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The Truth Behind Asia’s Talent Markets

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You’ll never hear me contesting the idea that Asian talent markets are ripe to be the major force in the world economy.  After all, when you have half the world’s population, it’s just logical to think you should eventually command half the world’s senior talent.  However, decades of cultural and infrastructure problems plague them as they struggle to catch up and create market conditions that allow them to produce the volume of talent they are capable of.

Demography will also play a big role, especially as labour forces in both China and Japan shrink over the next two decades. This means, for instance, that the already difficult job of finding creative software-engineers will become ever harder in northern Asia, which in turn will increase demand for staff in India and other markets where demographic problems do not exist.

But that only points to an even bigger threat which may take a generation to fix: education. In much of South-East Asia most people are educated only to the age of 12. More than half of the women in India are illiterate. Nearly two-thirds of the children in government primary schools in India cannot read a simple story. Half cannot solve simple numerical problems.

China’s educational difficulties are different—and often linked to the country’s history. Universities were closed during the Cultural Revolution and few well-educated people entered the workforce for over a decade. This has resulted in a lost generation of business people between the ages of 50 and 60, exactly the age group from where many of China’s corporate leaders should be drawn today.   ((  August 16, 2007.  “Capturing Talent.”  Retrieved from on September 10, 2007.))

I go back to an old argument of mine that India is the best positioned Asian economy, far ahead of China.  Japan’s culture and their investments have made them a global economic power, but India’s English language capabilities and their better educational infrastructure is a major advantage.  Add that they seem to have a major head start in developing knowledge industries in technology and services (call centers) and it looks quite promising.

China seems to have all of the cultural, infrastructure and now QA issues that India did not.  The tip of the iceberg is a lacking in educational infrastructure, the unseen portions of the iceberg is in the culture.

  • China is even suffering from something of a brain drain. In recent years the Chinese have been able to travel abroad more freely to study and acquire skills. But many do not return.
  • Factories in southern China now plan for a 4% loss of staff just in the week immediately after Chinese New Year, because people seem to like to start the new year with a new job.
  • As well as excessive wage inflation there is also “title inflation” and “responsibility inflation”. Relatively inexperienced local managers are sometimes given ever-grander titles—much to the chagrin of their counterparts from Europe and America, who can find themselves sitting beside much less able and more junior colleagues described as “Senior Executive Vice President” or “Regional Chairman”. But these honours are handed out for a reason: many employers in Asia have found that awarding new titles to employees every 18 months or so can be a good way to keep them.  ((Ibid))

I’d also suggest without any proof that there is a cultural component to the quality assurance issues coming out of China.  There is such a large emphasis of profits and a careless disregard for quality in comparison that their current export troubles will continue for some time.

Asian economies will get there, I have no doubt.  However, they may have years and in some cases decades of infrastructure development and cultural change to manage before they really threaten western economies for leadership in innovation.  Obviously Japan has been there for a long time, and I think India is next, but China and the rest are a long ways off.

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