International talent and business in the UK.

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From APPG

The ability to attract international skills is central to the
operation of many businesses in the UK, from small and
medium-sized enterprises to large multinational
companies. Between 2008 and 2011, businesses have
been able to recruit skilled workers from outside the
European Union (EU) under the Points-Based System
(PBS). Key routes of entry have been PBS Tier 1 (highly
skilled migrants) and Tier 2 (skilled workers, of which
60% entering in 2009 came via the Intra-Company
Transfer route). In addition, the Tier 1 Post Study Work
route for foreign graduates has provided a further
source of international talent for business in the UK.
Analysis compiled by the Migration Advisory Committee
indicates that skilled labour migration has generated
significant benefits for UK business and the economy
more widely. Tier 1 and 2 workers are likely to have a
positive impact on GDP per head, as well as making a
positive net fiscal contribution in the UK (MAC, 2010).
Many of the impacts reported in relation to low-skilled
economic migration, such as downward pressure on pay
and employment levels of resident workers have not
been strongly evidenced in relation to Tier 1 and 2
migrants (MAC, 2010)

Data from the Department for Business, Innovation and
Skills (BIS) in 2010 indicated that five sectors adding
substantial Gross Value-Added (GVA) to the national
economy between 2005 and 2008 – financial
intermediation; real estate, renting and business
activities; hotels and restaurants; health and social
work; and transport storage and communication – also
had a disproportionate share (60%) of the UK’s non-EU
workers (MAC, 2010). UK trade in migration sensitive
service sectors is significant, with 2009 credits/exports
estimated at £3.8 billion for computer and information
services and £25.4 billion for other business services
(HM Treasury, 2010).
Migration policy is central to the UK’s ability to attract
inward foreign direct investment, estimated at US$1,125
billion in 2009 (UK Trade and Investment, 2010).
Availability and quality of labour is known to be a key
investment location factor for many businesses. The UK
was ranked by the World Bank as the 5th best place to
do business internationally (CBI, 2010). 50% of Europeaadquarters are based in the UK (BCC, 2010), with the
UK attracting more inward investment projects than any
other European country in 2009 (UKTI, 2010).
The benefits to business from international skills are
likely to have strong regional variation, with particular
significance for those based within the capital.
International migration has been described as the
‘engine of London’s economic growth’ (Greater London
Authority, cited by MAC, 2010), with firms emphasising
the ability to attract talent from across the world as
central to maintaining London’s international reputation
as a hub for trade and investment.

The importance of international migration has also been highlighted in relation to Scotland, with ministers arguing that its low
GDP growth rate can be linked to low population growth,
pointing to a need for more skilled non-EU workers.
Within the context of global economic challenges, research
indicates that UK efforts to attract international talent will
need to increase, rather than decrease, if the UK is to
maintain its position as a global hub for growth and
development (Work Foundation, 2008). This will be
particularly important in the context of growing international
competition for skills among emerging super-powers such
as China, Brazil and India, and other high-income
countries such as Germany and Italy (NEF, 2010).

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