↑ Return to Talent

Background

The project distinguishes between four ways of attracting talent:

  • Retention of (under)graduates from local educational institutions (especially but not exclusively higher education) by active labour market and housing & amenities policies (amongst others)
  • Attraction of graduates from elsewhere by active labour market, housing & amenities policies and the facilitation of (long-distance) commuting, supported by place-marketing
  • As a specific form of the latter: encouraging re-migration of local citizens who moved out to study and work elsewhere.
  • Attraction of undergraduates by the establishment of graduate education institutions (like outposts from established university course)

Key concepts in the project are the (under)graduates that are educated in the region or migrate from other regions.  Or in other words who are the brains that flow.

The problem of Brain drain was first mentioned by the British Royal Society to indicate the problem of outflows of scientists and technologists from the British isles to the U.S. and Canada in the 1950’s and 1960’s (Cervantes, Guellec, 2002: 40). In this description brain drain is primarily an international process. In our Interreg project brain drain flow can also be seen as both an international and interregional, intranational process. The similarity between international and intranational processes is the people to whom brain drain is concerned. Brain drain concerns the skilled and talented people. This, in contrast with unskilled labour, which is usually seen as immobile (Shrylock jr., Nam, 1965: 299; McCulloch, Yellen, 1977: 80).

  • Brain drain we define as the loss of highly educated persons to other regions
  • Brain gain we define as the positive feedback effects that highly educated emigrants generate by return migration or other forms of contact that transfers money,  technology and knowledge back to the home regions.
  • Human capital can be defined as the resources at the disposal of individuals and social communities.

Brain drain and brain gain

The characteristics ‘skilled and talented’ are too broad to determine what the brain drain population. Voss, Hammer and Meier (2001: 588) define the population simply as ‘college graduates’. This definition has two problems:

  • firstly, it is questionable if each college or university graduate makes a contribution in a sense that he or she has particular skills or talents needed by the region he leaves and that he contributed to the economic and social welfare of the region;
  • secondly, people without college graduation can contribute substantively to economic and social welfare as well.

Iredale (2001: 8) considers the highly skilled as workers having a university degree or extensive/ equivalent experience in a given field. Unlike Voss, et. al., Iredale gives substantive attention to non-university skills. Analogous to this definition, N.E.I. (1995: 34) considers ‘the skilled and talented people’ as that part of the population that is either highly educated or so well talented that they can generate economic activities.

In our project we take the N.E.I.-definition as a starting point

  • The profession of the emigrants. E.g. by (H)ISCO-nomenclature.
  • The education of the emigrants. E.g. by ISCED-nomenclature.

Human capital

The concept human capital is frequently used in contemporary sociology and economics. It has numerous definitions. In economics the roots of the concept can be traced back to Adam Smith. In socio-economic sciences it was introduced in the sixties. Human capital was defined as the resources at the disposal of individuals and social communities. A relation was made with economic development. Baker emphasized the role of healthy and well-educated people who work actively and thus make decisions on human capital and economic development (Baker 1964). In the last decade Richard Florida popularized the human capital factor in economic development. According to Florida economic growth appears where well-educated people are present, as they are advocates of creative capital (Florida 2004).

The OECD (1998) defines human capital as the knowledge, abilities, competencies and other attributes embodied in individuals who are suitable for the economic activity required of them. This is a broad definition of human capital which does not include formal education received in the course of their learning but includes other skills learned by the individual during training courses (life-long learning; job training) and at work (learning by doing).

Human capital is a complex concept. Every individual has a certain amount of human capital. A state’s or a region’s human capital stock can thus be defined as the sum of the human capital of the individuals within that state or region.

This individual human capital can be increased through formal learning processes, but also through informal learning processes. For defining human capital, we make a distinction between formal human capital and informal human capital. Formal learning process, are processes caused by educational systems. Therefore, one can think of several indicators for formal human capital. Informal human capital, on the other hand are of course very ambiguous. Or, as Pissarides (2000) puts it: ‘each time someone develops the ability to do something new; he or she increases his or her human capital. It is obvious that it is impossible to study this informal aspect of human capital on an aggregate level.

On the other hand, there is of course no necessity to study informal human capital. After all, there is no reason to believe that the genesis of informal human capital differs from region to region. It is much more obvious that informal human capital goes hand in hand with formal human capital. As a matter of fact, one has every reason to assume that informal human capital is directly derived from formal human capital.

For this reason, the qualitative aspect of human capital is usually defined by using formal schooling as a parameter. However, despite this consensus, no clear agreement has been found on common human capital indicators.

