Talent as the Core of Economic Prosperity
- By Felix Kugel
- Mar. 17 2010 00:00
Vice President Manpower Inc. (USA) and Managing Director of Russia & CIS
As we have already seen, all over the world, and especially in the Organization for Economic Cooperation and Development, there has been a major shift in values throughout 2009. Many of these shifts call for revaluing both work and the individual as central elements of our global economic system. Such a “people-centric” movement will have a significant impact on the world of work. Perhaps at the core of the movement lies a reconsideration of the relative values of capital and people, recombined as the concept of “Talent,” not only in a corporate sense but also in a broader economic context.
“Talentism” is an emerging concept based on the notion that talent, as capitalism once was, is now the scarce resource in the economic world. Therefore a nation’s or a corporation’s competitive advantage relies on the talent resources it can generate and mobilize for its development. This concept could also, in turn, explain how talent could become the new major agent of economic growth, with great potential for economies at all levels of development and for all types of companies.
When Karl Marx wrote “Das Kapital,” capitalism was also an emerging theory and certainly not a direct political statement, even if it later led to socialism and communism. He clarified the way the economy worked in the 19th century, and the theory was both compelling and predictive. It was an intellectual revolution at a time when the ownership of capital — industrial or agricultural assets — was the means for dominating the economy and capturing its outcome.
Capital is a complex word whose meaning has changed over history. Until the 18th century, the most important asset or capital to own — one that generated an income or rent for the owner — was land. The 19th century saw the emergence of industrial capital, where the capitalist was owner of the means of production. The 20th century allowed more fluidity between industrial capital and financial capital, and vice versa. However, fundamentally there was nothing new, since the owners of capital were still the beneficiaries of the “rent.”
The notion of human capital emerged at the end of the 20th century, and it is only now that a different allocation of the rent is beginning to emerge. The owners of rare skills or capital — the Talent themselves — are able to extract more and more of the economic rent generated by the economic activity.
There are many parallels with capitalism in today’s talent situation. The individual owners of skills can extract a far larger share of the outcome than they could before, and corporations and countries that control the largest pool of talents can extract the greatest value from overall economic growth. Although human capital cannot be owned as financial capital, the best talents can still be attracted, mobilized, combined and developed in productive ways by those players that have the best work force strategies.
Talentism shares a number of significant characteristics with the concept of capitalism. Like capital, talent is a scarce resource and therefore a potential competitive advantage for those that can control significant quantities and qualities of it. It is also a resource that can be leveraged in different ways and bring different returns to those who are able to maximize the value that talent represents.
It is absolutely clear that a talent strategy is now as important as a marketing or finance strategy for corporations operating in today’s multipolar world. To stay competitive in the changing world of business, companies have to develop new tools to attract the very best candidates. In this case, all corporations will need to find new and innovative ways to communicate with individuals, including through all forms of social networks, from LinkedIn to Twitter. A particular competitive advantage in the war for talent will lie in the ability to invent new ways to galvanize networks of current and future candidates, current employees, retired employees and alumni.
Talent scarcity was an issue before the crisis and has evolved into a talent mismatch with the recent economic downturn. In an environment where companies have been under pressure to do more with less, the same has applied to their work force. It will be a major and growing issue in the next few years, as the growth of emerging markets requires armies of skilled resources, and as the many retiring baby boomers in OECD countries are not replaced in sufficient quantities by local resources. The ability to attract and retain talent will thus become a competitive advantage everywhere in the world.