Brainpower famine in Eastern Europe: food for thought

lisboncouncilreport.jpgThe Brussels based think-tank, The Lisbon Council, sees trouble ahead for the countries of both Western and Eastern Europe. The Eastern European low-wage, low-tax, FDI-driven growth rates of today, accelerated by membership of the EU, are not going to last. A combination of low-birth rates and increasing brain drain will combine to fix their economic trajectories at well below the EU average with no prospect of improvement. And that is a problem for Western Europe too: it has been the dynamism of the East which has given a fillip to the West.

In its just issued report, The European Human Capital Index: The Challenge of Central and Eastern Europe, the Lisbon Council claims:

There is a very real risk that in coming decades Central and Eastern Europe could become a sparsely-populated area with a declining workforce that will have to shoulder the burden of a population set to experience unprecedented levels of aging and decline. At stake is nothing less than the long-term sustainability of these remarkable countries, which have added so much to Europe’s history, economy and diversity.

Now, if we look beyond the doom-laden futurology and risk of future collapse which seems to be so much a part of these calls for action, we can begin to see the contradictions in the analysis and the prescriptions. The EU economy is driven by processes of centralization and concentration and we can see this in the movements of knowledge, technology and capital. Universities are heavily implicated in this and the mobility of students and the highly skilled is the brain drain which is going to accelerate the emptying of the East. The extension of service and production commodity chains into the East and the region’s growth as a consumer market has gone hand in hand with their low tax, flexible labor laws and low state spending. In short the growth model is predicated on the very things which the Human Capital Index measures as being lacking.

The Lisbon Council solutions – reformed universities, on the job skills training, investment in knowledge, skills and innovation – require a shift in the growth model and the question is, how to achieve that within the context of macro and micro economic orthodoxy, the EU promotion of mobility and double-think about brain drain. At the time of the formation of the EU single market there was a response – the EU as a whole had to invest in the conditions for more and better jobs and a geographical spread so that capital, technology and knowledge are shifted away from concentration and centralization. The problems and solutions were posed in those terms which of course requires an increased European tax base and a commitment to significantly greater regional re-distribution and planning.

The challenges have always been clear and the solutions filled with all sorts of dilemmas which don’t even get a mention from the Lisbon Council. Human capital mantras suggest that the governments in Eastern Europe need to improve the supply of human capital, invest more in formal education, create their entrepreneurial universities and attract migrant (cheap) labor from the potentially massive new pool of Turkey etc. And so move themselves onto a different growth path. Perhaps.

One thing that is increasingly clear, is that the Economics of Education and the Human Capital theorists, and this report comes straight out of that stable, can offer descriptions based on such measures as its Human Capital Index, but its policy relevance is restricted and amounts to the same old same old. Quite how societies approaching the sorts of collapse envisaged in the report would react and what shibboleths of neo-liberal human capital development models would then be questioned seems to be beyond their remit. A pity.

Peter Jones

EU Blue Cards: not a blank cheque for migrant labour – says Barroso

berlin1.jpgThe global competition for skilled labor looks like getting a new dimension – the EU is planning to issue “blue cards” to allow highly skilled non-Europeans to work in the EU. On Tuesday 23 October José Manuel Barroso, President of the European Commission, announced plans to harmonize admission procedures for highly qualified workers. As President Barroso put it:

With the EU Blue Card we send a clear signal: Highly skilled people from all over the world are welcome in the European Union. Let me be clear: I am not announcing today that we are opening the doors to 20 million high-skilled workers! The Blue Card is not a “blank cheque”. It is not a right to admission, but a demand-driven approach and a common European procedure.

The Blue Card will also mean increased mobility for high-skilled immigrants and their families inside the EU.

Member States will have broad flexibility to determine their labour market needs and decide on the number of high-skilled workers they would like to welcome.

With regard to developing countries we are very much aware of the need to avoid negative “brain drain” effects. Therefore, the proposal promotes ethical recruitment standards to limit – if not ban – active recruitment by Member States in developing countries in some sensitive sectors. It also contains measures to facilitate so-called “circular migration”. Europe stands ready to cooperate with developing countries in this area.

Further details are also available in this press release, with media and blog coverage available via these pre-programmed Google searches. As noted the proposed scheme would have a common single application procedure across the 27 Member States and a common set of rights for non-EU nationals including the right to stay for two years and move within the EU to another Member State for an extension of one more year.

The urgency of the introduction of the blue card is framed in terms of competition with the US/Canada/Australia – the US alone attracts more than half of all skilled labor while only 5 per cent currently comes to the EU. This explanation needs to be seen in relation to two issues which the GlobalHigherEd blog has been following: the competition to attract and retain researchers and the current overproduction of Maths, Science and Technology graduates. Can the attractiveness of the EU as a whole compete with the pull of R&D/Industrial capacity in the US and the logic of English as the global language? Related to this obviously is the recent enlargement to 27 Member States where there are ongoing issues around the mobility of labor within the EU? We will continue to look beneath the claims of policy initiatives to see the underlying contradictions in approaches. The ongoing question of the construction of a common European labor market and boosting the attractiveness of EU higher ed institutions may be at least as important here as the supposed skilled labor shortages.

Futurology demographics seem to be at the heart of the explanation of the need to intensify the recruitment of non-EU labour – according to the Commission the EU will have a shortage of 20 million workers in the next 20 years, with one third of the EU population over the age of 65. Interestingly though, there is no specification of the kinds of skill shortages that far down the line – the current concern is that the EU currently receives 85 % of global unskilled labour.

Barroso and the Commission continue to try to handle the contradictions of EU brain attractiveness strategies by the preferred model of:

  • fixed term contracts;
  • limitations on recruitment from developing countries in sensitive sectors; and,
  • the potentially highly tendentious notion of ‘circular migration’.

High skilled labour is effectively on a perpetual carousel of entry to and exit from the labour market with equal rights while in the EU which get lost at the point of departure from the EU zone only to reappear on re-entry, perhaps?

According to Reuters the successful applicants for a blue card would only need to be paid twice the minimum wage in the employing Member State – and this requirement would be lifted if the applicant were to be a graduate from an EU higher education institution. Two things are of interest here then – the blue card could be a way to retain anyone with a higher education qualification and there are implications for the continuing downward pressure on wage rates for the university educated. It will be interesting to see how this one plays out in relation to the attractiveness of EU universities if a blue card is the implied pay-off for successful graduation.

Peter D. Jones