of being the biggest country in Europe, only 50% of the minutes played in Germany’s top league were played by Germans. The equivalent figure is 59% in Spain. The high performing European nations and leagues are big importers of global talent. (If, however, we look at countries that didn’t make the world cup, the story is the opposite. Close to home, we can see that in Scotland 85% of the minutes played were from Brits.) Clearly it wasn’t always like this. In 1992, there were just 11 foreign players in the Premier League. Today there are more than 11 Brazilians playing in the same league, and even more Belgians. The other way to tell this story is to look at the various national teams. In 2013, 9 of the Spanish squad played abroad, 23 of the Uruguyans, 11 of the Dutch, 16 of the Portuguese and the Brazilian and 20 of the Belgians. By contrast, the English squad had 1 who played outside England – Fraser Forster and he played in, ermm, Scotland! And it is this last point which speaks volumes about  England’s failure to participate in the global economy of football. Across all the European leagues, I can think of only 3 English players earning their living by playing in Europe! It is incredible that of all the thousands of young men who crave a career in professional football and who bemoan the lack of space in the Premier League for English players, only 3 of them have gone abroad!

The wider lessons of the Premier League for our migration debate are:

(1) On the immigration front, when we attract the best people in the world to come to the UK, they push up wages, they drive exports, they create global brands and they attract investment. They bring money into the country, as overseas spending follows them around. Much of the Premier League’s value lies in its ability to pull in overseas payments for TV rights, replica kit, etc. Nearly 1m football tourists visit the UK, spending more than £700m a year. The League and its clubs pay over £1bn in taxes and the overseas players spend part of their earnings in the UK. This impact is replicated in other key industries where countries compete to attract a footloose global elite of professionals. The desire and need for the world’s elites to cluster together means that virtuous (or vicious) circles are created as locations rise (or fall) as global magnets for talent. We can readily think of the UK’s success in the glamourous worlds of science, advertising, architecture,fashion design, academia, investment funds, film and theatre, Formula 1 engineers, top surgeons, pop music, TV formats, etc. But is is also true of the less glamourous elite pools which are vital to our comparative advantage as a nation – actuaries,  data scientists, accountants, agronomists, car part designers, aerospace engineers, etc. 

(2)But this is only half the story. There is a big difference between having a Premier League at home through importing talent and becoming World Cup Champions by a having a big enough national talent pool which earns its living at home and abroad. This is true for the other global elite talent pools where, to use a footballing term, UK talent needs to play away as well as at home. If we want the best talent pools in the world, then we need to start worrying about getting the right emigration as well as immigration. This sounds counter-intuitive – why would we encourage our best people to leave the country? Well, much of our emigration is short-term – to count as emigration, people need to leave for 12 months or more. But the majority come back after working or studying abroad for a number of years. 90% of emigration is of working age adults. In 2011, for example,150,000 British citizens emigrated but 100,000 also returned, leaving a net migration of 50,000. Interestingly, British emigration increases in the good economic times – it is something people do when they feel strong, not weak. So when we say more emigration of our elite people is a good thing – it’s about them getting experience and opportunities they can’t get in the UK, before coming back again as even greater talents and wealthier than when they left. And if they don’t come back, we should see them as a ready source of global contacts to assist our international trade and liaison.

So if emigration of our best people can be a good thing, do we have enough of it? Compared to other countries we actually have lots of emigration. About 5m British born people live abroad. Of the high income OECD countries, the UK has the largest number of citizens living abroad, far more than those born in Germany or the US, for example. By proportion, Portugal, Greece and Ireland have higher percentages living abroad, but from smaller populations. If we look at countries with large numbers of immigrants to the UK, it is interesting to note that Poland and the UK have the same proportion of their population living abroad, whilst the number of Pakistanis living abroad is about the same as the number of British. But it is salutary to look at where the Brits go. The biggest destination is Australia – approaching half of all emigration in 2010, with the US coming second. Indeed, two-thirds of British born citizens living abroad are in the Anglophone countries. (Unfortunately, these countries are not very good at football, or we’d be fine for the World Cup!). About 15% of British born citizens are in Spain, France or Germany. Beyond this, the numbers per country are small. Why this matters is that the numbers are tiny in the emerging economies, which have the highest growth potential. The BRICS (Brazil, Russia, India, China) countries have about 80,000 British born people living there, less than 2% of those Brits living abroad. There are 10 times as many Brits living in New Zealand as in either India or China. The same is true of the MINT countries (Mexico, Indonesia, Nigeria, Thailand) with some 70,000 or so Brits, over half of whom are in Thailand. So whilst we have lots of emigrants, we don’t necessarily have the right sort of emigrants in the right places.

