The Brain Drain That Is Killing America’s Economy

My spring is filled with antsy WhatsApp messages, both from American friends and those in London, Dubai, Hong Kong, Hong Kong, Singapore. They want to know my thoughts on which college is best for them. Their senior high school students have been accepted into colleges across America, Canada and Britain. Over the past decade I’ve been tracking these late teens’ decisions and the trend has been unmistakeable: Less America, more Canada. Canadian education is as good as America’s and more affordable. Waterloo universities have made apprenticeships a mandatory requirement to graduate. McGill, on the other hand has established itself as an innovation center. The next beneficiary of America’s reputational fall from grace is Europe, especially universities in England, Scotland, and Ireland. The Netherlands is very popular as more countries are switching to English education.
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Global teen talent choosing non-American higher education—and some of America’s best and brightest doing the same— couldn’t come at a worse time. The country’s demographics have been deteriorating since before the 2008 financial crisis, with economic insecurity leading to a sharp drop-off in fertility. The “baby bust” that followed the financial crisis implied that America would have fewer 18-year olds entering college by 2026—and thus many colleges would have to shutter.

COVID-19 made it possible to do this much earlier. Many colleges have closed in the South since 2008, especially those that are located in the South. However, applicants have declined by double digits across all collegiate centers from the Northeast through the Mid-Atlantic to the Midwest due to poor financial and insufficient preparation for the remote pandemic.The number of college students is dropping like never before in all types of colleges, including community colleges and private four-year universities. Many youth are forced to make tough choices between work and education, which has left educators uncertain about whether or not they will go back to school. Now, the COVID-19 “baby bust” is far more severe than even that of the 2008 financial crisis, meaning even under a roaring economic rebound scenario, many more colleges will go belly up by 2038.

Demographic forecasting is a generational exercise, and America’s shrinking youth base is the result not only of lower fertility and rising economic uncertainty, but also because the country has failed to maintain what used to be a huge edge in attracting young talent from around the world. America launched the “War on Terror” over twenty years ago, invading Afghanistan and soon after Iraq. Even as President Obama sought to rebuild America’s prestige, the annual inflow of Chinese and Indian students began to taper and decline during the latter years of his administration. Then came Donald Trump’s visa bans, border walls, and immigration restrictions. As the shocking census data shows, American immigration dropped to an unprecedented 0.1% from mid-2020 through mid-2021. That’s less than 200,000 immigrants. At this rate, America’s population may well soon Receipt.

Even with sanity restored to the White House, America’s reputation remains at a nadir. More than half the world’s population is under the age of forty. From Colombia to Morocco to Afghanistan, they’ve grown up watching America flail militarily and disgrace itself politically. The younger generation has seen America decline from 9/11 onwards to the War on Terror, the Financial Crisis and Rising Inequality.

Today’s most important battleground is people, not places. There are many ways to be successful. Global war for talentTo recruit students, workers, taxpayers and caregivers as well as entrepreneurs and investors to support healthy population, tax base and industry. However, the American youth are not easy to find. American expats have doubled in number since the 2008 financial crisis. Most of these are young professionals looking to find opportunities across rapidly growing economies.

The remote revolution is here. COVID-19 has been a “great reset” in our lifestyles, workplace habits, and other aspects of social and professional life. The same will happen for global talent migration. According to research firm IDC, more than forty percent of the global workforce—at least 1.5 billion people—is “location independent.” The capacity for remote work has graduated from latent to actual. Professionals are moving as never before, both within and across borders—and this is only the immediate mid-pandemic phase. Think about the rate of relocation after borders are opened and corporate culture has fully adapted to digital platforms. While asynchronous collaboration currently involves Google Docs, Slack and Slack for now, it is likely to expand into Github, Metaverse, and more soon.

People are leaving their jobs to escape burnout, but they promise that the next job is remote. Hacker News is a Y-combinator funder. It claims that the number of remote job postings has quadrupled from 2017.American tech companies are the pioneers in remote work. Many will be motivated to leave the United States to live abroad because of this. But they’ve also said they plan to hire the best people anywhere for each new position. The Bay Area’s coder might be in direct competition with Kenyan talent. Simon Kuper, a wryly warned journalist in Financial Times, “If you can do your job from anywhere, then someone anywhere can do your job.” Even though the Biden administration is encouraging companies to “buy American” or “hire American,” their DNA guides them to constantly arbitrage the world for taxes, technology and talent. An American friend who works for a tech giant recently traveled to Portugal to help recruit Europeans as well as Americans that have established roots there. He also helped to organize them into a co-working space.

