Global migration, innovation and job creation

Global Migration Patterns and Job Creation
 
JIM CLIFTON, Chairman and CEO of Gallup - Gallup Management Journal

11 October 2007

http://gmj.gallup.com/content/101680/Global-Migration-Patterns-Job-Creation.aspx

"We ask 100 core questions in our standard World Poll survey regarding seven critical conditions of life -- conditions that are present in every country. When any of these conditions are higher or have momentum, it is likely that brain gain and GDP are higher. The seven critical conditions cover law and order, food and shelter, work, economics, health, well-being, and citizen engagement. There are several question items per each condition. For instance, "Do you feel safe walking alone at night in your community?" is one of four questions that measure the human condition of law and order. At the other end of the behavioral economic algorithm is "Have you volunteered your time to an organization ?,"which factors into the condition of citizen engagement.

Each domain is never static; things are always getting a little better or a little worse. Because they are not static, they can't be "resolved" -- cities and countries must improve them continuously. "

....Twenty-five years ago, virtually every economist, liberal and conservative, forecast that the GDP of the United States would lose its first-place ranking and drop to third. News shows, newspapers, and business magazines predicted that Japan's GDP would be around $5 trillion, Germany's would be around $4 trillion, and the United States would fall to third at about $3.5 trillion by 2007.

The economists were partly right. Japan is at about $4.5 trillion, and Germany's at about $4 trillion too. But they couldn't have been more wrong about the United States. The country's GDP didn't fall. Over the last 25 years, it grew to $13 trillion. The best economists in the world were off by more than $10 trillion.

They were wrong because their economic models didn't include the most powerful variable of all: the migration patterns of the most talented people. Value is now created from piles of ideas and determination, not piles of materials and natural resources. The economists underestimated the massive force of innovation and entrepreneurship that led to a technology revolution.

Now global economists are saying that by 2040 or sooner, the U.S. GDP will fall to second, behind China. Their formulas assume that everything is linear or cyclical and that man is rational. China has more consumers and more low-wage producers, so logic dictates that China's economy will be an unstoppable juggernaut. That logic is likely to be just as colossally wrong this time because it doesn't consider where the next big build-out of innovation and entrepreneurship will occur. It doesn't consider brain gain or the migration patterns of talent. It could, however, be colossally right -- but only if China becomes a center of innovation and enterprise, attracting and retaining highly talented people....

If 1,000 individuals were the "Columbus-type" explorers who receive all the credit for the economic value they discovered and claimed, let's generously assume that they had 10 other world-class supporting cast members around them -- 10 people who were so important that there would be no economic miracle without them. So that equals 10,000. We then multiplied the 10,000 builders of big businesses by 10 again to determine a rough gauge of how many inventors and rainmakers it takes to support the continuing growth of the total U.S. GDP. Ten thousand multiplied by 10 (to take into account and give credit to the dominance of jobs in small- to medium-sized corporations, which make up about 70% of the U.S. workforce) equals 100,000. In other words, a mere 100,000 stars of varying sizes created the unforecasted current state of growth of the United States, a country of 300,000,000 people.

Here's the part that matters to leaders: These 100,000 stars would have created that growth wherever they resided. If they had all set up shop in Sioux Falls, Kansas City, and Fargo, it would have all happened in the American Midwest. If this group had all lived in Sao Paulo, Rio de Janeiro, or Brasilia, $10 trillion would have magically appeared in Brazil.

The math is simple. One star per $100 million of GDP growth.

Researchers counted how many people created the technology build-out that led to the $10 trillion of unplanned revenue growth over the last 25 years in the United States. It appears to be about 1,000 people. Just 1,000 unusual star innovators and rainmakers....

Creating brain gain

Talented people create brain gain. Brain gain and brain drain are among the most crucial factors for the growth and well-being of any organization -- from a one-employee business to the most powerful government on Earth. The most important issue for leaders is to identify and cultivate the conditions that create brain gain. They have to know the key factors.

We ask 100 core questions in our standard World Poll survey regarding seven critical conditions of life -- conditions that are present in every country. When any of these conditions are higher or have momentum, it is likely that brain gain and GDP are higher. The seven critical conditions cover law and order, food and shelter, work, economics, health, well-being, and citizen engagement. There are several question items per each condition. For instance, "Do you feel safe walking alone at night in your community?" is one of four questions that measure the human condition of law and order. At the other end of the behavioral economic algorithm is "Have you volunteered your time to an organization …" which factors into the condition of citizen engagement.

Each domain is never static; things are always getting a little better or a little worse. Because they are not static, they can't be "resolved" -- cities and countries must improve them continuously. Furthermore, we found that there is an order of importance to the issues, and that the higher the scores on these issues, the greater the potential for higher brain gain and GDP. A leader's biggest challenge is creating momentum on any of these critical domains.

..To get a better idea of how to identify and incubate the stars, our team coded the characteristics of several hundred extraordinarily successful business, political, and nonprofit leaders. Only four categories or codes were needed to classify them all....

1) Innovators

Innovators get ideas that create new products, new markets, stock value, and hatch thousands of jobs...

2) Entrepreneurs

Entrepreneurs are most recognizable as super-salespeople or rainmakers. Entrepreneurs are those who see an idea, recognize the potential, figure out the necessary steps for making the idea a reality, and then bring the Innovator together with supporters to form a new venture...

3) Superstars

Superstars are extremely rare creative achievers, people unusually gifted in the arts, entertainment, or sports. They're famous authors, singers and other musicians, artists, chefs, architects, actors, fashion designers, politicians, soccer and basketball players, etc. Such celebrities need their own category because they are valuable magnets for the cities where they live and work, but mostly because they're economic engines themselves. ...

4) Super Mentors

Innovators, Entrepreneurs, and Superstars rely, whether they know it or not, on genius developers. We call such developers Super Mentors. They are the people who say, "Your idea could become a company. I'll line up investors for you." Or, "We need to get behind that professor's idea. He needs a lab here in town." Or, "Let's start a youth program that's the best in the country."

There are several varieties of Super Mentors. Often they are "city fathers," rich business people who care deeply about their city. They can be great college presidents or the heads of philanthropies or religious leaders or CEOs. Sometimes they're just average citizens with a deep commitment to the place where they live and the ability to find and encourage raw talent. In any case, Super Mentors have a gift for identifying and developing young stars and strong hands to guide and lead them.
Super Mentors also have the rare capacity to command broad support and participation in local initiatives that otherwise wouldn't happen. The best and fastest growing cities in the world have an informal, never-elected group of Super Mentors. They work outside the local government and meet regularly to determine activities and strategies to help their city and people win.

One could argue that this group of Super Mentors makes a bigger and more positive impact on cities than do local governments. They have as much or more access to money and influence within the community as government leaders do, and they have the great advantage of speed and fewer barriers. And they serve a critical function -- they are the very kindling that starts the fires of Innovators and Entrepreneurs...