3.1. THOUGHTS ON ENHANCING COMPETITIVENESS THROUGH A JUDICIOUS
USE OF THE IMMIGRATION SYSTEM: A (PRIMARILY) U.S. PERSPECTIVE
Demetrios G. Papademetriou1
INTRODUCTION
At the dawn of the twenty-first century, most advanced industrial societies are rethinking
the way they conduct themselves in a variety of contexts and policy domains. Among the issues
that have required much additional (and “new”) thinking have been the very nature of
competitiveness in a world where barriers of all types are falling at the same time that the hue and
cry from many quarters about maintaining (and even enhancing) many of a state’s traditional
"social compact" roles is at times deafening. Few issues have provided more opportunities for an
argument than international migration.
This short essay is written primarily from a U.S. perspective. The analytical framework,
the examples, the criticisms, and the “recommendations” are very much a product of analytical,
policy, and political debates that are firmly rooted in the US context. Yet, whenever possible, I
have tried to stretch the analysis and “homogenize” the language in ways that it also applies, to
differing degrees, to several other advanced industrial societies, such as Canada and several of the
member states of the European Union (EU). (In some instances, such as when I discuss how “we”
emerged out of WWII, or the role of the corporation in the 1950s and 1960s, the text is particularly
U.S.-centric.) I am aware that this violates one of the cardinal rules of comparative inquiry. Yet, I
thought that for the purposes of this discussion, putting this rule temporarily aside—with all its
implications for strict accuracy—might actually enrich, rather than sidetrack, the discourse.
The essay goes to the heart of the assignment, at least as I understand it. Namely, it looks
at where the thinking about "high end" immigration stands among advanced industrial societies
beyond just those built through immigration and at some of the key variables responsible for the
increasing interest in high "quality" immigrants. Specifically, it looks at how skilled and educated
immigrants fit into and are being relied upon increasingly to enhance the competitiveness of
receiving societies (typically, in ways whereby the immigrants themselves are also obtaining some
of the greatest returns on their investments in their own human capital). The essay's basic premise
is that in a world that is becoming so interdependent that relatively small differences in
competitiveness can translate into large gains in market share, each society's economic (and social)
logic and rules are undergoing as fundamental a reexamination as any undertaken in the last 30
years. Reviewing one's attitudes and policies toward immigration—initially toward skilled
immigration but gradually toward all forms of it—is an increasingly essential part of that reevaluation and has begun in earnest in several developed states.
1
Senior Associate and Co-Director, International Migration Policy Program, Carnegie Endowment for International
Peace
* The economic analysis is based loosely on the author's earlier work, Balancing Interests: Rethinking U.S.
Selection of Skilled Immigrants (principal author, with Stephen Yale-Loehr, 1996).
3.1.1
I have organized the essay as follows. In the first two parts, I examine briefly the evolution
of large corporations into global firms and the forms of economic activities advanced industrial
societies2 are likely to attempt to retain as their “own” in the next two or so decades. I also discuss,
if briefly, what such societies will need to do in order to retain them. In the last section, I argue
that thoughtful immigration policies will be among the "competitiveness" avenues these societies
will explore with increasing vigor and suggest one way of identifying and selecting the “best”
immigrants from two completely interrelated perspectives: the receiver’s long-term
competitiveness and the immigrant’s long-term economic success.
By necessity, the nature of the assignment makes the analysis one-sided and incomplete.
For instance, it virtually ignores a number of important, if perhaps only emerging (or, in some
ways, re-emerging?), changes in the international migration system that will likely complicate the
policy and political calculus that underlies some receiving society decisions about immigration
today. For instance, it avoids such facts as that the immigration system now embraces virtually all
states and that most states now both send and receive immigrants. These developments make clear
that the neat analytical lines that have traditionally distinguished sending from receiving countries
have now become blurred.
Such blurring probably complicates both the policy and political calculations of all
principals in the immigration system. For instance, most traditional sending countries now have to
contend with and manage increasing pressure from, and popular reaction to, illegal immigration as
they are being targeted as transit or destination countries by would-be immigrants from less welloff states. (This rather new set of concerns is in addition to ongoing concerns about the treatment
of their own nationals abroad.) And the traditional receiving countries of the industrial North (see
footnote 1), must manage not only the contentiousness of large-scale immigration (which is a
political constant) but also such "new" immigration-centered political issues as dual nationality
(the resolution of which has potentially severe implications because of reciprocity concerns) or the
immigration implications of trade liberalization or skewed demographics (see discussion below).
