11
2
Globalization and
demand for skilled labour
The knowledge economy is at the centre of development in the current context. Knowledge
economies have grown faster and many of them have sustained a momentum of growth over
the past decades. Employment opportunities, too, have expanded globally on two fronts. First,
there has been an increase in employment in the developed countries where production is more
knowledge-based. Skill requirements are high and have attracted highly skilled workers from other
countries. In fact, the migration of highly skilled workers has been encouraged to meet the skill
requirements of the expanding knowledge economies
of the developed countries, led by the USA.
Second, there has been an increase in domestic employment opportunities in developing countries
due to the increase in foreign direct investment (FDI) and the growth of private enterprises, including
fi
rms focussing on outsourcing.
Let us examine the effect of the increase in employment opportunities in the developed world.
The skill requirements in the knowledge economy are not only different from that of the traditional
manufacturing sector, but also the level of skills required and the quali
fi
cations demanded for job
entry are also high and continuing to rise.
Studies show that, in countries such as Canada, nearly
70 per cent of all new jobs will require a post-secondary level of education (International Labour
Of
fi
ce – ILO, 2004).
Many of the knowledge economies have not been in a position to produce the skills required. Even
countries with the largest network of higher education institutions, such as China, India, and the
USA, could not produce highly
skilled workers in suf
fi
cient quantity to meet their domestic demand
and the global market demand, especially in the knowledge-intensive segments of the economy.
This has resulted in competition among the developed countries to attract the best brains from
other countries, notably from developing countries. This in effect led to a ‘battle for brains’ (Chanda,
2000) or a ‘global hunt’ for talent (Kapur and McHale, 2005) to maintain the technological edge
and the economic competitiveness of the host countries.
Many developed countries changed their visa rules to accommodate
skilled and information and
communication technology (ICT) workers from other countries. For example, the introduction of the
H-1B visa in the USA has helped attract skilled workers from other countries, and helped the in
fl
ow
of highly educated Asians. Nearly one million highly skilled workers entered the USA under the H-1B
visa scheme between 2000 and 2003. The European Union is introducing the ‘Blue Card’ visa to
attract skilled workers from developing countries. It is also noted that the average quali
fi
cation
level of the migrant population is higher than that of the indigenous population. For example, while
9 per cent of all Americans born in the USA possess a university degree (Master’s level), 38
per cent
of Indians born in the USA possess the same. This shows how the visa rules and immigration
policies are biased in favour of the highly skilled (Kapur and McHale, 2005). Countries such as
Australia, New Zealand and the United Kingdom (UK) have introduced point-based emigration
policies which give preferential treatment to candidates with higher level quali
fi
cations.
The second aspect, namely domestic employment opportunities
in developing countries, has
also increased in the context of globalization. Liberalization policies, introduced during the
structural adjustment period, have helped attract foreign direct investment (FDI) and multinational
corporations (MNC) to developing countries. Outsourcing became an attractive strategy for large
International Institute for Educational Planning www.iiep.unesco.org
12
Globalization, economic crisis and national strategies for higher education development
fi
rms in developed countries and it became an avenue for lucrative
jobs in some developing
countries. One of the reasons for the expansion of FDI and outsourcing activities is the intellectual
environment created by the network of universities and the highly skilled labour pool in bene
fi
ciary
countries. A very good example of this phenomenon is the emergence and rapid expansion of
outsourcing
fi
rms in countries such as China or India.
As can be seen from T
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