The prestigious annual IMD World Talent Ranking assesses the methods countries use to attract and retain the talent their businesses need to thrive.
Europe continues to dominate the 2017 list, with 11 out of the 15 most talent competitive economies based on the continent, after a strong performance in 2016. Switzerland, Denmark and Belgium remain the most competitive countries in the 2017 IMD World Talent Ranking.
Austria, Finland, the Netherlands, Norway, Germany, Sweden and Luxembourg make up the top-ten.
The study draws on an in-depth survey of thousands of executives from 63 different economies, and more than two decades' data from the IMD World Competitiveness Center.
The IMD World Talent Ranking is based on countries' performance in three main categories - investment and development, appeal and readiness. The three categories assess how countries perform in a wide range of areas. These include education, apprenticeships, workplace training, language skills, cost of living, quality of life, remuneration and tax rates.
It is, according to a statement released by the Rankings, European countries' outstanding education systems that set them apart from the rest of the pack.
Europe's high level of investment in education
On average, each European country has a high level of investment in education accompanied by a superior-quality educational system, from primary to tertiary levels. This allows them to develop local talent and at the same time attract foreign, highly-skilled professionals, which many European businesses rely upon to perform.
European economies perform well in all three talent components of the ranking - appeal, readiness, and investment and development.
The research suggests Germany, Europe's economic powerhouse, continues to play a starring role in sustaining the continent's talent competitiveness.
"Germany is one of the largest exporters of talent and the country also attracts talent from across the world. Despite criticism from some quarters surrounding immigration, Germany's policies sustain its access to the international talent pool. However, with the European crisis still taking its toll on the German economy, the country has slightly decreased its total expenditure on public education," said Arturo Bris, Director of the IMD World Competitiveness Center.
While the Nordic countries perform well in some areas, they slightly lag behind other economies in terms of their appeal to foreign workers.
"Fundamentally, the Nordic economies have a very high quality of life, extremely good educational systems, and massive investment by the public sector in education. At the same time, the Nordic countries remain difficult for foreign talent, mainly due to the high cost of living," Arturo Bris said.
USA is ranked 16th
Meanwhile, according to the ranking, USA (16th) risks losing some of its global competitiveness if it does not increase investment in public education.
On average, the USA invests less in developing local talent when compared with its peers on the global stage. However, the USA has outperformed most other countries when it comes to appealing to foreign talent through quality of life, opportunities for career advancement and a high level of remuneration.
In IMD World Talent Rankings 2017, among the BRICS countries, South Africa must increase its investment in developing local talent if it is to deliver the high-quality workforce its businesses need to thrive.
Among the BRICS countries, South Africa ranks in the middle position - 48th - performing better than India (51st) and Brazil (52nd) but lagging behind both China (40th) and Russia (43rd).
South Africa's strengths are in total expenditure on education (4th), cost-of-living index (1st), personal income tax rate (2nd) and labor force growth (7th).
Its main weaknesses are in the pupil-teacher ratio (primary education, 61st), implementation of apprenticeships (61st), availability of skilled labor (60th), capacity of the educational system to meet the talent needs of the economy (60th) and emphasis assigned to science in schools (60th).
The top economies in the IMD World Talent Ranking share similar attractiveness indicators. They invest significantly in their outstanding educational systems, they offer a superior quality of life, and they offer substantial opportunities for career advancement throughout the entire professional life span.
(With Inputs from PTI)
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