Finally, the migrants themselves—depending on one's perspective, either the pawns or the
protagonists of the process—confront a maddening array of challenges that makes most
immigration routes administrative nightmares at best and expensive (and dangerous) gambles at
worst.
In another example, increasing numbers (and categories) of immigrants seem to be
constantly on the move. Most notable among these categories for this essay are talented and welleducated immigrants. An emerging "competition" for such immigrants has the potential to
empower them more than ever before and, if handled properly, it might even re-balance somewhat
the power equation between sending and receiving societies by forcing a conversation between the
two about what might constitute appropriate conduct in gaining access to and in the treatment of
such human capital-rich individuals. (Other categories of would-be immigrants, such as asylum
seekers and clandestine immigrants, are in a different sort of orbit. These latter groups are likely to
2
In this essay, I use the terms "receiving societies," "advanced industrial societies," "industrial" or "advanced"
democracies, "West" and "industrial" or "advanced" North, interchangeably to denote the more developed societies
toward which most migrants gravitate.
3.1.2
continue to confront an increasingly united front of targeted countries sparing little effort to prevent
them from gaining entry.)
A third example comes from the cold rationality of demographic analysis. Aging and
below-replacement fertility rates are forcing most advanced democracies to begin to understand
that they will have to come to terms with the fact that they will likely need to admit much larger
numbers of migrants in a variety of admission categories in the next decade or two than they took
in the last 30 or 40 years (see Papadeemtriou, 2000). If this comes to pass, and demographic
imperatives make as open-and-shut a case for greater immigration as an increasing number of
analysts predict, immigrants along all levels of talent and educational preparation, as well as their
countries of origin, may indeed gain a stronger hand in discussions for more appropriate (that is,
"better") labor market and associated social rights. This could bring about unprecedented power
shifts in the immigration system and could force a fundamental re-examination of what, over the
course of the last three decades, has become orthodox—and thus completely unexamined—
thinking on this issue.
IMMIGRATION UNDER ATTACK
In the 1990s, the very institution of immigration came under strong and sustained attack in
most of the advanced industrial world. In addition to strong concerns about illegal immigration3,
the attack, at least in the United States, initially focused on immigrants' (presumably “unfair”)
competition with and displacement of “domestic” workers, that is, workers who for a variety of
reasons have legal access to and priority in a labor market. Critics argued that the number of
unskilled and semi-skilled jobs, while often rising, had not kept pace with the growing ranks of
low-skilled workers who were already in the North—especially in the inner cities, where
minorities, immigrants, and other disadvantaged populations are concentrated. They questioned
the wisdom of admitting low-skilled immigrants, presumably (ostensibly ?) out of concern about
crowding further low-wage sectors. Some also questioned whether it was in a country's long-term
interest to "subsidize" through immigration and other policy instruments (such as lax enforcement
of labor and tax laws) the maintenance and expansion of low-wage, low-value-added activities,
such as garment-making, which cannot compete in the long run with imported items produced
much more cheaply abroad than the same goods can be produced domestically—and with far fewer
arguments about the social costs associated will such activities.
The overall argument was much more complex than the standard displacement-byimmigrants argument—a perspective whose resonance intensifies exponentially during bad
economic times. It was also enmeshed in the ruthless economic restructuring, consolidation, and
downsizing that affected even such heretofore relatively "recession proof" sectors as financial
services, high technology, and defense. The resulting layoffs had created (and in some instances
continue to create) a pronounced sense of anxiety and vulnerability among social and economic
classes that had never had to worry much about economic security. Nowhere were these forces felt
more acutely than in California, which, at least (although not only) for the United States, has been
3
I am including here Europeans' concerns about the high number of asylum requests, most of which are thought to
be fraudulent.
3.1.3
the birthplace of the latest (as well as of most earlier) anti-immigration movements and continues
to be a fount of anti-immigrant agitation.4
The next mutation of the anti-immigration debate focused on immigrant access to social
programs not specifically intended for them. Lurking in the background were a host of other social
and cultural integration issues5—including language and education, even ethnicity and race—
which are growing in intensity even as concerted attempts are made to marginalize politically those
who raise these issues.
