Description
Case Studies on Knowledge Workers and the Expanding European Union - A Lesson for North America, Knowledge workers are workers whose main capital is knowledge. Typical examples may include software engineers, architects, engineers, scientists and lawyers, because they "think for a living".
Case Studies on Knowledge Workers and the Expanding European Union - A Lesson for North America
Dr. Matthew Jelavic, F.CIM As society moves, or indeed has moved, from the 'industrial age' into the 'information age', knowledge assets and knowledge workers are becoming an everincreasing competitive advantage and prime facilitator behind the competitive success of global organizations. A contributing socio-economic factor to cross-cultural knowledge management is the phenomena of globalization. Generally defined as the convergence of living standards, income levels and consumption patterns between industrialized and industrializing countries, globalization increases the interdependence of these countries (Dunning & Narula, 1997). As the free market functions without interference, governments develop agreements that remove barriers that prevent the free movement of goods, services, people, capital and organizations across borders. Examples of such agreements are the North American Free Trade Association (NAFTA) and the European Economic Area (EEA) that promote and simplify these transactions amongst the signatories. Globalization also allows multinational organizations to capitalize on the availability of specific competencies from different geographical locations and increase overall capabilities (Borghoff & Pareschi, 1998). The expanding European Union (EU) may be viewed as a regional microcosm of worldwide globalization. The Central and Eastern European Countries (CEECs) that have recently joined the EU can be viewed as a collective opportunity for foreign direct investment (FDI) with specific focus on the existing highly skilled workforce and low-cost labour pool. Globalization, however, is not without its challenges. A prime example of the drawbacks with interdependence of nations was the Global Financial Crisis that struck with the initial collapse of the American mortgage industry in 2008. The ramifications became immediately apparent on a global scale with the paralysis of the credit markets. Government financial aid packages soon became the topic of media outlets throughout the world. Had global markets not been so intrinsically intertwined, the fallout from this crisis may not have spread so quickly or been felt so deeply within national economies. The CEECs faced in 2009 the worst economic hardship since the collapse of communism two decades previous with capital leaving the region and declines in employment ("Crisis Spurs", 2009). The CEECs were looking towards the EU-15 for financial aid, which has been met with extreme reluctance ("Angela Merkel", 2009). The economic and political interdependence of the CEECs with the EU-15 has both advantages and drawbacks to both regions. As knowledge workers are sought by industries within the highly developed countries, less developed countries are placed in a disadvantaged position to
compete within the same arena. Such is the case in the expanded EU where new-member CEEC states are in a position to suffer a knowledge worker brain drain to the more economically developed countries in Western Europe. With initial investments made in education and training, there is a potential that new-member CEEC states are subsidizing more economically developed regions at their expense. This results in the net diminishment of the human knowledge capital in a distinct region. Although globalization has largely removed barriers to international trade and capital mobility, labour markets continue to be tightly regulated within the EU (Boeri & Brücker, 2005; Faini, DeMelo & Zimmermann, 1999). The EU still has significant migratory and work restrictions on the population of new member states. Within the North American continent the United States, Canada and Mexico form a free-trade association (NAFTA). The predominant focus of media outlets is the outflow of low-skilled workers from Mexico into the United States and, to a lesser extent, Canada. Rarely is mention made of the potential for Mexico to lose its skilled workforce and knowledge workers to the rest of North America if migratory restrictions are removed in a future more politically unified North American union. This Mexican brain drain can indeed mimic the CEEC brain drain into the EU-15. The original forecast for immigration from the CEECs was 13,000 to 15,000 migrants a year; whilst as of August 2006 the United Kingdom Home Office issued 427,095 work permits, almost two-thirds from Poland (Cowell, 2006; Hutton &Donaldson, 2006). This type of added migration has placed a tremendous strain upon the United Kingdom's ability to accommodate such an influx. Migration of physicians from Poland had increased drastically since that country's ascension to the EU; 19 Polish physicians were registered in the United Kingdom in 2002, with 744 registered in 2004 (Vella, 2007). The prospect of brain drain and a physician shortage in Poland is likely with 30,000 workers leaving the country every month - most of them well-educated (Hundley, 2006). The Czech Republic is another significant exporter of physicians to the United Kingdom (Vella, 2007). The Prime Minister of the United Kingdom has publicly stated that the government would attempt to restrict immigrants from any future national entrants to the EU ("Europe: TheTrouble with Migrants," 2007). This was a statement about immigration in general and not specific to skilled or unskilled persons, however, the perception on the value of immigration into the United Kingdom from the CEECs is in a delicate balance that could affect issues surrounding future EU expansion towards the east ("Leaders: Fear of Foreigners," 2007). So, does the brain drain exist in the Mexican to United States relationship? One study found that "79% of all
science students that the Mexican government funds to study in the USA never return to work in Mexico" (Carreon, 2004). Another study postulated that the migration of Mexican doctoral degree holders into the United States is associated with a scarcity of employment and lack of infrastructure to match the academic level of the migrants (Licea de Arenas, Castaños-Lomnitz, Valles, González, & Arenas-Licea, 2001). Although geographically in close proximity to the United States, and with the potential for freedom of movement in the future, the possibility of the Mexican brain drain affecting Canada is quite real. Conversely, with continued barriers withdrawn during the globalization process, how to protect less developed countries in the process is left for discussion and consideration.
