Joburg, Cape Town in top 114 cities for talent competitiveness

JOHANNESBURG — There’s some good news and bad news for Saffers when it comes to the latest Global Talent Competitiveness Index released at Davos this week. For starters, South Africa as a country has been slipping dramatically in recent years when it comes to attracting and creating competitive human resources. (SA this year ranks 71, sliding from its position in the 50s in years gone by.) But there are some rays of hope including local companies ranking high in terms of upskilling staff as well as Joburg and Cape Town making the top global 114 cities when it comes to talent competitiveness. The only problem here is that both cities rank on the lower end of this particular table – Joburg (107), Cape Town (112). And as the co-author of the index Bruno Lanvin explains in this interview, SA as a whole can rank much better if it undergoes serious labour reforms. – Gareth van Zyl

It’s a pleasure to welcome on the line Bruno Lanvin, who is the co-editor of the sixth annual Global Talent Competitiveness Index, released by business school INSEAD in partnership with Tata Communications and the Adecco Group. Bruno, thanks for taking the time to chat with me today.

Thank you.

So, you’ve released this index at the WEF in Davos this week. In a nutshell, can you tell us what it focuses on?

Well, the rankings are based on a model so, basically, we look at six different dimensions of talent, whether it has to do with growing talent, attracting talent, or retaining talent and the model is basically, composed of an input side and an output side. On the input part of the model, we look at the efforts made by countries. On the output, we look at how successful they’ve been in churning out the kind of talent an economy needs.

How do you gather the data for this Index?

So, the model is based on 68 variables. That is, we take a holistic vision of what talent is about and we track critical dimensions, such as how a country is able to grow its own talent? How it is able to attract foreign talent, and how it is able to retain such talent, whether it be domestic or international? We also look at the input side of the model at the effort made by the country in terms of creating the right business environment, which is the state of labour laws, and labour markets in the country. And on the output side, we try to see whether the country actually receives a reward for its efforts. In terms of vocational skills and in terms of what we call global knowledge skills, which are the ability for superior level talents to manage complex organisations in global and international environments.

Who are the top performing countries in this Index and what has made them stand out from the rest?

So, the top 10 this year are practically the same as the top 10 last year, which shows that there’s great stability at the top. But some elements are remarkable and one of them is that apart from Singapore (at number two) and the US (number three), the top 10 is constituted almost exclusively of European countries — Switzerland being number one — and this includes a large number of other smaller economies. Switzerland being one, Singapore is another one, but also the Scandinavian countries who are at the top, which shows that talent competitiveness is not just a dimension linked to a competitor’s eagerness to participate in the global economy, and openness to a number of currents, including trade, investment. So, that’s one of the first lessons.

The second is that emerging countries are showing their colours that we see more and more of these countries doing specific efforts around talent, and being quite successful at them. This year for the first time one emerging economy, namely the United Arab Emirates (UAE), breaks into the top 20, which is quite remarkable. In the middle of the rankings, we see large countries like India and China who are also performing above the regression line. Their talent performance is higher than what their income per capita would suggest. So, we have a number of interesting and encouraging elements. We are also concerned however that we detected this year, by looking at the longer-term time series since the creation of the Index, that the gap between the champions and the laggards is increasing rather than diminishing. This requires specific efforts and policies if we want this gap not to grow them further in the future.

Now, there’s also a special note in the Index on SA and Brazil, two big emerging markets, Brazil obviously, the much bigger one. They’ve both fallen down the rankings but what is the significance of that, especially in light of these countries being part of the so-called BRICS players?

Yes, among the BRICS, SA and Russia are the two who are showing a decrease in performance. It’s particularly bad for SA, which was in the 50s, and now it goes down to 71st. Russia has a problem with attracting talent. SA has more of a problem with retaining talent. SA scores well when it comes to growing talent. It has excellent universities, with a good international reputation, whether we look at Stellenbosch or universities in Cape Town, Pretoria, and Johannesburg – these are known, so these churn out good talent. There are two issues in SA that really affects it in the index. One is that some of the skills produced by the education formal sector are not necessarily adapted to the needs of the economy. In other words, there are still gaps on the labour market, which are not in the areas where these universities produce more graduates. The second one revolves around a number of perceptions around SA, especially around the rule of law, eagerness to fight corruption, the ability to access services, personal safety in large cities is also diminishing the talent performance of SA, and its ability to retain talent.

In your report, you also focus on cities and how cities are, in fact, competing with countries for talent. Can you explain that as well?