Furthermore, the more the line between antagonism toward illegal or clandestine
immigration blurred with general dissatisfaction with various (or all) aspects of legal immigration,
the less manageable both issues became and the less likely it was that rhetoric and actions on legal
immigration would meet even a modest “thoughtfulness” test. This blurring became a deus ex
machina for those who wanted to minimize immigration intakes (e.g., Europe's rhetorical dance
with "zero immigration") or make deep cuts in legal immigration "unstoppable" by attaching them
to discussions about illegal immigration controls—an effort centered in the United States that,
although unsuccessful, nonetheless attracted significant political support.6
Finally, underlying and energizing many of these concerns was the perception that several
of the immigration system's processes can easily be circumvented by non-qualifying individuals
and subverted by special interests. The system’s unusual number of internal contradictions seemed
to be exploited as much by those who were trying to take advantage of the system as by those who
sought to destroy it. Two of the system's components—the employment-based and refugee/asylum
ones—were singled out for the most criticism in this regard, but several aspects of the temporary,
or what in the United States is called the "non-immigrant," formula also came under attack.
Furthermore, and more significantly for this essay, policy analysts and others came to the
conclusion that certain components of the immigration system may no longer serve broader
receiving society interests as well as they should, or, for that matter, the interests of many of those
who participate in it, including immigrants and their sponsors.
By 1990, California’s nearly twenty-year long economic expansion and prosperity gave way to large-scale job
losses throughout the economy, severe budgetary shortfalls, cuts in social programs, and, for a period of time in the
early 1990s, a flight of human and physical capital—as well as to a widespread state of mind that can only be
described as fearful and pessimistic.
5
The integration process is the "ground zero" of all immigration policy and the ultimate test of success or failure in any
immigration system. No immigration regime can be successful in the long run unless it solves the puzzles of integrating
newcomers, of building community out of diversity, and of creating a legal/institutional and sociopolitical environment
in which the second generation can achieve success. However, this problem cannot be solved in the absence of good
inter-group relations in general and inter-minority relations in particular. The broader challenge for immigrantreceiving societies is thus clear: Unless they can succeed in combating apathy, despair, and inter-group antagonism in
their inner cities, they cannot be successful societies in the next century. And considering the U.S. record of the 1990s,
the U.S. cannot succeed in that quest unless it begins to reinvest in the social infrastructure of its cities (particularly in
the education and training areas), to value more the efforts of the working poor, to strengthen the social safety net even
further, and to denounce those who incite taxpayers to revolt (and then use the resulting anger as an excuse for cutting
programs further).
6
That effort, however, brought fruit in other places, such as Australia.
4
3.1.4
HOW ADVANCED ECONOMIES AND IMMIGRATION NEEDS HAVE CHANGED
In order to understand the place of economic-stream immigration in advanced economies,
we must first understand the radical changes that, over the past two decades, have turned the world
economy into the extremely dynamic and completely interdependent global marketplace of today.
Specifically, we must understand explicitly (a) the global economy and its requirements,
particularly what it values most as it moves toward a state of full integration; (b) how most
advanced industrial economies are organized; (c) how those economies' firms and their
employees fit into the international marketplace; and (d) the worker characteristics that are most
useful to those firms7 (and, by extension, to “each” advanced economy) in safeguarding and
enhancing their position in that marketplace.
WESTERN ECONOMIES IN THE 1950S AND 1960S
In the 1950s and early 1960s, most industrial democracies were completing the
conversion to peacetime economies, having redirected manufacturing industries toward the
production of consumer goods. Manufacturing and agriculture—and large capital investments
in physical infrastructure—created enormous employment opportunities in what were essentially
domestically-focused economies.8
At about the same time, international markets began to become more important for the
industries of the West. An influx of U.S. capital into the war-torn economies in Europe and
elsewhere had already created opportunities for U.S. firms to build significant product
beachheads overseas and broader trade relationships. Combined with startling advances in
productivity,9 these factors had resulted in a booming U.S. economy that led to a near doubling
of U.S. per capita income between the end of World War II and the early 1970s.
At the center of this postwar economic explosion, managing its growth and guaranteeing
its stability, was the large corporation, which soon became the core of the economic life for most
industrial societies.10 Its role extended far beyond simply organizing capital and labor into the
production of goods and services. By tying continued growth to a large and growing internal
market, stable jobs and career paths, and stable labor relations, the corporation became the
nucleus in a cycle of production and consumption that transformed both the West’s economies
and its attendant social order.