If we accept the counter-intuitive argument that we should encourage our best people to leave the country for a while, what might this mean:

(1) Should we be encouraging more of our students to study overseas? If we want our talent pool to be the best in the world, then shouldn’t we make sure that our best students go to the best universities in the world? Other countries do just that (e.g. a quarter of international students at US universities are from China). If we look at the all important STEM subjects (Science, Technology, Engineering, Maths), then in almost every subject the UK has 2 of the top 20 universities in the world. On the one hand, this is a good achievement. On the other hand, in most subjects the US has between 14 and 18 of the top 20 universities. So why wouldn’t we want our best students to go to those universities to be a part of the global elite? But in 2011, whilst the UK had a a Premier League performance in attracting overseas students here (13% market share, second only to the US on 23%) and 2m UK residents were registered students with UK universities, only 6,000 UK residents went abroad to study. If we see higher education as a global product for sale (as many other countries do), then why are so protectionist about keeping UK demand in the UK? In other markets, we see global competition as good for UK consumers and good competitive pressure on UK suppliers. So, maybe we should worry about being under-represented in the world’s best universities and push our best HE consumers to buy overseas?

(2) If we want to sell more services to the emerging economies, how do we get more Brits to emigrate there for a while? Selling services overseas is hard work. Unlike making a car in Sunderland and putting it on a ship, services often have to be delivered, at least in part, in the other country. They require cultural insight and adaptation. Sales rely on personal relationships and interaction with the overseas buyers. And, like football, they rely on having the best global talent. It also means that much of the revenue from sold services stays overseas, paying for local delivery. Many economists are dismissive about the potential for services to pay our way in the world. But we don’t have any choice. Unlike Australia, Russia or Canada, we don’t have masses of natural resources to export. Unlike Germany we don’t have enough manufacturing exports (yet, at least) to buy what we want from the rest of the world. But we are good at services. Just think (in terms of A-Z), of the services beginning with an A, where we are world class – architecture, advertising, accountancy, actuaries, agronomy, arts, academia, etc. The UK share of global exports of services is 6.4%. Not too bad? But our share has fallen by 20% since 2000. Meanwhile Germany has increased its share by 10%. And our share of trade more generally with the growing emerging economies is under pressure. For example, our share of India’s imports has halved in the last decade. There is a need to have plenty of Brits on the ground in our export markets. As outlined above, we lack these numbers in the emerging economies. And in our mature markets and popular destinations for our emigrants, the emerging countries are themselves are pushing us out of place. 60% of permanent resident visas in Australia are now granted to Chinese, who will soon replace the British as the biggest immigrant group. Indeed they already have in Sydney. Even more strikingly, the emerging economies are rapidly populating the next generation of emerging economies. In the last 10 years, more than 1m Chinese workers have moved into sub-Saharan Africa working for 2,000 Chinese companies. Do we need a concerted campaign to encourage British talent to spend time abroad? “Go East Young Man”? Should we offer grants, tax breaks, remission from student loans, etc to individual British talent who go on time limited economic visas to our target countries? Should we offer similar assistance to UK employers who are exporting British talent into our target countries?

(3) If we want to tackle our skill gaps, rather than relying on short-term imports should be relying on long-term exports? The Home Office publishes a formal list of very specific shortage occupations, where it will allow immigration from non EU countries. Looking at the 2013 statement, it is clear that the shortages largely result from sporadic historic demand for those skills in the UK domestic market. It is equally clear that that there has been and continues to be demand for those skills overseas. If there had been more people willing to work overseas as well as in the UK, then we could have had a much larger British talent pool in these shortage areas. For example, we don’t have enough railway signals engineers. We get into a circular argument about spending more on railway engineering, where we keep spend low because skills supply is low. But if we increased total demand for these skills by more people working overseas for periods of time, then the supply pool could be increased.The 2013 Home Office statement lists similar examples – geologists and drilling engineers for oil and gas; tunnelling skills; electricity transmission engineers. UK infrastructure spend will increase over the next 5-15 years. But it will dwarfed by massive infrastructure investment in Asia and Africa. Total demand in the world will grow sharply. But will our supply of skilled people increase so that we can go out and fight for our share of this overseas investment, as well as deliver what we need here? This means signalling this demand to our workforce, so that they get themselves skilled and gear themselves up for overseas work. It also means unblocking constraints on numbers getting trained (e.g. university places, professional regulation, etc) and preparing our talent for the world, rather than UK, market. Clearly, the point of exporting talent is to have more of it, not less, so more emigration of our best people only makes sense if we make sure that the total number of British people participating in global elites increases.

(4) And finally, of course, it means more British footballers getting in their Bentley (for the established ones) or onto Ryanair (for the less established ones) and playing overseas. That would give us a bigger pool of talent playing at the highest level across Europe.

The current migration debate is very focused on net immigration. But we also need to look at the other half of the equation – the emigration. In the same way that we measure and debate the numbers coming in, do we need to measure the participation rate of British citizens (vs our competitors) in the elite opportunities open to British talent around the world – whether those opportunities are in medicine, constructing infrastructure, studying at the top universities, data science, pop music or …. football? Let’s hope that in terms of the wider economy by 2018, we have got on top of immigration so that we have a Premier League in all chosen industries. But let’s also hope that we are winning the World Cup in those chosen industries because of the size of our talent pool, which has grown by enthusiastic, time limited emigration giving us access to overseas markets.

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