This article is part of a series that explores the innovative potential arising from the global movement of skilled workers. It examines the implications for CEOs and policymakers.
David Bowie had a rare gift: the capacity to sense the future and bring it into the cultural fabric of the present. Visionary business leaders have achieved similar feats for society—from Henry Ford anticipating mass mobility, to Yvon Chouinard at Patagonia pushing for sustainability and climate action years ahead of others, to Elon Musk spearheading not just an e-mobility revolution but also the dream of humanity as an interplanetary species.
In the first article of this “Innovation Without Borders” series, we showed that people crossing borders are not only generating trillions of dollars of innovation and growth benefits for destination and origin countries but also spreading ideas, knowledge, capital, and even human rights. Yet migration remains a hotly debated topic and a source of political gridlock in many countries. As a result, firms, societies, and individuals are not fully capturing its promise:
We argue that there is now a window of opportunity to build bridges into opportunity for skilled global talent that would ignite innovative growth. It’s not politicians but business leaders who hold the keys to make this happen. We lay out two reasons why forward-looking CEOs and aspiring founders should care, describe four strategies that they can pursue to drive firm-level advantage, and show what specific actions look like.
Close your eyes and fast-forward to 2050. In what world will our children and grandchildren live? With the benefit of hindsight, how might they look at the decisions we take today? Is there a chance they will call some of our actions morally questionable or even economically stupid?
We hope they will be gracious enough to say: “Your generation finally turned the corner on climate change, and you started addressing the persistent injustices of discrimination.” Yet we can’t help wondering if they’ll continue: “But there were still massive differences between people. A bright-eyed, aspiring student from Lagos or Lahore simply did not have the same opportunities as you. How could you live in such an unfair world?”
Your grandchildren might have a point. Of all the economic differences between two randomly chosen human beings, 66% are due to one factor only: where they were
In our conversations with executives and startup founders, we sense a nascent excitement for the bigger cause and a clear awareness of the business case of “innovation without borders.”
There are two basic reasons why now is the best time to act. First, talent is now truly universal. Just twenty years ago, global talent was relatively scarce. (See Exhibit 1.) The world had roughly 420 million skilled people and about 70 million recent college graduates (age group 25-29), but nearly 60% of them graduated from schools in the United States, Europe, China, or Japan. Fast-forward to 2020: the world now counts roughly 840 million skilled people and about 140 million recent grads (twice as many as 20 years
Second, it’s easier than ever for firms to work with global talent. The COVID-19 crisis led to a surge of startups that support firms in managing globally distributed teams. Meanwhile, counterintuitively, it’s never been easier for firms to hire and relocate qualified workers from abroad. We spoke to legal relocation experts, HR managers, and field practitioners across the world. They showed us that in 11 out of the 12 countries we studied, the legal and administrative hurdles to global movement are low or very manageable. Two notable exceptions: China and the United States (see Exhibit 2).
Germany emerged as the country most open to skilled foreign talent—ahead of even the well-established mobility destinations Australia and Canada. Even Japan, a country not traditionally known as a global talent hotspot, has opened the gates. In the past, firms often faced a complex visa and work regulation landscape that was hard and costly to navigate. Today, countries designated as “easy” or “medium” tend to have an ample supply of work visas, which are given out in a (mostly) predictable fashion and at low or manageable cost. And the process typically doesn’t add substantial waiting time compared with the hiring of a qualified local candidate. Meanwhile, on the labor demand side, BCG research shows that people’s desire to pass through these gates remains strong; about 50% of skilled talent say they would consider relocation if offered the chance.
Talent is now more globally spread, and political hurdles to global mobility are lower than ever. What then can leaders in business do to embrace this cause and gain strategic advantage while doing so? To answer this question, we spoke to corporate executives, founders of unicorn startups, and investors in industries ranging from technology and software to FMCG, logistics, travel and tourism, and media and entertainment. In these conversations, a picture of four complementary strategic approaches, or “plays,” took shape. (See Exhibit 3.)
Let’s now dive into each play and explore what leading firms are already doing.
Talent plays create value for companies under two conditions: if companies avoid the “revolving door” problem (attraction but low retention), and if they manage to scout global markets for overlooked talent.
Firms use the ecosystem play either to circumvent hard legal restrictions to the hiring of skilled talent from abroad or to attract skilled global talent to their region by making targeted investments in the broader ecosystem, often together with other players. It turns out there are often some very concrete opportunities for large firms, startups, and NGOs to work together de-bottleneck the talent migration journey and thus improve their own base of competition vis-à-vis global competitors located elsewhere.
The innovation play is a strategy for companies with culturally and cognitively diverse work forces to launch new products, services, and business models to the market. Based on BCG’s innovation research, firms that succeed in making diversity work—those that maximize the variety of ideas and then select the best for scale-up—are significantly more likely to outperform their peers.
Companies that follow a purpose play strategically differentiate from competitors by credibly embracing the cause of global equality of opportunity. Doing so takes foresight, conviction, and courage.
Such purpose-led companies are not rare in other causes, for example in the fight to combat climate change. Patagonia is a globally celebrated brand that spearheads corporate environmental activism, but it had the foresight back when climate change was just a niche topic.
Founded in 1973, Patagonia had sustainability sewn into its cultural fabric from the onset, and it formed dedicated climate change charity efforts early on. The company never stopped at changes that merely advanced its own strategic position. For example, it imposed a 1% planet tax on its annual revenue and rallied like-minded companies to do the same. With the proceeds, the companies fund a platform that connects grassroots movements, activists, and environmental protection experts. Patagonia became the single most credible brand in sustainable clothing.
The cause of global equality of opportunity is still a strategic white spot, which makes it a strategic opportunity up for grabs. As of today, we see only a few companies embracing this play:
When is a good time to credibly embrace such a purpose? The founders of firms like Patagonia, Chobani, and Airbnb embraced a wide societal mission for their firms from day one, and, not coincidentally, they communicated it loudly to differentiate themselves from competitors. Will these early differentiation advantages last forever? The jury is still out, but more than ever, purpose-first companies succeed in achieving category leadership and as a result often see substantial valuation premiums.
“Tomorrow belongs to those who can hear it coming,” as David Bowie famously put it when releasing his iconic hit “Heroes.” Could a world of global opportunity, facilitated by firm-led migration, be a “tomorrow” discovered by those who are among the first to see it coming? We lay out a pragmatic agenda that helps CEOs and aspiring founders identify their most suitable strategic play and then choose from a list of concrete actions—all with the objective of bringing forward the cause while securing firm-level strategic advantage.
We argue that the best time to get started is now. Younger voters, employees, and consumers increasingly expect CEOs to act on global mobility and opportunity. The majority of populations polled (not just in North America and Europe but also across the globe in China, Japan, Saudi Arabia, Brazil, and South Africa) demand corporate initiative on this very
What starts with better company performance could then trigger a broader change that leads to more widespread innovation, growth, and human happiness.