Human capital is a large and increasing component of a state’s economic success in the world economy. Hence
the importance of designing skills’-based immigrant selection formulas which allow firms to gain access to key
immigrant personnel.
8
Manufacturing and agriculture received most of the attention and produced the overwhelming majority of the
measurable gross domestic product (GDP). In terms of total U.S. employment, however, the goods-producing
sector (manufacturing, farming, mining, and construction) has been employing a smaller share of all workers than it
is often assumed. Since 1940, fewer than half of all U.S. workers were employed in the production of goods.
9
Two key reasons for such productivity gains were continuous developments in the science of management and
the technology of high volume mass production--both essentially pioneered by U.S. industry.
10
The discussion about the role of the corporation and the bargain between management and labor is primarily of
heuristic value. It abstracts and generalizes from a set of relationships that apply primarily to that period's large
U.S. oligopolies and regulated monopolies, such as utilities. The reality was much more complex than this model
suggests. For instance, this discussion ignores the role of women workers. Moreover, most smaller and less stable
companies (where most women worked) did not offer the opportunities this model suggests.
7
3.1.5
Corporations could play this central role largely because they were able to craft and
maintain a "bargain" between labor and management that guaranteed continued growth by
fostering agreement on what Robert Reich has called the "division of the spoils." In this
bargain, and in the US at least, workers essentially "relinquished" the option of seeking to exert
influence over broad institutional policy issues11 in exchange for job security (virtually de facto
lifetime employment), seniority-based advancement, adequate compensation to support a family,
and access to generous benefits—i.e., the key ingredients for a middle-class existence. In return,
the corporation expected12 production workers and middle managers to learn how to work
within large and vertically integrated bureaucratic organizations, be reliable, work hard, and
follow orders—and rarely sought their input on product development or process innovation.
All of the corporation's constituent elements—stockholders, executives, managers, and
production workers—shared in the growing profits generated by this system. They in turn spent
their rising income on goods made by other large domestic corporations with similar structures,
thus further supporting the lifestyles of their neighbors and creating more jobs for their children.
They also saved enough of their income to underwrite investments in technological innovations
that boosted productivity and further enhanced broader economic growth.13
Typically, and especially in the United States, new technologies and products—the key to
an industry's success—were developed over long periods of time almost exclusively by research
and development shops within the corporation itself or with allies in academia, not by eliciting
worker input. To be sure, training mattered; and some societies invested heavily in the technical
preparation of the workers in the form of formal apprenticeship systems and the like. Furthermore,
technological progress required workers to learn new skills all the time. However, many of these
skills could be learned on the job or in short periods of employer-sponsored training, and they were
generally adequate for workers to share in the gains of the country's growth without expensive
investments in their own continuing education or training. In fact, even the most advanced
industrial equipment in the 1950s and 1960s was operable by someone with a twelfth-grade
reading level and a modest amount of on-the-job training.
Clearly, the availability of capital and natural resources, and the economies of scale
associated with mass production, were among the most crucial elements of economic success. But
there was still another factor: a supportive public sector and, more broadly, public institutions.
The public sector's role was essential in several respects: (a) in supporting and reinforcing each
country’s labor/management bargain; (b) in making the results of defense-related research and
development available to firms, thus expanding the knowledge-intensity of their products (this is
primarily relevant for the US case); and (c) in maintaining a system of public education that
11
It is worth noting that this path differs sharply from the one followed by worker organizations in most
European countries, some of whom chose to emphasize a policy of "co-determination" on institutional policy
issues while others opted for a policy of confrontation. In neither instance did European workers surrender any of
the "benefits" that this bargain bestowed on American workers.
12
The reification is typical of writings about the period, with “the corporation” often assuming certain concrete,
even anthropomorphic, characteristics. Some authors have in fact gone so far as to reduce the life of the nation to
that of the corporation. Reich (1991:43), for instance, writes that “[b]y the 1950s, the well-being of individual
citizens, the prosperity of the nation, and the success of the nation’s corporations seemed inextricably connected.”
13
In most instances, the advance of technology itself was adequate to raise productivity enough to further drive the
engine of growth.