We didn’t say that cities are competing with countries but our formulation is that more and more cities are taking global wealth that used to be the exclusive privilege of the nation-state. It’s been very clear, for instance, after the Paris conference, that some large countries like the US started to negate some of the commitments they had made about climate change. Some cities in the US and elsewhere took the baton and decided that this was a priority and something they wanted to contribute to. We see that as well in the area of talent. We’ve seen now that in large countries, such as SA, when you ask people are you ready to come and accompany our efforts to develop our markets and that, or in this country or that country? 20-Years ago, people would say yes or no, or ask about the package. Now, they say, where are you sending me to in SA? Is it to CT, or Pretoria, is it Durban or Johannesburg? The same thing for China, for India, and even for the US. So, we have this personality of cities that is emerging very strongly. Cities are proving more agile in many ways. So, we see a number of dynamics in the level of cities, which we think is going to grow in the years to come and more and more of the talent strategy will be geared to cities, even more than to countries.

I just want to get your quick comments on where Johannesburg and Cape Town feature in that Index that you’ve put out because I think both cities are lower down on the city’s Index that you’ve got there?

Definitely, we have 114 cities this year and Johannesburg is 107th and Cape Town is 112th so both are very bottom of the ranking. The good news is that they are part of the ranking so that is when we look at the top 112 cities around the world, they come up. That means there’s a ground for large SA cities. People think about them in terms of relocating, in terms of having activities or investments so that’s good news. The bad news is that the ranking is probably much lower than what the potential is for cities like Cape Town and Johannesburg. It’s interesting to see where they score relatively well. For instance, Cape Town scores well when it comes to having recognised universities, being an intellectual and cultural centre. Johannesburg has a good ground in terms of a good place for business, not only national business but international businesses. There are a few elements, which are the routes of future success and things can be built around that.

Buildings stand in the Central Business District (CBD) on the city skyline seen from the Sandton district of Johannesburg. Photographer: Waldo Swiegers/Bloomberg

The efforts to be made have to do with the other characteristics that the Index points out. That is in particular personal safety. There is also a few others that have to do with the city management and access to procurement, to public tenders, etc. These are things we see in the different exercises we have discussing with business. There are those operating already in SA and those who are considering the possibility to move some of their activities there. So, there are lessons that can be drawn from the activities of all the cities around the world, which have been tracing similar issues in terms of reputation or perception. Often the perceptions are far away from reality but this can be mitigated through a number of efforts and best practices can be identified from a number of countries around the world.

Just as a final question. Does this report traditionally get a lot of attention from the delegates, leaders, and business leaders at Davos, once they’ve left Davos? Do they take this report on board because I guess, they would be key agents of change with your report?

Definitely, this is one of the reasons why we launch there. Every year we have a theme. So, we identify the theme, typically, a year to two years before the report is issued. So, the theme for the Davos discussions is generally decided on and then shared only a few weeks or a few months before the meeting. So, we try to anticipate what would be discussed there and until now, we’ve been fairly lucky in coincidence. Last year, for instance, the theme was diversity – how more diversity and talent policies enhance competitiveness and productivity. The report we produce every year is, for us, has to be a tool for action. It is not an academic report that you would read once it gets out, and then put it on the shelf waiting for the next issue. If it is not used by decision-makers, public and private, or else it should not exist.

So, every year we measure not only the media impact but the impact that is made in the countries and the discussions that business has with governments, with regulators, that foreign investors have with local authorities, which are, for us, is the measure of success. So, you are absolutely right. The kind of crowd that gathers at Davos is our first circle of impact, but we also rely very much on further launches. We’ll be launching the report in Singapore in a few months from now. We’ll be launching in the Middle East and Dubai and Jordan, the WEF meeting for the Middle East. We have different versions launched in Russia, etc. So, there will be additional efforts to increase this impact.

Personally, I believe that SA is a place that will attract increasing interest in the field of talent. Not only because what I mentioned about the growing talent but because of the diversity we saw last year, is that being a multicultural, multilinguistic society – The Rainbow Nation, as it is known in many parts of the world. It has a big advantage to attract business that it should want to become global. It’s not just a gateway to markets in Africa. We believe it’s a gateway to many markets in the Southern Hemisphere. This is, I think, where SA has a huge potential and where education policies, and labour market reforms can help the country to seize those opportunities.

Bruno Lanvin, thank you so much for a fascinating discussion.

Thank you.