African countries improve talent competitiveness

Global Talent Competitiveness Index (GTCI) 2017

Talent competitiveness measures a country’s capability to compete for talent, according to their ability to grow, attract and retain talent. The European Institute for Business Administration (INSEAD) introduced the concept of talent competitiveness in the GTCI 2013, flagging the idea that ”technological change will affect new segments of the labour market, implying changes in the required profiles and employable skills”. Technology makes change inevitable in the workplace and a different, adaptable skillset as well as more flexible institutions are necessary to keep up.

Talent and technology

The concept of talent competitiveness gradually became an important part of global government and business leaders’ vocabulary, surfacing in many international discussions, conferences and meetings. The GTCI 2017 focusses on the theme ‘talent and technology’, exploring how technological change has been (and will be) affecting the nature of jobs. This builds onto the GTCI 2016 theme that explored the international mobility of talent – concluding that technology redefines mobility in the sense that robots replace low-skilled workers, while algorithms displace knowledge workers.

How to robot-proof your career

Machines are unlikely to create mass unemployment as previously predicted in periods of technological change. Technology has replaced some routine manual jobs, but it has also started to replace knowledge jobs in professions such as law, medicine and consulting. On the other hand, jobs that demand high skill levels as well as brand new fields, such as data analytics, are emerging.

Education, employment policies and national strategies must adapt to a work environment in which career changes will be part of a typical working life. Creativity and social ability are becoming integral skills to robot-proof careers. Institutions must encourage flexibility while offering social protection and training for new opportunities. The GTCI 2017 details seven key factors that will be the most important in combining talent and technology in the work place.


Seven factors that shape the future of work

Income and talent competitiveness go hand-in-hand

Globally, there is a strong positive correlation between GTCI scores and GDP per capita. Unsurprisingly, the high-income group dominates with Switzerland ranking first, followed by Singapore and the United Kingdom. The USA, Sweden, Australia, Luxembourg, Denmark, Finland and Norway form the rest of the top 10.

High income countries are the most competitive

In general, high income countries perform the best, followed by upper-middle-income countries, lower-middle-income countries and lastly low income countries – with only a few outliers on both ends. There are only three non-high income countries (Malaysia, Costa Rica and Montenegro) in the top 40%. Table 1 illustrates the correlation between GTCI and income by indicating the income category that dominates each quartile.

Strong correlation between GTCI and income

Strong correlation between GTCI and income

Middle income countries face challenges

Interestingly, a comparison of middle income countries, specifically the BRICS (Brazil, Russia, India, China and South Africa) countries, shows that these large emerging markets have somewhat deteriorated in terms of talent competitiveness since 2016. All the BRICS countries are upper-middle-income category, except India that classifies as lower-middle-income. Brazil moved down from 67th in the 2016 report to 81st in 2017, Russia from 53rd to 56th, India from 89th to 92nd, China from 48th to 54th and South Africa from 57th to 67th.

Brazil experienced the largest decrease, particularly due to a limited pool of global knowledge skills. Russia’s GTCI score remained relatively unchanged, compared to BRICS. Overall, the challenge for India and China is to attract talent from abroad, particularly in the context of large emigration rates of high-skilled people to Europe and North America. South Africa, on the other hand, has major challenges in retaining talent, particularly due to a worryingly high personal safety score.

Africa dominates the low income group

Only 10 low-income countries are included in the GTCI sample. This is due to poor data availability in low-income countries. Of these, Rwanda is the best performer, with Senegal and Uganda ranking second and third. Rwanda ranks in Africa’s top 10 (in 8th position) and performs well in the enable and attract pillars. Specific strong components include a good business and labour landscape and regulatory environment. With limited resources, low income countries have some way to go to increase their talent competitiveness.

Africa improves talent competitiveness

The GTCI 2017 covered 118 coun­tries in 2017, up from 109 in 2016. Only 14 African countries were included in 2016, yet GTCI 2017 includes 23. Due to data limitations it is necessary to note that Nigeria, one of Africa’s largest economies in terms of GDP, is still not included. Even though the African region performs relatively poorly compared internationally, it is possible to gain interesting insights when comparing African countries with each other and by tracking Africa’s GTCI performance over the years. Figure 2 shows a heat map where red indicates the lowest scores and green shows the top performers.

Africa’s performance in GTCI 2017

Africa’s performance in GTCI 2017

The top performers attracting talent

Mauritius is the continent’s top performer and the only African country to rank above the global median GTCI score. This island performs well due to a strong regulatory landscape and good business-government relationships. Additionally, Mauritius has a very high internal openness score and favourable lifestyle. This allows the country to attract global talent and retain skilled employees. Furthermore, the island nation ranks 8th globally for taxation. It is interesting to note that Mauritius performs better in vocational and technical skills than in global knowledge skills, indicating a better performance in the mid-level skilled occupations than high-skilled occupations.

Botswana ranks second in Africa, and improved its global rank from 68th in 2016 to 63rd in 2017. A small gender earnings gap as well as a high new business density contributes to Botswana’s success. Botswana ranks 1st globally in both the ease of hiring and tertiary education expenditure.

South Africa ranks third on the continent, but moved down 10 positions globally from 2016 to 67th. Personal safety as well as a poor performance in labour-employer cooperation and business-government relations seems to create a work climate where South Africa struggles to retaining talent. On the positive side, South Africa has a large number of female graduates, high technology utilisation, high employee development with lifelong learning and the skills gap is not seen a major constraint. South Africa is the top performer in Africa when it comes to the global knowledge skills output and therefore performs well in high-skilled jobs that deal with knowledge workers in professional, managerial, or leadership roles that require creativity and problem solving.

The lowest ranked struggling to compete

The African countries who score low in terms of talent competitiveness are clustered in the Southern and East Africa regions, with the exception of Burkina Faso. Madagascar and Tanzania (East Africa), Zimbabwe and Mozambique (Southern Africa), and Burkina Faso (West Africa) fall in the bottom 20%.

These countries struggle to compete for talent in Africa and might lose a part of their talented workforce to neighbouring countries or other countries with a high openness to attract talented foreigners. It is important to increase their talent competitiveness score to prevent the outflow of skilled labourers.

How Africa is excelling

Of the 14 African countries included in both GTCI 2016 and GTCI 2017, 12 managed to improve their GTCI score, with only South Africa and Kenya showing a decreased talent competitiveness score. This shows a trend towards a higher talent competitiveness in Africa. Ghana, Algeria and Senegal improved by the most. Ghana, the top improver, ranks 4th in Africa in the growth pillar, particularly excelling in the prevalence of training at firms, quality of management in schools and personal rights. Attracting talent is not problematic for Ghana, but retaining talented employees deems to be challenging – this is true for both mid-level skilled as well as high-level skilled jobs.

If the majority of African countries continue to improve their GTCI scores, the continent will come to be more globally competitive when it comes to talent and technology. This is important to ensure that Africa can keep up with technological change and the impact it has on the workplace – in order to retain their talented workforce. This will lead to a higher level of vocational and technical skills and more global knowledge skills that will in turn translate to a productive workforce and a better economy.

For more information:

AnkeAnke Joubert
KPMG South Africa
T: +27 (0)82 380 1156
E: ankejoubert@kpmg.co.za

David Okwara

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