US and UK own-goals are Italy's best chance to enter the global competition for talent
As Donald Trump's stances and Brexit have shown, the spectre of restrictive immigration policies in an increasingly globalized labour-market may result in unexpected side-effects. Especially if, as in the US, these policies are affecting the skilled workers.
From the very beginning of Trump's term, the issue of immigration has represented a major political milestone for the US administration. In January, the government adopted a two-pronged strategy aimed at incentivizing companies to "hire American" by reducing legal immigration. In February, Senator Tom Cotton introduced the RAISE Act, designed to halve GC holders. And a few weeks later, The Protect and Grow American Jobs Act was published - a controversial bill amending H-1B visa requirements that would make it harder for companies to hire non-US workers.
For many, this move may backfire on the US labour-market. "Anytime we restrict high-skilled immigration we are creating more incentive for people to go elsewhere," said Annalee Saxenian, Dean and Professor of the UC Berkeley School of Information. A daunting prospect, considering that the employment of foreign skilled workers, especially in the HT sector, is anything but irrelevant. According to a report by Goldman Sachs, about 900k of US workers are actually H-1B visa holders. For them, a raise in minimum wage from 60k to 90k dollars might be a matter of concern, since their employment would become much more expensive. As a result, companies will be more inclined to hire US citizens, regardless their skill level, discouraging new talents from expatriating to the US.
Meanwhile, in Europe, workers' fate hangs in the balance. Their post-Brexit future will depend on the outcome of the confrontation between the UK and Michel Barnier, the chief EU negotiator. In June 2016, the referendum on Brexit cast a shadow over EU citizens living in the UK, raising questions about the future of EU workers. What will happen after Brexit? Will it be rosy or grim? There is no straight answer to that. The Brexit White Paper states that the UK "will always want immigration, including from EU countries, and especially high-skilled immigration." How the principle will be implemented, however, is not clear.
More realistically, their future may well depend on the position of the EU on Britons currently living in the continent. "The EU might decide to take a tough stance," said Paul Gulbenkian, a former Immigration Tribunal Judge. "If that happens, the UK government is likely also to take a tough stance." The problem is that many EU workers are not willing to wait until the end of negotiations. According to a survey conducted by the law firm Baker McKenzie, about 56% of skilled workers surveyed are likely to leave the UK before March 2019, the official date of Brexit.
This may be a game changer for Italy, which has now the chance to reverse its "brain gain" negative trend. In 2017, its inflow mobility rate decreased, indicating that Italy has become less attractive for highly-trained foreign-born professionals. According to the Global Talent Competitiveness Index, the brain gain score in the country dwindled to 25.89 points as against 29.33 in 2013.
Moreover, the Italian government is becoming concerned about the increase in outflows. As a result of the current lack of opportunities, over half a million Italians have left their country between 2008 and 2015, shows a report by the Italian Statistical Observatory of Labour Advisors. Such a delicate situation requires the introduction of appropriate measures. Recently, the the Italian PM Gentiloni has released a statement on the necessity to take immediate action to limit the brain drain.
A first step towards encouraging inward mobility was made in January, with the adoption of the decree on ICT permit. Nevertheless, such moves may not substantially improve the attractiveness of the Italian labour market. As reported by the OECD, and implemented by a few countries, notably Ireland and Canada, entering the global competition for talent requires an "explicit mobility strategy." Otherwise, the risk of incoherence among policies increases.
As in the case of Italy, governments generally tend to support inward mobility and to limit outflows. A successful medium-term strategy should, on the contrary, take the benefits of brain circulation into account, by encouraging both outflow and inflow mobility. The idea is that a country will always benefit from a well-founded and properly supported knowledge transfer. For this purpose, "one promising avenue is removal of barriers to short-term and circular mobility." However, in practice, that would result in the removal of all the obstacles to mobility, including "legal and administrative barriers, lack of funding, personal issues and language."
Due to restrictive US immigration policies and Brexit uncertainties, 2018 will be a crucial year for the global competition for talent. It is time for the Italian government to sort things out and make use of the momentum.