As global competition for skilled human capital grows in the developed world, many Latin American countries experience large annual losses. About half of companies in the region struggle to find qualified staff, compared to 35% of OECD member countries. This situation, in the medium and long term, will have serious consequences for the competitiveness of the countries in the region.
In recent years, several countries in Europe and North America have been engaged in a head-on fight to attract international talent. Canada’s Office of Immigration, Refugees and Citizenship mentioned that the country requires around 400,000 skilled immigrants and recently granted around 90,000 permanent residences to students.
In 2020, Germany passed its new immigration law that facilitates the arrival of people with technical and university studies. And in the UK, after the Brexit and the exodus of about a million workers, Prime Minister Boris Johnson announced and implemented visas for graduates of leading global universities and reformed its immigration system to attract “global talent”.
Demographic changes are putting increasing pressure on rich countries to attract large amounts of human capital. What role does Latin America play in this global struggle for talent?
To Latin America subsidized for rich countries
Almost all middle- and high-income countries in Latin America have scholarship schemes so that talented young people can train at foreign universities with the aim of returning and implementing this knowledge in their countries of origin. In practice, however, in many cases, these schemes subsidize training in the richer countries of the global north, and these countries end up with the trained personnel.
In the US alone, visa applications from highly qualified people in Brazil have increased by 30% in the last year, while during the government of Dilma Rousseff, more than 100,000 Brazilians studied in around 30 countries financed by the state. However, few have returned, and for those who do return, the situation is far from promising, as there are not enough vacancies to receive these staff and many must resort to underemployment, occupying positions for which they are overqualified.
Thousands and thousands of biologists, engineers and doctors, among others, cannot find positions in their countries with staggered careers, adequate salaries or infrastructure to develop professionally. But this isn’t limited to staff with graduate degrees; this is also true for technicians such as nurses, operators and even professors who also decide to start their journey to the global north.
Investment that does not return
As the world moves towards a new form of knowledge capitalism, Latin America has been left behind. Not only do we experience large emigration movements of medium and highly qualified personnel, but the impossibility of financing new forms of business or innovating keeps countries in the region in the middle-income trap where, although it is true that there are some incomes (mainly raw materials) that provide income to our countries, these are not enough to advance to the category of developed country.
In the case of Peru, since 2005 and even before the pandemic, more than 150,000 people emigrated a year, more than double the number during the most critical years of the 1990s, when the number did not reach 75,000 annually, according to the Institute. of Statistics and Informatics of Peru. More than nine out of 10 emigrants are young people between the ages of 18 and 35 with secondary and tertiary education. While in the case of Venezuela, the mass exodus of recent years has affected a huge proportion of the population and these young people, for the most part, will not return.
One of the effects of this massive drain on human capital is that countries have less pressure to build systems to retain highly qualified personnel. In the private sphere, innovation does not take off due to the lack of adequate infrastructure for it to materialize.
While skilled people migrate en masse, our countries have begun a gradual decline in birth rates, gradually moving towards a production trap where there will be fewer and fewer young people of working age and more retirees, that is, our countries. they get older and older, but not rich, contrary to what happens in Europe.
This phenomenon has important economic repercussions given that, in theory, middle- and high-income countries have limited time to transition to developed economies. With a limited capacity to absorb highly qualified personnel, Latin American countries will continue to decline due to lack of competitiveness while the cost of living, including food and others, gradually increases due to urbanization and rising production costs.
Therefore, countries in the region are not at a level that allows them to compete with the level of technological development of countries in the global north, nor do they benefit from relatively low wages to compete with low-income countries with labor-intensive industries. This is the cost Latin America faces for exporting not only natural resources but also human resources.
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