The importance of national and corporate boundaries is diminishing as everyone piles into the global war for talent.
Wealth is shifting from corporate and country structures to talent.
Chelsea just picked up Eden Hazard in a £90 million football transfer. Apple is paying £36 million for the former Dixons retail boss, and Facebook is rumoured to be offering huge sums to engineering teams involved in the iPhone. Meanwhile the Monsoon founder received a dividend of £30 million in what were apparently ‘tough trading conditions’.
Whilst mega-million payments seem at odds with the backdrop of the Eurozone crisis and retail market panic, they underline the fact that the origin of wealth is now the talent that creates significant production or consumption (or ideally both, as in Apple). Bankers have always known this: as pay packets fall talent walks.
Time was when corporate or national structures were essential: the channels to market, the factories, the organisations and their management. Now with a globally connected, flattened world, value rests on the uniqueness of your ideas, intellectual property and raw innate skill. People have X-Factor moments as 15 minutes of fame, or 15 seconds on YouTube. A Harvard drop out can create a Microsoft or a Facebook.
On the plus side this flattening creates meritocracy and equality of opportunity. But it also heightens competitive pressure. If you’re one in a million, there are 40 of you in California.
I once helped craft a labour strategy for an Asian country, which examined the underlying economics of talent – for example, the price point at which it made economic sense to fund a student training to be a doctor.
Anyone looking into these issues would quickly notice that certain populations tend more towards certain types of excellence, be it creative, physical, logical or scientific. Biologists have explained this by hypothesising that brains get wired quite differently at a very early age, aided in part by context.
Success in this century requires countries to ‘talent farm’ their natural (human) resources, with effective educational systems, and opportunity and choice in the workplace. Individuals must ‘talent bank’ – treating skills and learning as the most valuable commodity they own, and race to ensure it is never just a commodity by constant re-learning.
The sheer volume of human resource in Asia at low salary expectations, combined with the lower cost of learning creates significant pressure on Western graduates. We only manage to keep up by staying ‘artificially intelligent’ through connectedness to the web, or by benefitting from contextual creative insights born out of our exposure to massive diversity.
The next big thing should be not banks but talent banks or educational resources that keep us intellectually fit.