Human capital in the capitals approach is often defined in terms of a stock of human capital within a certain (working) population. Average years of schooling has long been thought of as the relevant indicator. Dimov and Shepherd (2005: 8) give a clear enumeration of the benefits of this indicator over the years. Other indicators that have been used are for example: literacy rates; school enrollment rates (e.g. Barro, 1991); and public expenditures on education (Blankenau and Simpson, 2003). Of course, all indicators have certain pros and cons.

For instance in the attempts to measure progress in the Lisbon strategy in making Europe and specific countries more competitive we find structural indicators like:

  • lifelong learning (share of the population 25-64 years in education or training);
  • public expenditure on education’ (% of GDP; ISCED definition);
  • early school leavers not in further education or training’ (% of population 18-24 years with only secondary education and not in education or training);

 For comparing Western European regions with comparable regions within the same country, most of the human capital indicators mentioned above are not sufficient.

  • Average years of schooling for example, could be a good indicator for comparing different countries. Within these countries however, it cannot serve as an indicator. Populations are simply too small, too compact, and too compact to notice substantial differences amongst different regions within countries.
  • Literacy rates is unusable as an indicator for the same reasons as the average years of schooling is. At most, figures will differ marginally among regions within the countries studied. Besides, it will not be fruitful to look for a correlation between the benefits of human capital (both market and non-market) on the one hand and literacy rates in Western European states on the other hand.
  • Actually, the same goes for school enrollment rates as an indicator for human capital. This indicator is not suited for a Western European context. Differences are too marginal, therefore correlation will not be noticed.
  • Public expenditures on education also cannot be used in the Western European context. Western European educational systems are for too complex to be narrowed down to one simple dimension, such as expenditures on education.

In this project we therefore define human capital through the percentage of people that have received higher education. Higher education refers to all universities, colleges of technology, and other institutes of post-secondary education, whatever their source of finance or legal status. It also includes all research institutes, experimental stations and clinics operating under the direct control or administered by or associated with higher education establishments (OECD, 2002: 161).

Here we take as an indicator for the stock of human capital the percentage of people in the workforce with a higher or so-called tertiary education. The concept of higher education can be defined through the International Standard Classification of Education, ISCED-97 (OECD, 1999). The ISCED-97 classification can help in finding similarities between higher education. ISCED-97 roughly contains eight different levels of education. The latter three (i.e. ISCED 5A; ISCED 5B; ISCED 6)[1] refer to higher education.

So, by taking a look at the three respective national equivalents of the three latter ISCED-97 categories, it is possible to compare data on higher education among regions.

Societal trends that influence brain flow

Brain flow is not a static situation but a phenomenon influenced by societal trends. Some of these trends intensify brain drain and some intensify the brain flow in the opposite direction; brain gain.

Factors that intensify brain drain

Although the phenomenon of brain drain became well known in peripheral areas during the 1980’s, the significance of brain-drain increased recently due to a number of factors:

  • As a side effect of globalisation, there is a concentration of international enterprises in metropolitan areas leading to a migration of highly-qualified employers into these bigger cities.
  • Demographic change will cause a shortage of higher educated and a battle between regions for the scarce talents. The core regions are the likely winners of this battle.
  • Efforts devised in the sixties and the seventies to stop brain drain failed in the last decade, notably the foundation of universities and schools to stimulate regional economy. The expected effect of university students remaining in the region after graduation never materialized. This knowledge infrastructure failed to lead to an expansion of the market for high-qualified employers. On the contrary: peripheral regions invested considerable funds in education but graduates left the regions taking the profit of the investment to metropolitan areas. The important underlying factors here are the attraction of metropolitan regions for young, highly educated people; particularly the so called weak settlement factors but also the availability of suitable jobs.
  • A fourth factor are the new European labour market, where cross-border labour and housing mobility is becoming increasingly important. This cross border mobility could have important consequences for brain drain if there are differences in the average level of education in the cross border regions.

Factors that influence brain gain

Apart from a growing importance of brain drain in European regions there is also evidence of the significance of brain gain processes in the economic development of peripheral regions. Two processes are of particular interest:

  • In the first instance, people from these peripheral regions go to the metropolitan areas, obtain high positions in the economy and use their possibilities to support their home regions. Such processes (people in the Diaspora helping their friends in peripheral regions) can be observed in the projectregions..
  • In the second case, older highly educated people with good jobs in metropolitan areas go back to peripheral regions (sometimes because of the better environment). These people may have a very positive effect on the local economy as well as on the social network.

 

 



[1] Respectively Bachelor-; Master-; and PhD-level

More references can be found in the Literature page. Links to relevant article will be updated soon.

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