3.1.6
taught good work habits, the importance of following rules, and the basic reasoning skills
(reading, writing, and arithmetic) necessary for modern factory jobs. It also promoted the
selection of the nation's brightest youth for post-secondary education, and made public funds
available not only to universities but also to students, thus ensuring a steady supply of
researchers, managers, and technicians. (Many European countries placed greater emphasis on
formal skills-training than on the widest possible access to higher education.)
Immigration played a significant role in the spectacular postwar economic miracles both
of Europe and of the United States. Although such “immigration” took many different forms (in
Europe, guestworker programs were the rule and permanent immigration the exception, while
the US played in both fields), all such forms exhibited a common thrust: enhancing economic
growth while preserving (or at least not undermining measurably) the bargain between labor and
management on which postwar prosperity—and social stability—rested.
As a result, the admission of economic-stream immigrants was pegged primarily to
filling jobs for which no domestic workers were available, while domestic workers were
presumed to be "protected" from declines in their wages and working conditions through union
contracts (where available) and the provisions of each country’s labor market test.
WESTERN ECONOMIES SINCE THE EARLY 1970s
By the late 1960s, the edifice of the postwar economic order—and the U.S. economy's
dominant place in it—had begun to crumble. There were many reasons for this breakdown,
many of them resulting from U.S. actions.
Although the lack of serious international competition noted earlier had contributed to
U.S. economic success, this very advantage gradually turned into a disadvantage. Lack of
significant competition had lulled U.S. industry into focusing primarily, if not exclusively, on
domestic production and had made it inattentive to the importance of protecting and expanding
its market share abroad, looking for an extra edge, or, most consequentially, investing
systematically in new technologies or in the skills and cognitive capacities of its workforce.
Furthermore, many U.S. firms and entire industries had failed to adapt their
organizational cultures quickly or fully enough to shorter product development cycles, more
efficient and quality-conscious manufacturing, and more targeted and aggressive marketing.
They had also failed to emphasize and reward flexibility, process innovation, ideas, skills, and
knowledge to the degree they should have—shortcomings that, by the late 1980s, seemed to
have spread to many continental European industries.
A second set of reasons for this breakdown was external and gradually affected many
sectors of the economies of the North. It included the revival of other postwar economies
(particularly in East Asia), the superior quality and price competitiveness of many foreign, and
particularly Japanese, products (often aided by government subsidies and protectionist policies),
and the increasing marketing savvy and aggressiveness of many foreign firms. Systematically
3.1.7
falling trade barriers, most of them coming down as a result of U.S. initiatives,14 accelerated
many of these processes. The combination of such acts of omission and commission—and, in
no small part, the earlier policy inattentiveness and miscalculations of our public sectors—has
made nearly unfettered competition a defining characteristic of the new world economy.
Trade liberalization and the reality of full economic interdependence are, of course,
inescapable facts, and international sales account for large and growing shares of corporate
revenue for tens of thousands of firms. In fact, French, or German, or US–“owned” firms are
now competing with foreign-owned firms not only abroad but also in their own countries. In the
most competitive sectors, as a result, it is as difficult—and in many respects much less useful—
to distinguish an "American" from a "foreign" firm as it is to separate "domestic" from "foreign"
markets for one's products.
This "de-nationalization" of economic activity (Reich, 1991) has effected significant
changes in Western economic institutions and the social organization that undergirds them. The
bargain between labor and management is faring no better than so many other products of the
immediate post-WWII era do, as access to cheaper labor overseas has eroded the bargaining
power of workers and their organizations.15 The "American” or “German” corporation has
become less and less so as firms move operations to other countries and foreign capital pours
into Northern countries.16 Relentless foreign competition forces corporations to be more costconscious than ever before and accelerates the pace of product and process innovation, increases
the speed of technological progress, and intensifies interest in flexible staffing.
More important for this essay, globalization has placed a premium on a better educated
and trained workforce. A firm’s productivity and competitiveness depend increasingly on its
products’ knowledge content (as distinct from its content of capital and other physical
resources), on the innovativeness of its processes, on "first-to-market" corporate strategies, and
14
It is not always fully appreciated that one reason for the single-mindedness with which successive U.S.
governments have pursued trade liberalization is the need to regain through "hard-nosed" negotiations ground lost
in earlier days, when the United States granted access to its market without securing fully reciprocal access for U.S.
companies and products.