REFERENCES Angela Merkel Rejects Bailout Plan for Eastern European Nations. (2009, March 1). Huffington Post Boeri, T., & Brücker, H. (2005). Why are Europeans so tough on migrants? Economic Policy, Qctober. S29 - 703. Borghoff, U. M.,& Pareschi, R. (1998). Information technology for knowledge management. London: Springer. Carreon, H. (2004, January 23), The Great Mexico Brain Drain: The other face of Mexican immigration. Retrieved December 28, 2009, from http:/Avww.aztlan.net/mexico brain drain.htm. Cowell, A. (2006, August 23). Migration of eastern Europeans to Britain soars beyond estimates. The i\lew York Times, p. A5. Crisis Spurs Call for Bigger Bailouts. (2009, February 23). Journal. Wallstreet
Dunning, J. H.,& Narula, R. (1997). Developing countries versus multinationals in a globalising world: The dangers of falling behind. In P. Buckley, S P. Ghauri (Eds.), Multinational enterprises and emerging markets: Managing increasing interdependence (pp. 467 - 488). London: Dryden Press. Europe: The trouble with migrants; Europe and immigration. (2007, November 24). The Economist. 385(8555), p. 45. Faini, R., DeMelo, J., & Zimmermann, K. F. (1999). Migration: The controversies and the evidence. Cambridge: Cambridge University Press. Hundley, T (2006, February 19). Poland may soon need those plumbers: Many of the country's best and brightest are flowing to Western Europe and beyond, and some fear a brain drain could be evident soon. Knight Bidder Tribune Business Nev
Case Studies on Knowledge Workers and the Expanding European Union - A Lesson for North America, Knowledge workers are workers whose main capital is knowledge. Typical examples may include software engineers, architects, engineers, scientists and lawyers, because they "think for a living".
Case Studies on Knowledge Workers and the Expanding European Union - A Lesson for North America
Dr. Matthew Jelavic, F.CIM As society moves, or indeed has moved, from the 'industrial age' into the 'information age', knowledge assets and knowledge workers are becoming an everincreasing competitive advantage and prime facilitator behind the competitive success of global organizations. A contributing socio-economic factor to cross-cultural knowledge management is the phenomena of globalization. Generally defined as the convergence of living standards, income levels and consumption patterns between industrialized and industrializing countries, globalization increases the interdependence of these countries (Dunning & Narula, 1997). As the free market functions without interference, governments develop agreements that remove barriers that prevent the free movement of goods, services, people, capital and organizations across borders. Examples of such agreements are the North American Free Trade Association (NAFTA) and the European Economic Area (EEA) that promote and simplify these transactions amongst the signatories. Globalization also allows multinational organizations to capitalize on the availability of specific competencies from different geographical locations and increase overall capabilities (Borghoff & Pareschi, 1998). The expanding European Union (EU) may be viewed as a regional microcosm of worldwide globalization. The Central and Eastern European Countries (CEECs) that have recently joined the EU can be viewed as a collective opportunity for foreign direct investment (FDI) with specific focus on the existing highly skilled workforce and low-cost labour pool. Globalization, however, is not without its challenges. A prime example of the drawbacks with interdependence of nations was the Global Financial Crisis that struck with the initial collapse of the American mortgage industry in 2008. The ramifications became immediately apparent on a global scale with the paralysis of the credit markets. Government financial aid packages soon became the topic of media outlets throughout the world. Had global markets not been so intrinsically intertwined, the fallout from this crisis may not have spread so quickly or been felt so deeply within national economies. The CEECs faced in 2009 the worst economic hardship since the collapse of communism two decades previous with capital leaving the region and declines in employment ("Crisis Spurs", 2009). The CEECs were looking towards the EU-15 for financial aid, which has been met with extreme reluctance ("Angela Merkel", 2009). The economic and political interdependence of the CEECs with the EU-15 has both advantages and drawbacks to both regions. As knowledge workers are sought by industries within the highly developed countries, less developed countries are placed in a disadvantaged position to
