The Adecco Group GTCI 2020

Overview

In its 7^th edition, the Global Talent Competitiveness Index (GTCI) is an annual benchmarking tool ranking countries and major cities on their ability to develop, attract and retain talent. Developed by INSEAD in partnership with the Adecco Group and Google, the report provides a tool for governments, cities, businesses and not-for-profit organisations to help design their talent strategies, overcome talent mismatches and be competitive in the global marketplace.

GTCI covers national and organisational parameters and generates insights to inspire action. This year’s index includes 70 variables and covers 132 countries and 155 cities, across all groups of income and levels of development. The GTCI is a composite index, relying on a robust, action-focused Input-Output model, for policymakers and business leaders to learn from and respond to.

2020 theme

The 2020 edition addresses the theme of Global Talent in the Age of Artificial Intelligence. The report aims to explore how the development of Artificial Intelligence (AI) is not only changing the nature of work but also forcing a re-evaluation of workplace practices, corporate structures and innovation ecosystems. As machines and algorithms continue to affect a multiplicity of tasks and responsibilities and almost every job gets reinvented, the right talent is required not only to carry out new responsibilities and ways to work, but also to capture value from this transformative technology. This topic stands at the heart of the debate in this era of the Fourth Industrial Revolution as AI has become a game-changer in every industry and sector. Current education and skills acquisition will be transformed as well, implying that formal and informal learning structures will evolve to meet the needs created by this very same AI-driven world.

Key findings

The gap between high income, talent rich nations and the rest of the world is widening

• Switzerland continues to top this year’s rankings, followed by US and Singapore. High income countries dominate the top 25 but low-middle income countries including Indonesia and Ghana are showing strength in their talent bases
• The top ‘talent champions’ are accelerating further away from the rest of the world, a divide that is only intensified by the AI and digital skills gap that has emerged between industries, sectors and nations
• AI policies and programmes should work to minimise negative outcomes and increase access to AI for those countries that are left behind

That said, AI also provides significant opportunities for emerging markets to ‘leapfrog’

• AI need not be a hindrance to our global workforce, but a means to upskill employees and boost the economies in emerging markets and beyond
• The longitudinal analyses from the index shows that developing countries such as China and Costa Rica harbour potential to be ‘talent champions’ in their regions, while Ghana and India possess potential to continue improving their capacity to enable, attract, retain and grow talent
• India did this in the late 1990s when it became a global offshore base for IT services. AI can provide similar opportunities for other countries to become ‘global delivery centres’ for AI applications

AI can also help provide solutions to help humanity achieve the UN’s Sustainable Development Goals

• Beyond the walls of the workplace, AI should not be perceived as a challenge but an agent for positive change – particularly regarding the SDGs focussed on Education (via creation of customisable online programmes) and Health (big data analysis to track and reduce diseases and epidemics)
• That said, AI is by no means a ‘quick fix’ to the world’s problems and it requires multiple stakeholder co-operation to develop an approach that works.
  • Firstly, we need to build the skills necessary to strike the optimum balance for a successful hybrid workforce
  • Secondly, we need to create conditions to maximise the social value and long-term sustainability of said approach

Cities have continued to prove that AI talent strategies are not reserved for nation states, with many competing to become the best performing AI hubs in the world

• New York tops the city rankings this year followed by London, Singapore, San Francisco and Boston
• Cities are acting as test beds for new AI based tools such as facial recognition, tele-surveillance and autonomous vehicles. The success of these vary across cities, but those that do well will emerge as AI hubs that have the talent to sustainably deploy global solutions

The age of AI is no longer in our future. It is here, now, and we need to re-/upskill the workforce on a global scale

• It would be naive to assume that AI and automation will only impact manual or administrative roles within our workforce. Robots and algorithms have travelled beyond the factory floor and are functioning at front of house, the back office and company headquarters
• At all levels of qualifications, workers will need training on adaptability, social intelligence, communication, problem solving and leadership. Lifelong learning is imperative to allow everyone the opportunity to develop these essential skills that will continue to be human-only activities that complement technology advancement
• Re-skilling is also needed to develop ‘fusion skills’ that enable humans and machines to effectively and efficiently interact in hybrid activities

Top five countries                                                          Top five cities

Key themes

“Winners and losers -Mind the Gap”

This Index shows a growing gap between countries that are talent champions and the laggards. But this also represents a huge opportunity for lagging countries, regions and cities to exponentially improve their performance. Future leadership in talent and AI doesn’t have to be a zero-sum game, but action is needed now.

WHY IS THERE A GAP AND WHY IS IT GETTING WIDER?