15
The effect of trade accords on domestic workers is extremely complicated and controversial. On the one hand,
trade accords force open foreign markets and separate acceptable from unacceptable behavior in international
economic conduct. A panoply of rules regulates such conduct, while regimes of often severe sanctions are
intended to deter unfair trading practices. In this form, trade accords clearly benefit the West’s workers. On the
other hand, by providing more open access to the West's markets, trade accords put extreme pressure on those
industries and firms that are either marginal or otherwise non-competitive—but that nonetheless employ substantial
numbers of workers. While good for consumers (who benefit from the ensuing competition), such situations point
up the trade-offs between competitiveness and efficiency, on the one side, and the social implications of lower
wages, higher inequality, and unemployment, on the other. (The precise relationship between trade and inequality
is ambiguous. Clearly, trade liberalization does contribute to inequality by placing a higher value on products and
services that have higher, rather than lower, knowledge content. Hence, higher-skilled workers benefit while
lower-skilled ones often lose.) It is in this latter form that trade accords can contribute to job dislocation (but not
necessarily to net job losses in the aggregate) and may adversely affect social coherence—at least in the short to
medium term.
16
Between 1980 and 1992, U.S. overseas investments more than doubled, from $215 billion to $487 billion. At
the same time, however, foreign investment in the United States more than quintupled, from $83 billion to $420
billion (see U.S. Bureau of the Census 1994:808, 811).
3.1.8
on the ability to develop and exploit global connections by what Moss Kanter (1995b:153) calls
"managing the intersections at the crossroads of cultures." The constantly shifting need for
specific (rather than generic) expertise means that firms can obtain the needed talent more
easily, if not necessarily more cheaply, from outside—in effect adopting a "just-in-time"
approach to the composition of the workforce. Flexible staffing, as some call this, has in turn
lessened interest in investing in the training of one's workers, particularly when worker mobility
encourages "predatory" staffing strategies.
The resulting policy dilemma has been extraordinary and is aggravated further by radical
changes in the capacity of public institutions to safeguard some level of social coherence while
promoting broader economic growth. More and more governments now realize that their role as
legitimizers and overseers of the labor/management bargain may have lost much of its
relevance—primarily because neither of the parties have themselves to the bargain exist any
longer in their previous form, while their own actions in many other policy domains have
undermined the bargain.
A failure to fully comprehend how radically our nations' basic economic and related
social and labor market institutions have changed in the past two decades may well be at the
heart of our failure to diagnose and treat more effectively the implications of the broader
economic changes. By continuing to look at the same few indicators (e.g., unemployment or
industrial orders and output) as measures of an economy's performance, one may miss a crucial
insight: In this age of economic interdependence, what an economy produces, or even how it
produces it (in technical terms), may be less important than the structure of and
interrelationships among the institutions that organize people toward a common economic
purpose. Thus, we must shift our attention to how the organization of production in a
knowledge-intensive economy melds human resources and production processes into production
"systems" that stress high-performance, high-quality, and high-productivity outcomes. Such
outcomes thrive in large part on decision structures that are participatory and reward continuing
education and training. These attributes are increasingly the backbone of competitiveness. They
are also at the heart of good jobs at good wages and, by extension, successful economies and
societies.
THE WORKERS ADVANCED ECONOMIES NEED NOW AND MUST HAVE IN THE
TWENTY-FIRST CENTURY
Because globalization makes some of its most difficult demands on human institutions,
its effects have been felt most intensely in the labor force. The twin realities of intense
international competition and the lure of well-prepared and "disciplined," yet inexpensive, labor
overseas—when taken together with such factors as the attraction of becoming established early
in emerging markets (as Japan is doing so effectively throughout East and Southeast Asia—see
Papademetriou and Hamilton, 2000), the political stability in many important developing
countries, and the reductions in transportation costs—have removed much of the remaining
incentive for management to remain committed to the labor-management bargain. The
3.1.9
consequences, particularly though not exclusively for some low-skilled domestic workers have
been nothing less than devastating.17
This realization has led to increasingly earnest discussions across the advanced industrial
world about improving economic opportunities for workers by improving their levels of
education and vocational skills. Filling good jobs and enticing businesses to invest in the
creation of more good jobs requires an adequately prepared workforce or a nation's economic
and social progress will be undermined. In fact, the more other things become equal,18 the
greater the weight of such intangibles as a business-friendly environment and, more
appropriately for our discussion, a "world-class" workforce becomes.
