European economies are superior when it comes to attracting, developing and retaining top talent, according to a major new study by the World Competitiveness Center at IMD, the leading global business school.
The prestigious annual IMD World Talent Ranking, assesses the methods countries use to attract and retain the talent their businesses need to thrive.
Europe continues to dominate the 2017 list, with 11 out of the 15 most talent competitive economies based on the continent, after a strong performance in 2016. Switzerland, Denmark and Belgium remain the most competitive countries in the 2017 IMD World Talent Ranking.
Austria, Finland, the Netherlands, Norway, Germany, Sweden and Luxembourg make up the top-ten.
The study draws on an in-depth survey of thousands of executives from 63 different economies, and more than two decades’ data from the IMD World Competitiveness Center.
The IMD World Talent Ranking is based on countries’ performance in three main categories — investment and development, appeal and readiness. The three categories assess how countries perform in a wide range of areas. These include education, apprenticeships, workplace training, language skills, cost of living, quality of life, remuneration and tax rates.
It is European countries’ outstanding education systems that set them apart from the rest of the pack. On average, each has a high level of investment in education accompanied by a superior-quality educational system, from primary to tertiary levels. This allows them to develop local talent and at the same time attract foreign, highly-skilled professionals, which many European businesses rely upon to perform.
European economies perform well in all three talent components of the ranking — appeal, readiness, and investment and development.
The research suggests Germany, Europe’s economic powerhouse, continues to play a starring role in sustaining the continent’s talent competitiveness.
Arturo Bris, Director of the IMD World Competitiveness Center, said: “Germany is one of the largest exporters of talent and the country also attracts talent from across the world.
“Despite criticism from some quarters surrounding immigration, Germany’s policies sustain its access to the international talent pool.
“However, with the European crisis still taking its toll on the German economy, the country has slightly decreased its total expenditure on public education.”
Elsewhere, Ireland ranks 14th, the United Kingdom 21st, Portugal 24th, and France 27th. Spain is 32nd, followed by Italy (36th) in the lower half of the ranking.
Denmark is the highest-ranking Nordic country overall at 2nd in the IMD World Talent Ranking. It is ranked 1st in the investment and development category, with a strong performance in expenditure on education (5th). The country ranks 10th in appeal, mostly because of its effective implementation of apprenticeships and the prioritization of employee training. Denmark is also ranked second for language skills.
Finland comes in the 5th position, largely as a result of its performance in the investment and development, and readiness categories. Norway (7th) and Sweden (9th) perform strongly in investment and development, and they also perform well in appeal. Elsewhere, Iceland ranks 18th in the IMD World Talent Ranking.
While the Nordic countries perform well in some areas, they slightly lag behind other economies in terms of their appeal to foreign workers.
Arturo Bris, said: “Fundamentally, the Nordic economies have a very high quality of life, extremely good educational systems, and massive investment by the public sector in education.
“At the same time, the Nordic countries remain difficult for foreign talent, mainly due to the high cost of living.”
In Eastern Europe, Estonia is the highest-ranking country at 29th, followed by Lithuania (33rd) and Poland (34th). Their performance comes mostly from their emphasis on the investment and development factor, with Estonia also ranking relatively high on the readiness factor.
Besides Mongolia and Venezuela, which capture the last two positions in the IMD World Talent Ranking, the lower places are dominated by Eastern European countries like Croatia, Romania, and the Ukraine. While the decline in the latter is due to the investment and development of domestic talent in addition to the political crises that characterize the area, Croatia and Romania’s decline is partially explained by the decrease in the appeal and readiness factors.
The full study and the 63 individual country profiles are available here.
