When it comes to improving the prospects for global prosperity in the long term, human capital should be considered as the prime source of opportunity as well as challenge. Unfortunately, we hardly pay heed to it. In the canonical models of economic prosperity, labor quantity and quality are considered as the main inputs. However, we still lack a worldwide integrated approach to the issue of migration. Interestingly, two other important factors in financial growth—productivity mainly driven by the dissemination of ideas and capital (primarily cross-border flows as well as trade)—are administered by global frameworks, with various rules and regulations pertaining to them monitored by global agencies.
Nevertheless, the labor policy falls within the purview of individual nations. Considering all challenges expected in the coming 50 years, it is apparent that an immigration approach, which is integrated globally, is the prime opportunity that we can now work on to maintain the growing prosperity longer.
As revealed by the International Labour Organization, about 73 million young workforce aged between 18 and 25 are unemployed across the world. The labor imbalance—across the world—is particularly noticeable if we consider the declining demographic dynamics of the growing number of aging people in the West, comprising Japan, as against the skew to a youth population in the rest, with up to 70% of them being under 25.
It is possible to enhance economic growth prospects in the long term by deploying the workforce from the places having a labor surplus to the places having a labor deficit. Nations grappling with labor shortage have already started leveraging the global talent pool but in an inefficient way. Therefore, a global policy aiming for an optimal level of migration will be able to leverage the talent pool across the world.
Such a suggestion is debatable. However, the debate should move from the familiar good or bad debate to a larger frame, which focuses on the optimal equilibrium globally. However, it is not easy to do as it comes with its own set of challenges.
No doubt, there would be an exchange between multiculturalism and economic advancement. So, the countries with low density—like Australia and Canada—can accommodate a higher percentage of migration than those having high densities.
There should be a labor approach that would be operationalized worldwide around standardized tests as well as minimum standards. Unless and until a more widespread approach is taken in order to allocate labor, a major chunk of human capital will remain confined to the places of surplus, thereby decelerating the global growth.
A solution is required for global migration (quantity) as well as for global education and training (quality). This is because until the quality of labor is good, it is not possible to get more innovative ideas and quality work that boost the global economy. So, for future prosperity, we need to make the best use of the human capital across the world.