Rosabeth Moss Kanter (1995a, b) provides a much fuller picture along these lines in her
discussion of the criteria for success in the global economy. She focuses on the three intangible
assets she believes successful firms look for in making their locational decisions: access to
"concepts," "competence," and "connections." Three types of workers correspond to these
assets. "Thinkers" specialize in concepts, the "leading-edge ideas, designs, or formulations for
products or services that create value for customers;" through their technological creativity, they
are the key to successful knowledge-based industries and products.19 The strength of "makers,"
Moss Kanter's second class of workers, is competence, the ability to "translate ideas into
applications" for customers and execute them to the "highest standards." (A local economy that
excels in makers meets an indispensable criterion for world-class production; when matched
with an appropriate infrastructure and a business-friendly environment, it can become extremely
attractive for the location of competitive firms.) Moss Kanter's final criterion for success is a
class of "traders." Traders, she argues, "sit at the crossroads of cultures, managing the
intersections," making deals and leveraging "core capabilities," creating more value for
customers, or opening doors, widening horizons, and moving goods and services across borders
(1995b:152-54).
In addition to its value as an insight into the types of "skills" competitive firms value,
and societies must have in large numbers if they are to be successful in the long run, the
preceding discussion makes clear that, increasingly, no single measure of skill or education level
can accurately predict one's ability to climb into and remain in the class of workers who will
experience sustained success. The bundle of skills that the twenty-first century's most successful
17
In the United States, wage earnings differentials between college and high school graduates increased from
about 33 percent to nearly 56 percent between 1979 and 1989 and have nearly doubled in the last 10 years.
Instructively, until the mid-1990s, both groups experienced losses in real wages since 1979: young male high
school graduates by 30 percent, college graduates by 8 percent.
18
Increasingly, tangible things such as advanced physical infrastructure (including the availability and cost of
capital), relative social and political stability, a growing class of consumers, and a basically sound macroeconomic
foundation, are becoming "more equal" across most advanced industrial and even some industrializing countries.
These are the attributes that capital (and footloose companies) value most as they seek the most advantageous
returns on investment.
19
”Thinkers” are not unlike the “symbolic analysts” who are Robert Reich's candidates for continued economic
success. Such analysts "solve, identify, and broker problems by manipulating symbols. They simplify reality into
abstract images that can be rearranged, juggled, experimented with, communicated to other specialists, and then,
eventually, transformed back into reality" (Reich 1991:178). For Reich, with his strikingly binary view of the world,
“symbolic analysts” will also be the crucial source of wealth in the only truly “American economy” left: the sum total of
the capacities of Americans to contribute value to the world economy (1991:219-224).
3.1.10
workers will need goes far beyond reading ability, arithmetic skills, and most of the other skills
taught in many of the North's high schools, and even the technological adeptness that can be
learned on the job or in training programs. Successful workers will need to be adept in
communication per se—effectively developing, analyzing, and transmitting concepts and ideas
and translating them into high-quality products and sales in the world economy.
CONCLUSION: BACK TO IMMIGRATION
If this analysis is even partially sound, one of the most important "qualities" a worldclass worker can have is adaptability. In an era and an economic system where firms—even
industries—are born, move, or die at an unprecedented pace and technologies always change,
successful workers ("thinkers," "traders," but also "makers") must be ready at all times to "pack
up their skills" and move to new pursuits. Upward occupational mobility may now be attainable
more easily across rather than within firms. The most successful workers may thus be those
constantly on the lookout for a more productive use of the unique bundle of skills and talents
they possess. Hence the need for educational reforms that impact not only the "basics" of
building analytical skills and encouraging original, creative thinking, but also the skills for
effective transitions from school to work and from one job or industry to another. Only by
giving workers the tools and the opportunity to extract real value from applying what they have
learned in the education system will our societies be able to maximize our returns on our
educational investments.
This analysis also requires that the foundations on which the North's economic
immigration stream rests—in both the permanent and temporary admissions systems—also be
re-thought. The essential question is how to promote an economy's competitive interests by
facilitating access to key foreign-born personnel without unnecessary procedures, while
simultaneously not undermining the broader social policy goals that advance the interests of
domestic workers overall.
Pursuing immigrants with the higher-level skills that competitive economies need now
and from which they can benefit well into the future should be just one part of a broad
competitiveness strategy. Failure to pursue diligently the other elements in such a strategic plan
of action (particularly in education, training, and broader social policy areas) or relying on
immigration in a way that acts as a disincentive for the market to make the adjustments it would
otherwise make20 in response to tighter supplies of highly qualified workers, might make
broader national priorities less likely to be achieved.