Numerous colonies are being set up to cater to the needs of mobile youth looking for low-tax, sunny places. These include Tulum in Mexico and Athens in Greece. The digital nomad is a geographical mercenary. They use websites such as Expatistan, and nomad-themed messaging boards to determine where they can find the best combination of cost and quality of life. And those websites are steering them towards Berlin, Prague, Tbilisi, and Bali—not New York and Los Angeles. VanHack, one the biggest platforms of digital nomads working in the software sector, claims that Canada, Britain Germany, Ireland, Spain, Spain, Canada and the Netherlands are the top five destinations to relocate among more than 600,000 developers.The Americans have made Europe great again.

A generational shift has occurred that Boomers and even older Gen-X don’t quite grasp: Today’s young professionals don’t identify themselves by their nationality—they identify as talent. Millennials, Gen-Z, are happy with their portfolio careers. They work irregular hours in exchange for more freedom to travel, and for more pay.

A business degree is a powerful tool for mobility. An MBA can be considered a passport. The world’s eight hundred business schools spread across fifty countries are perhaps the leading agents in stirring the pot in the global war for talent. These schools recruit students from all over the globe and fight fiercely for their graduates to be accepted into multinationals that then distribute them throughout the world.

Although corporate executives no longer have control over where their employees are, they still decide who rises to the top. To avoid inefficiencies caused by asynchronous coordination, executives tend to cluster close to headquarters. Human resource departments now emphasize longitude. For the same reason, venture capital funds will often have board members in two out of the three—America, Europe, or Asia—but rarely all three. The end-state for global companies might resemble the “Twenty hubs but no HQ” model business guru CK Prahalad prophesied nearly two decades ago.

Many countries desire to be these hubs. Smart governments have opened the door to this global nomad class. Before Covid, almost no nation had special “nomad visas” save for Estonia. Now almost 70 countries do. Dubai’s Golden Visa program has attracted hundreds of young entrepreneurs who are given grants and other perks to innovate the country’s AI and drone programs. Sweden and Singapore have “tech pass” programs that actively give grants to start-ups. Many governments are adopting more tiered migration system, which allow residents to climb the ladder from citizen and stakeholder to migrant.

America is history’s greatest winner in the war for talent, but the competition is heating up. An entire decade ago, the United States still welcomed more immigrants than all the other rich countries. But as of 2019, according to a recent CATO Institute study, that gap had narrowed to zero—and that was before COVID-19 travel restrictions. Many Chinese scholars have stopped studying and are now avoiding China because of continued concerns about Chinese espionage. Many universities are facing losses in tuition and property, as well as losing tenants. The cottage market of professional coaches and language tutors has far fewer customers to help them integrate American culture. As Stanford professor and Nobel laureate Steven Chu put it, “We’re shooting ourselves not in the foot but in something close to the head.”Talented foreign students may choose to study elsewhere until they are granted a greencard with their degrees.

Don’t be surprised if many of them move over the border and work remotely instead. Canada seems to be the place where the American Dream is now. Canada’s points-based immigration policy is luring young people from around the world with the promise of a pathway to citizenship. The majority of the new jobs are permanent and not temp. Meanwhile, only ten percent of America’s immigration application forms are available online.

Europe offers more options than North America for the wealthy Asians, who make up the bulk of the global millennials. The U.K. capitalized on Trump’s odious image, admitting a record number of foreign students in 2020. Europe’s aging population has few children, and it needs foreign students to help fill their classrooms. Across Europe’s IT sector one finds Indian software engineers and data scientists with degrees from Manchester or Amsterdam, and they’re snapping up EU blue cards instead of American green cards.

The Biden Administration has its work cut out for it to attract the world’s best and brightest to America in anything like the numbers it used to. It has managed to let Trump’s H1-B visa restrictions expire, and plans to allow spouses of H1-B holders to work, a boost for would-be two-income households. The Build Back Better Act, which includes a major overhaul to green card processing and would affect almost one million foreign workers immediately, is holding up immigration reform. If those workers leave, there won’t be enough skilled Americans to take their place.

It is important to project future talent distribution scenarios from Gen-Y’s and Gen-Z’s perspectives. Many millions of youth are now geographically free. However, WhichYou are the people who make things happen. America’s national debt has exploded (100 percent of GDP and climbing), and young workers and taxpayers are needed to power a real recovery beyond today’s artificial stimulus. An aging country with a declining population and crumbling infrastructure isn’t fit to prevail over China, much less outlast its 1.4 billion people in the long run.

There are millions of jobs available despite record low unemployment. Even after stimulus cheques are spent and wages rise, people aren’t going to rush back into menial labor unless they have to. In order to complete the infrastructure projects across the nation, hundreds of billions will need more workers. For America to really rebuild better, it will require an army for migrants. To attract the next generation, demographic renewal will require vigorous competition. Collecting power is about collecting people.

It lasted for twenty-years. The war for talent should be America’s main mission for the next twenty.


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