• Leaders in the index – in both talent and AI – are all high-income countries, except China
• They have the financial and political will and ability to invest across the board in technology, research and development, skills, learning and training
• They have an active, innovative and large AI-related private sector
• Businesses, rather than countries, are often the powerhouses of AI development and innovation
• They also recognize the particular opportunities and threats of AI in the world of work
• They are working through these challenges of AI, including how as it affects the world of work and society, in a systematic way. There are now 30 national AI strategies and the UN, OECD, G7 and G20 are promoting principles of responsible AI
• The USA and China are true world leaders in talent competitiveness and AI, with Europe playing catch-up in third place

HOW TO FIX THE GAP

• In some cases, the national approach to AI policy may focus more on the technical and economic aspects, at the expense of elements like workforce development and social cohesion
• Countries with ambitions to forge ahead in AI would be well-advised to give equal focus to engagement and the development of an accompanying AI-related talent strategy. In other words, how are they going to grow, attract and retain valuable talent to take advantage of the benefits of AI for the whole country
• There’s a plethora of studies and excellent data covering investment and funding in AI, but a scarcity of similar reliable data about the relationship between AI and talent – this is a need – and an opportunity

As a specific example of challenger countries and regions – this year’s GTCI report has a deep dive into some South American countries and a review of the region in terms of the interrelationship of talent and AI.

On the challenge side in Latin America, for example, the importance of being able to rapidly develop AI-related skills is evident when you learn that one study shows 8.8 million FTEs – jobs – in Mexico – are expected to be replaced by automation by 2030 and the number for Brazil is 15.7. As context, the figure for the US is 38 million and China 111 million

The South America section of the report also gives some indication on where challenger countries – anywhere in the world – could productively focus effort to improve their competitiveness, manage the disruption to the workforce of AI and reap its potential benefits.

Some focus areas include:

• The strength of entrepreneurial talent of a country – from last year’s CTCI – is a good proxy for their AI readiness – Mexico and Chile lead the region
• Have a policy and have the right policy: The manner in which Mexico developed its AI strategy is holistic and collaborative across the population – recognizing that buy-in is a key success factor
• Two critical talent-related aspects of a strong AI capability include:
  • Skills and education: Indicators include digital skills among the population, innovation capability by the private sector, and the number of registered AI start-ups, and
  • Technology skills: serve as a proxy for AI skills in the general population. This is important both as an indication of skills in the public sector as well as of the available pool of local talent
• There will be an extinction of jobs and professions, while new ones will appear or develop – the workforce today and of the future must be prepared
• In addition to the need for STEM skills within the population, skills like the ability to learn and adapt must be widely taught
• Again, in Mexico – it is well-positioned to attract talent and to become a centre for global AI capability and development, not least due to its proximity to the USA
• I’m also fascinated that Mexico, unlike many other countries, wants to deploy AI to solve challenging social problems in the country – including lack of financial inclusion, combating corruption, improving public health, and reducing crime

Overall – while acknowledging the challenges faced by the region, the report points to the potential of South American countries to cooperate on AI and talent. It sees merit in countries collaborating to create a global AI talent pool and attracting direct inward investment by companies wanting to tap that talent pool.  In order to have a chance to deliver this vision, Latin American countries must act now to invest in:

• Infrastructure
• Re-skilling and up-skilling at scale and
• Structuring the education curriculum around STEM subjects to create talent with transferrable skills as a talent pipeline to the AI capability of the future

“Investment in AI must be matched by investment in talent development, workforce skills and lifelong learning”

AI and talent competitiveness & development are two sides of the same coin. If AI is the ‘what’, people are the ‘how’.

While AI provides great hope for solving the most challenging problems of today in climate change, healthcare and social welfare, it also has to be matched by a talent development strategy that is part of, or in step with any national or multilateral AI strategy.

Aside from the technology, in order for AI to achieve its real potential, delivering benefits at a population scale, the following talent-related capability must be developed or reinforced:

EDUCATION, TRAINING AND SKILLS:

• Countries must emphasise the importance of STEM subjects for current school pupils. Knowledge and capability in STEM create the preconditions for working in AI and to be able to effectively manage projects or policies where AI is an element of the mix
• Fluid and flexible education and training supports lifelong learning and we must be aiming for life-long learning. Gone are the days when our lives were: “Being educated in school, then college, being trained for a job, working in that job for 40 years – followed by a retirement of gardening and daytime TV”
• Nowadays and in future we may expect to work longer and will be in and out of education throughout our working life. Education equips us for the challenges of the changing world of work and we should all have the opportunity to access education at any time in our lives
• The challenge here is for companies, governments, schools and colleges who will be expected to facilitate this life-long learning with the relevant curriculum, timetable and options for face-to-face and online teaching

As a subset of lifelong learning – vocational training also plays a vital role in equipping individuals, and the workforce as a whole, with the right capabilities.

