Continental Western Europe, and the European Union in particular, have often been criticised as stagnant bureaucracies that impede creativity and growth. The US and UK economies have been praised as the places to go for people who wanted to see their careers thrive.
It is true that the Anglo-Saxon model, with its focus on free markets, works best for entrepreneurial types – witness the absolute dominance of Silicon Valley in the world of tech, or the City of London in banking.
And yet, when it comes to developing, attracting and retaining talent, it looks like the EU — or at least Western Europe and countries associated with the EU — are still the best places.
The latest competitiveness rankings for talent for 2017, published recently by the Switzerland-based Institute for Management Development, are dominated by Western Europe. The rankings look at three criteria: investment and development of talent (for home-grown talent), the appeal factor (to attract talent from elsewhere) and readiness (the existing skills of the local workforce).
All of the top 10 countries are Western European. They are: Switzerland, Denmark, Belgium, Austria, Finland, the Netherlands, Norway, Germany, Sweden and Luxembourg.
The Anglosphere is well represented in the next 10 countries: Canada, Hong Kong, Singapore, Ireland, New Zealand, the US, Cyprus, Iceland, Australia and Israel. The UK ranks 21st, down one place this year compared with last year.
Why is Western Europe ranking so high? The strategies that these countries employ see them taking the most advantage of the three criteria. Investing in education is being done at all levels, with Nordic European countries (Denmark, Finland, Norway and Sweden) more likely to shine in this particular area.
Countries like Germany, the Netherlands, Belgium and Luxembourg are particularly competitive in the appeal factor, as they offer high living standards and relatively competitive earnings to international talent.
When it comes to readiness, the existing skills in the workforce are quite high, not to mention that speaking more than one language is almost a given in these countries.
One area that stands out negatively is Eastern Europe, with the poorest two EU members Romania and Bulgaria particularly hit. Eastern European countries invest quite heavily in developing talent. Free education from primary school to university (including university) was established during the communists and is still available today in many of these places.
However, retaining talent is a problem, because of low living standards and pervasive corruption, which makes living conditions much worse in Eastern Europe than in Western Europe. Therefore, people who are educated for free in Eastern Europe often migrate West, creating a real brain drain problem for poorer countries. The talent competitiveness rankings may just have highlighted the EU’s next challenge.