Labour and skill shortages are increasingly becoming a major concern for corporate managers. Attracting and retaining talent is seen as a key success factor for companies and countries alike. Across Europe, there are several approaches used to achieve this.

The UK has been able to consistently attract top talent due to world-class academic institutions such as in the ‘Golden Triangle’ of London, Oxford and Cambridge. But attracting the best and brightest from abroad also always involves navigating immigration procedures, the potential for domestic backlash, and increasingly fierce global competition. Developing home-grown talent — a policy favoured by many European countries — is thus becoming an ever more attractive alternative.

Take Germany, and its long-standing tradition of developing its own workforce. Virtually tuition-free higher education allows individuals from all sections of society to pursue university degrees. It is, however, Germany’s renowned vocational, dual-education system, which combines theory with practical training, that produces a highly skilled workforce. The same could be said for Switzerland.

Close collaboration between schools and businesses ensures that these countries end up with staff whose skills are perfectly tailored to companies’ needs — something that even convinced Apple CEO Tim Cook. He expressly stated that the talent he found in Munich was is the reason behind Apple’s latest major investment in Germany.

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Similarly, the Scandinavians are placing greater emphasis on education. Finland’s highly regarded education system allows it to consistently top global rankings, and is a prime example of a country successfully nurturing home-grown talent. However, this comes at a cost: Finland, Sweden and Denmark all spend between 6–8% of their gross domestic product on education. In exchange, they get a world-class workforce, whose very existence attracts foreign investment in R&D and high-tech sectors, making them highly innovative and competitive economies.

These countries prioritise education and talent development within their own borders. Their unique mix of sustained substantial investment in education, and close collaboration between academia and industry, provides them with a skilled workforce. That is a key ingredient in high-value-added industries, and is one that is less likely to ‘up-sticks’ and move than the highly mobile and highly skilled mercenary workforce of the past. Domestic talent programs are better suited to ensuring the longevity of highly skilled workforces needed in the modern economy.

Martin Kaspar is head of business development at a German Mittelstand company in the automotive industry.

E-mail: martin.georg.kaspar@googlemail.com

This article first appeared in the June/July 2023 print edition of fDi Intelligence