First and foremost, globalization prods all advanced industrial societies to make an
unequivocal commitment to lifetime education and training. A thoughtful and well-managed
immigration policy will neither be in conflict with nor passively undermine that effort. Rather,
it would offer an opportunity for engaging each country's business community in a dialogue about
investing more intelligently and comprehensively in the preparation of domestic workers. Such a
20
These might include offering higher wages in a manner consistent with gains in productivity, improving working
conditions, and making additional investments in technology, organizational innovation, and worker training and
retraining. Such initiatives enhance worker productivity and pay handsome long-term dividends in terms of both
social development and global competitiveness.
3.1.11
policy would place immigration within the larger framework of a national competitiveness
strategy that chooses and facilitates the admission of the best qualified immigrants while
investing systematically in increasing labor market self-reliance.
Most northern societies, however, are still struggling with a fundamental failure of
imagination in this regard. By most measures, neither business nor government have been doing
a nearly adequate job in training and retraining, while efforts to create a synergy that would at
least help young people make more effective transitions from school to work have yet to bear
fruit. Even if some of these efforts gradually begin to pay off, however, the relatively few
workers who will receive generic training under such programs may not meet the specialized
needs of firms that now hire foreign professionals.
It is in this context that immigration has and must continue to be relied upon to provide
increments of the skilled and educated workers advanced economies need. In the absence of
flexible and well-managed economic immigration selection mechanisms, many of the West's
most competitive firms with global operations have been reconsidering their investments in
additional capacity in their "home" countries. Firms whose products are primarily knowledgebased, such as software developers, can choose to expand anywhere where the main intangible
asset they need—”knowledge workers”—are in ample supply.
"Real-time" satellite
communications that bridge distances instantly and lower labor costs, together with incentive
packages from other countries for locating there, make the temptation to move and/or expand
their operations abroad ever more enticing.
Manufacturers of tangible products are confronted with similar calculations. When Intel,
Inc., the computer chips giant, announced in 1996 its intent to expand its manufacturing
capacity, more than $3 billion of the investment, expected to create about 3,500 jobs, went to
places other than the United States.21 The lesson? Globalization means that firms must be
"convinced" that investing in one place rather than another is in their stockholders' interest.
With knowledge having become so diffuse, and with competition among countries for attracting
strong corporations intensifying (Israel committed $608 million in "grants" to attract the $1.6
billion Intel investment), global firms increasingly look for such assets as an excellent
workforce, a modern infrastructure, a strong consumer base, and a business-friendly
environment. Immigration policy—no less than policies to improve the quality of a country's
human resources, maintain an excellent infrastructure, and provide a business-friendly
regulatory environment—must thus support rather than undermine efforts to convince firms that
they can remain and expand their operations in "our" countries and still be competitive in the
global marketplace. Hence the greater interest in skilled and talented foreigners and the
projections of increasing competition for such foreigners I made earlier in this essay.
Does this "new" environment open a new chapter in how we will think about and act on
international migration more generally? Only time will tell.
These were in addition to expanding Intel's manufacturing operations in the United States. Most of Intel’s new
foreign investment went to Israel and Ireland.
21
3.1.12
WORKS CITED
Moss Kanter, Rosabeth. 1995a. World Class: Thriving Locally in the Global Economy. New
York: Simon and Schuster.
_____________. 1995b. "Thriving Locally in the Global Economy," in Harvard Business
Review, September-October: 151-160.
Papademetriou, Demetrios G. 2000. "The Future of International Migration: A Tentative but
Likely Scenario." Paper prepared for the Seminar on “Alternative Futures.”
University of Oxford, June 1 to June 3, 2000.
Reich, Robert. 1991. The Work of Nations. New York: A.A. Knopf.
Papademetriou, Demetrios G. and Kimberly A. Hamilton. 2000. Reinventing Japan: The
Role of International Migration. Carnegie Endowment for International Peace
and the Brookings Institution.
Papademetriou, Demetrios G. and Stephen Yale-Loehr. 1996. Balancing Interests:
Rethinking U.S. Selection of Skilled Immigrants. Carnegie Endowment for
International Peace and the Brookings Institution.
3.1.13