compete within the same arena. Such is the case in the expanded EU where new-member CEEC states are in a position to suffer a knowledge worker brain drain to the more economically developed countries in Western Europe. With initial investments made in education and training, there is a potential that new-member CEEC states are subsidizing more economically developed regions at their expense. This results in the net diminishment of the human knowledge capital in a distinct region. Although globalization has largely removed barriers to international trade and capital mobility, labour markets continue to be tightly regulated within the EU (Boeri & Brücker, 2005; Faini, DeMelo & Zimmermann, 1999). The EU still has significant migratory and work restrictions on the population of new member states. Within the North American continent the United States, Canada and Mexico form a free-trade association (NAFTA). The predominant focus of media outlets is the outflow of low-skilled workers from Mexico into the United States and, to a lesser extent, Canada. Rarely is mention made of the potential for Mexico to lose its skilled workforce and knowledge workers to the rest of North America if migratory restrictions are removed in a future more politically unified North American union. This Mexican brain drain can indeed mimic the CEEC brain drain into the EU-15. The original forecast for immigration from the CEECs was 13,000 to 15,000 migrants a year; whilst as of August 2006 the United Kingdom Home Office issued 427,095 work permits, almost two-thirds from Poland (Cowell, 2006; Hutton &Donaldson, 2006). This type of added migration has placed a tremendous strain upon the United Kingdom's ability to accommodate such an influx. Migration of physicians from Poland had increased drastically since that country's ascension to the EU; 19 Polish physicians were registered in the United Kingdom in 2002, with 744 registered in 2004 (Vella, 2007). The prospect of brain drain and a physician shortage in Poland is likely with 30,000 workers leaving the country every month - most of them well-educated (Hundley, 2006). The Czech Republic is another significant exporter of physicians to the United Kingdom (Vella, 2007). The Prime Minister of the United Kingdom has publicly stated that the government would attempt to restrict immigrants from any future national entrants to the EU ("Europe: TheTrouble with Migrants," 2007). This was a statement about immigration in general and not specific to skilled or unskilled persons, however, the perception on the value of immigration into the United Kingdom from the CEECs is in a delicate balance that could affect issues surrounding future EU expansion towards the east ("Leaders: Fear of Foreigners," 2007). So, does the brain drain exist in the Mexican to United States relationship? One study found that "79% of all
science students that the Mexican government funds to study in the USA never return to work in Mexico" (Carreon, 2004). Another study postulated that the migration of Mexican doctoral degree holders into the United States is associated with a scarcity of employment and lack of infrastructure to match the academic level of the migrants (Licea de Arenas, Castaños-Lomnitz, Valles, González, & Arenas-Licea, 2001). Although geographically in close proximity to the United States, and with the potential for freedom of movement in the future, the possibility of the Mexican brain drain affecting Canada is quite real. Conversely, with continued barriers withdrawn during the globalization process, how to protect less developed countries in the process is left for discussion and consideration.
REFERENCES Angela Merkel Rejects Bailout Plan for Eastern European Nations. (2009, March 1). Huffington Post Boeri, T., & Brücker, H. (2005). Why are Europeans so tough on migrants? Economic Policy, Qctober. S29 - 703. Borghoff, U. M.,& Pareschi, R. (1998). Information technology for knowledge management. London: Springer. Carreon, H. (2004, January 23), The Great Mexico Brain Drain: The other face of Mexican immigration. Retrieved December 28, 2009, from http:/Avww.aztlan.net/mexico brain drain.htm. Cowell, A. (2006, August 23). Migration of eastern Europeans to Britain soars beyond estimates. The i\lew York Times, p. A5. Crisis Spurs Call for Bigger Bailouts. (2009, February 23). Journal. Wallstreet
Dunning, J. H.,& Narula, R. (1997). Developing countries versus multinationals in a globalising world: The dangers of falling behind. In P. Buckley, S P. Ghauri (Eds.), Multinational enterprises and emerging markets: Managing increasing interdependence (pp. 467 - 488). London: Dryden Press. Europe: The trouble with migrants; Europe and immigration. (2007, November 24). The Economist. 385(8555), p. 45. Faini, R., DeMelo, J., & Zimmermann, K. F. (1999). Migration: The controversies and the evidence. Cambridge: Cambridge University Press. Hundley, T (2006, February 19). Poland may soon need those plumbers: Many of the country's best and brightest are flowing to Western Europe and beyond, and some fear a brain drain could be evident soon. Knight Bidder Tribune Business Nev