Research Profile

Saturday, 10 November 2012

No people, no recovery - the UK economy cannot afford a talent deficit

Opinion is divided on whether we are entering a phase of growth or enter a triple-dip recession and whether the coalition is being effective in cutting the structural deficit.

But our economy will not recover simply by virtue of paying off some of our accrued debt and we need to pay attention to another developing problem - which is a deficit of talent.

Last week there was a report on an increasing number of professional emigrants, doctors, dentists, lawyers, academics and many others - from the UK. According to report 48% of the 149,000  British emigrants last year came from a professional background compared with 37% in 1991.  

Many blamed the UK's higher rates of tax - but a focus on individual tax rates is unlikely in itself - to stem the tide of professional emigrants from the UK.

Those who have options for employment around the world will consider not simply their own personal financial situation but also the competitiveness of the business environment, the attractiveness of the social structure and the prospects for their families. With the UK in its current state, the only surprise is that the numbers are not higher.

To retain and attract the talent we need to drive an economic recovery, we must offer a world-class professional environment coupled with an attractive social and physical infrastructure – in short, somewhere people actually want to live as well as work.

The environment in the UK does not fare well by comparison with other countries. World class entrepreneurs, business people, academics and researchers in this country are often successful in spite of, not because of the environment we’ve created for them.

It is essential, then, that we create conditions which make it easier for individuals to succeed.  For entrepreneurs this means more ready access to finance, for businesses it means more sensible taxation strategies and regulatory reform. 

For academics it means a competitively funded research environment.

The report brings into sharp focus the importance of people to our economic recovery. If we fail to pay attention to this warning shot, the numbers will continue to rise, and without the best talent, there is no prospect for long-term economic prosperity.

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