This article originally appeared in the November 2018 edition of Mobility Magazine.
“Knowledge is an antidote to fear.” — Ralph Waldo Emerson
2018 marks the beginning of a new era in global talent mobility. It is widely anticipated that Industry 4.0 will create massive growth and productivity and will change the global flow of goods and services. Along with Industry 4.0 comes our own Mobility 4.0—not only the convergence of technological innovation on the workforce, but also the narrowing and redefinition of immigration talent profiles and integrated tax compliance.
This three-part series discusses the impact of Mobility 4.0 on the realm of global talent mobility.
Industry 4.0 (or 4IR) is a name for the current trend of automation and data exchange in manufacturing technologies. This Fourth Industrial Revolution is set to change everything from supply chain management to talent management, and it will thereby affect the future of global mobility and immigration.
Nine technologies are included within 4IR: autonomous robots, additive manufacturing (3D printing), horizontal/vertical system integration, augmented reality, the cloud, cybersecurity, simulation, industrial internet of things, and big data/analytics.
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It is predicted that with 4IR, manufacturing will become more flexible, with multiple products built on a local made-to-order basis. A new era of globalization will change trade flows from global to regional. Manufactured products will no longer need to travel great distances to reach the consumer, as they will be manufactured locally. This will lead to more productivity and growth for businesses, but it will also require massive retraining of the workforce.
Furthermore, this change is expected to have a greater impact on developing economies and less on emerging ones. While in recent history multinational enterprises in developed economies have expanded globally to save on labor costs, the costs in emerging economies have risen. Thus, it will become more affordable for companies to manufacture closer to domestic consumers.
We predict that the impact of 4IR on the global workforce will include a redefinition of jobs, of talent profiles and desired skills, of job activities, and of education and training. Subsequently, there will also be a redefinition of tax and immigration regulations in response to evolving national interests and changing talent pools.
Job loss through automation will decrease the need for low-skilled labor, whether local or foreign. However, creation of new high-tech jobs, combined with increased domestic manufacturing, will increase the demand for highly skilled STEM talent, whether local or foreign.
Keep in mind that 4IR is a global phenomenon. All countries are seeking to attract and retain highly skilled STEM talent and will adjust compensation, benefits, and immigration and tax regulations accordingly. Thus, with new job creation and new job skills, it will become increasingly difficult for businesses to find qualified talent and for talent to gain the relevant education, training, and experience.
Where talent is scarce, artificial intelligence (AI) might step in. For example, Google’s AutoML machine learning tools can create better code than human researchers. One reason given for AutoML’s development was as “a solution to the lack of top-notch talent in AI programming. There aren’t enough cutting-edge developers to keep up with demand.”
The global demand for talent to power and drive technological innovation means more countries will specifically require proof of the actual contribution foreign talent will bring to their shores. Some examples of AI’s impact on a multinational entity’s relocation of global talent are:
Industry 4.0 will transform the ways in which countries measure their growth and productivity, and create jobs yet unknown. As Forbes rightly recognizes, now is the time for MNEs and their global mobility partners to prioritize together from where to source talent and carefully select where to relocate talent.
Utilization of AI in HR, such as cognitive talent systems, is a good start to help assess sources of existing or needed skills and talents (e.g., an employee’s personality traits, emotional intelligence, specific academic and professional expertise, ability to measure behavioral response to new technologies). Working with global mobility and tax professionals, HR should understand the profile of countries whose immigration and labor laws specifically welcome this profile of talent and whether those activities would create a tax nexus for the organization. Many countries are moving beyond the “Old World” model of admitting entry- to midlevel management assignees. More countries are admitting foreign talent that is clearly qualified and can demonstrate cognitive skills to drive innovation for a company’s core and future business lines and/or foreign nationals who can show evidence that their vision or idea can be capitalized, thus creating new streams of revenue and, in turn, generating new taxes.
This is no longer a nice term describing how to make something better. During the past decade, “disruption” has defined our beginnings in Industry 4.0. For today’s global mobility professionals, the next two decades will bring a redefinition of global talent as AI is used to augment certain tasks to amplify and change human cognition (i.e., the way in which humans experience things and think). During the next decade, this will mean that MNEs will battle startups, venture capitalists, and nation-states keen on capitalizing their own intellectual property (IP), implementing new supply chains, and aggressively building talents and skills to produce “revolutionary” products and “transformative” services.
After a quarter-decade of “borderless” business and “business-friendly” immigration and tax policies, we are now in a world of sociopolitical conservatism that promises to better protect national borders, advance nationalist economic interests, and more accurately collect tax revenue from multiple sources. The movement of human talent has always been a nexus of tax revenue, the combination of digital border enforcement technologies, online work and residence permit platforms, and “trusted” corporate sponsor requirements. Now both MNEs and assignees will be operating under an array of “15 Actions” created by the OECD BEPS project.
Of course, numerous other factors will alter the course of our global community of talent and will redefine how businesses attract and utilize that talent. Once AI truly begins to augment and amplify talent, it will create a new ecosystem of high-value work that will be taxed. It will be interesting to see what impact this will have on the future generation of mobility.
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According to the World Economic Forum, “creative” skills will be in high demand by 2020 in order to adapt to new technologies and ways of working. Data analysis by AI will slowly replace human interpersonal skills such as negotiation and active listening for certain business decision-making. Innovation and cutting-edge skills, along with entrepreneurship, are the talents of tomorrow, and many countries are changing their immigration regulations to accommodate the new profiles of 4IR talent.
Read the rest of this article in the November 2018 edition of Mobility Magazine.