Saturday, August 28, 2010

Geopolitics Of Talent Migration

Relatively low commodity prices have, for the time being, cooled the rhetoric about talent shortages in the energy industry. Drilling and mining boomtowns are cycling through a period of slow growth. In Calgary, construction and real estate are struggling:

"Will the fall be any better; I don't think so," says Cal Wenzel, president and founder of Shane Homes.

In addition to feeling the impact of an overloaded resale housing sector, builders are also battling a reluctance by consumers to sign on the dotted line of the sales contract.

Wenzel adds that in-migration is a big problem for the industry.

"We need some people to move here. Oh sure, the latest migration numbers are up, but not enough to make any kind of dent in things," he says. ...

... The strength of the housing market, like almost everything else in this city, relies on the energy sector -- and right now things aren't all that great. Oil dipped below $75 recently and natural gas is still sputtering around $4.

Here, though, Wenzel offers some optimism since premier Ed Stelmach and his cronies have backtracked on the oil royalties issue.

That has brought some stability to the industry along renewed hopes exploration will increase, thereby expanding the need for more workers.

I'm skeptical of the stated benefits stemming from more favorable policy. However, the story in Calgary does translate to Pennsylvania. A rise in natural gas prices will increase the demand for labor in Canada and the United States. Wouldn't that be a better time to negotiate royalties and other benefits for the state? Regardless, at some point the labor market will tighten whether it be price hikes for oil or gas or both.

Excessive further border controls could hit the UK’s ability to recruit much needed nuclear engineers, according to Ged Mason, chief executive at technical and engineering recruiter Morson Group. ...

... Mason told Recruiter that certain high-end engineering skills shortages underlined the importance of recruiting talent from overseas.

“The engineering sector should look to train talent but there is a currently a renaissance in demand for nuclear engineers. If we hinder nuclear firms ability to bring in key engineers, this may affect deliverability and programmes. Britain last built a nuclear power station in the late 1980s. Some of the skilled engineers have retired or exited the sector.

“There are certain specialist skills where you would have to look abroad for. The US and France have been building stations and have the expertise. If these engineers are not brought in nuclear construction programmes be could delayed and deadlines not met.”

I take the analysis coming from recruiting services with a grain of salt. Such businesses are for liberalizing immigration policy because it serves their interests (i.e. bottom line). However, there is a shortage of highly skilled workers and appears to be a growing international competition for their services. I get the sense that the talent market for the energy industry is one of the most globalized. Emerging is a geopolitics of talent migration, something I don't recall reading about in graduate school. (I studied at one of the few geography programs in the States that boasts a geopolitical expert in residence) If you are or know a scholar with such a specialty, please contact me.

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