Talent Economy

With the era of the knowledge economy winding down, what comes next? The talent economy. Using migration as a lens makes the emerging epoch easier to understand. More from the "stream migration" discussion:

There’s a stream motivated by the Canadian domination of speculative mining finance. There are three vortex cities that are fairly tightly connected: Vancouver, Calgary, Toronto. The gyres involve all of Latin America but especially Santiago Chile, Lima Peru, and Mexico City.

Mining industry people (entrepreneurs, consultants, engineers, geologists, anthropologists) are bilingual and either live stints in various countries or split their lives between Canada and a Latin American country. Many have dual citizenships. Many think of their home turf as the Western Hemisphere excluding the USA.

The part of the stream that meets the relative poverty criterion consists of upstart geologists looking for mineral deposits and the consultants in peripheral areas like community relations/development. There is also a substream of rural development NGO types that often merges with this mainstream. A sub-stream of academics (esp. grad students) studying globalization, development, and resource industries is starting to emerge as well.

The stream size is probably around ten thousand. There are several mining and oil industry conventions that bring a substantial percentage of the members together annually. I believe the Australians have a similar stream in the mining industry with all the nations of the South Pacific (Indonesia, Philippines, Papua New Guinea, etc).

This mining stream reminds me of patterns in shale gas investment. Countries outside of the United States are seeking access to the knowledge of hydrofracking, which is still developing. Drilling crews trained in Pennsylvania may find themselves working in Poland, establishing a new stream. Polish Hill in Pittsburgh is reconnected with its homeland in an unexpected way. But it isn't a story of immigration, emigration, or even the return of the prodigal sons and daughters. Instead, knowledge is exchanged along the lines of an ephemeral but repeating migration (i.e. brain circulation).

Knowledge isn't exchanged or traded. Talent is loaned or traded. In today's Wall Street Journal, a different way of thinking about the US export economy:

Of particular interest here are businesses that don’t need face-to-face contact, such as management consulting, engineering, law, and scientific research. Private business services are included in the “other private services” section of the monthly trade data, which accounts for half of the total U.S. surplus in services.

Jensen found jobs in these industries tend to pay more than positions in manufacturing and construction, which isn’t surprising since most require college educations and even advanced degrees.

“Precisely because they require a high degree of skill, they are jobs that the U.S. is likely to retain–and that can support exports,” Jensen argues in his book. The skill requirements also mean fewer of these high-wage jobs are likely to be lost to emerging markets.

Emphasis added. The bold part of the passage presents a conundrum. If the trade doesn't require face-to-face contact, then is only knowledge exchanged (as opposed to talent)? I think the answer is no. The knowledge is still locked in talent, hence the claim that "these high-wage jobs are likely to be lost to emerging markets." Talent, not knowledge, is the commodity traded. The business is selling expertise.

I'm more interested in businesses that do require face-to-face contact and thus the physical transfer of talent to another country. That migration is the map of the talent economy. Also, there is the migration of business to the location of the production of esoteric talent, such as found in Albany and that particular nanotech cluster.