• This takes the form of developing skills through traditional apprenticeships and higher vocational training
• In addition, it includes re-skilling and upskilling of existing workers to meet the challenges of AI. Specifically developing and nurturing:
  • Human-centred skills which are likely to remain human-only activities – like empathy, creativity, imagination, judgment and leadership
  • Fusion skills that enable people and AI machines to interact in hybrid activities

The willingness of workers to participate in lifelong learning, coupled with the capability of companies and governments to provide the best training for their people, will affect the employability of the individual, as well as the competitiveness of the country and businesses.

The effectiveness of a country’s education, up-skilling and re-skilling efforts will affect every aspect of the way we work – and for some – whether or not we are able to continue to work. It will also be a factor in whether AI companies are motivated to consider a country for inward investment or project execution.

NEXT STEPS

Some countries are ahead of the game – and are joining the dots between education and skills -while others have an opportunity to shape their future provision. One thing is certain – countries can do it now, or do it later, but they will certainly have to do it. None of them have to start with a blank sheet of paper – there are models and approaches to be found and adapted.  Managing the work transitions of millions of people in jobs that won’t exist within this decade will certainly concentrate minds and effort. My advice would be to put a lot of effort into education, training and skills now, as they are the pump-primer for future success in AI and overall competitive success.

“Smart Cities – taking the lead as innovation incubators and testbeds for all aspects of talent and AI development”

Why is the city so important and why have we focused on cities in the Index? Urbanization – is a dominant megatrend

• In 1950, 751 million people lived in cities, in 2018 the figure was 4.2 billion and estimates show that by 2050, some 6.7 billion people will live and work in cities.
• As a context, about half of the world’s population today live in urban areas. In 30 years’ time, nearly seven in ten people will live in cities.
• Some cities have the population and economic scale of entire countries, so what cities do matters – and cities can do a lot

We’re including more cities than ever before in the Index – 155 in all – because

• Much innovation and development of AI and matching talent investment happens at a city level
• New initiatives can be quickly tested and scaled
• Some City States – like high performing Singapore – are an example for other conurbations

I found it interesting that, while the specifics of our findings on city talent competitiveness and AI are very much of the 21^st century, they have strong parallels with the past.

Take Hamburg – and the development of the Hanseatic League hundreds of years ago:

• In those days there was more competition between cities that countries – as there is today
• Hamburg was for centuries at the centre of a network of global trading routes – our index calls that connectivity, which today includes broadband and the internet
• It had critical mass – in its later years from 1870 – 1900, the population increased from 200,000 to 1 million and attracted talent in the form of traders and craftsmen to maintain its leading economic and technical status – today this is true for the leading cities in the index
• It was wealthy and part of a defensive alliance. As such, it was relatively safe and professionally and socially cohesive. Today, we bundle these elements under the heading ‘quality of life’ – and it’s still key element of attracting, growing and retaining talent

OPPORTUNITIES FOR CITIES TO IMPROVE AND GAIN COMPETITIVE ADVANTAGE

But moving to today – what does the Index tell us about AI and talent in the city context?

The opportunity for cities and AI:

• Few, if any cities perform well across all of the Index metrics. The opportunity here is that they have clear areas for improvement to take themselves to the next level of attractiveness
• Cities can be more agile in developing specific AI and related talent competitiveness initiatives – with the important proviso that the country in which the city is located must also be at the top of its game on these metrics too
• Cities as talent hubs – a strong AI sector will attract talent – and the city’s use of AI in outreach activities to target and attract globally mobile talent – will give it a competitive advantage
• Cities need to be Smart in AI and at the same time Smart in policy. Developments in infrastructure, skills, learning, environment must not only be by and for the local and incoming talent, but also for the benefit of the overall population.

REAL LIFE EXAMPLES OF CITIES AND AI

• The report highlights some examples of what cities are doing to develop both AI and talent competitiveness and we have some case studies on two very different cities – including Bilbao and Berlin. We also reference Tianjin in China and I’d like to share some of that city’s metrics: Their population is nearly 16 million – nearly twice that of Switzerland – our top-ranking country in the overall Index
• Tiajin’s GDP is more than $275 billion – placing it on a par with Chile and twice that of Hungary
• It recently announced it is to invest $15 billion in AI, which is six time more than France plans to invest

Watch the cities and learn from the cities!