Global Talent Competitiveness Index (GTCI) Hungary - Country Brief

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1 R A N K I N G Talent Competitiveness Index (GTCI) Country Brief TOTAL POPULATION: GDP (PPP): 9.89 MILLIONS US $ BILLIONS GDP PER CAPITA (PPP): US $23, (41 OUT OF 109 COUNTRIES) COUNTRY INCOME LEVEL: HIGH INCOME GTCI RANKING: 31TH (OUT OF 109) GTCI Position s ranking in the GTCI sample of 109 countries is the position 31 (Figure 1). ranks relatively better in the pillar of skills; by contrast, the country is lagging behind in terms of growing its pool of talent (and also attracting talent). Figure 1: global ranking (GTCI sample of 109 countries) 1 GTCI Enable Attract Grow Comparison with different groups of countries belongs to Europe (region) and is classified as a high-income country. 1 Its relative ranking position is better within Europe (46 percent of countries in this group rank lower, as shown in Figure 2) than within the group of highincome countries (37 percent of countries rank lower). The reason is that there are some countries in Europe that are 1 The definitions of regions and also of income groups are both based on the World Bank s classification (the classification of income groups is updated to July 2013). 1

2 not classified as high-income countries and which often perform worse in terms of talent. Yet, the score gap of is similar within Europe and within the high-income group of countries (this is because some of the top countries in Europe, such as Switzerland, also lead the ranking in the group of high-income countries). When compared to other regions beyond Europe and North America, compares favourably. In particular, ranks higher than any country in Central and Southern Asia, Sub-Saharan Africa and Latin, Central America and Caribbean. By contrast, is at threat of being left behind by other regions, such as the East, Southeastern Asia and Oceania region. Figure 2: GTCI performance vs. groups of countries Comparison Group Top 3 scores of the group Score GAP: score minus group highest score % of countries in the group ranked below (by Region) Central and Southern Asia Kazakhstan, Kyrgyzstan, Sri Lanka % East, Southeastern Asia and Oceania Singapore, New Zealand, Australia % Europe Switzerland, Luxembourg, Denmark % Latin, Central America and Caribbean Chile, Barbados, Costa Rica % Northern America United States, Canada % North Africa and Western Asia United Arab Emirates, Qatar, Israel % Sub-Saharan Africa South Africa, Botswana, Namibia % (by Income Group) High-income countries Switzerland, Singapore, Luxembourg % Upper-middle-income countries Malaysia, Costa Rica, Bulgaria % Lower-middle-income countries Philippines, Georgia, Armenia % Note: The category low income countries was not included. Few countries in the GTCI sample belong to it. The Group of competitors s group of competitors is defined as those countries in the GTCI sample that are located in Eastern and Southern Europe. This group consists of 12 countries. Figure 3 compares their GTCI score together with their GDP per capita and population size. Based on the level of GDP per capita and the size of the country population, Czech Republic is perhaps the closest competitor (which has a higher score than ). outperforms large economies such Italy and Spain. 2

3 GTCI Score Figure 3: GTCI score vs. the group of competitors Czech Republic Bulgaria Poland Slovakia Slovenia Portugal Spain Italy 45 Croatia Greece Romania GDP per capita (US$ PPP) Note: the size of the bubble indicates the size of the country population Performance across Pillars In general, is in accordance with the average performance of the European region, but performs slightly worse with respect to the average performance of high-income countries (Figure 4). performs the poorest on the pillar of Grow. Figure 4: pillar scores vs. relevant comparison groups 100 Enablers 20 0 Attract 100 Enablers 20 0 Attract Grow Grow Europe High Income 3

4 The largest gap of with respect to the top countries is in the pillar Grow (Figure 5). can also improve in Attract. could learn lessons from some of its regional peers. Czech Republic could offer some best practices for developing domestic talent particularly vocational skills. Countries like Switzerland may offer lessons in terms of attracting and retaining talent. Figure 5: assessment by pillar vs. countries with best practices Top 3 with highest score (whole GTCI country sample) Overall pillar Gap: pillar score minus highest pillar score Enable Switzerland, Singapore, Denmark Attract Singapore, Australia, Luxembourg Grow Netherlands, Denmark, United States Switzerland, Luxembourg, United Arab Emirates (LV) skills Czech Republic, Slovakia, Austria (GK) skills Luxembourg, Singapore, United States Best 3 of competitors Competitors Gap: pillar score minus best competitor pillar score Czech Republic, Poland, Portugal Portugal, Spain, Czech Republic Portugal, Spain, Czech Republic Czech Republic, Portugal, Slovenia Czech Republic, Slovakia, Poland Slovenia, Czech Republic, Slovakia External Openness and Talent Attraction International mobility of skilled people involves two forces: (i) attracting talent i.e. the pull factor; and (ii) retaining talent. Three GTCI sub-pillars focus especially on measuring the extent of these forces: External Openness measures the extent to which countries attract foreign businesses and people via international migration; the sub-pillars Sustainability and Lifestyle together measure living standards that motivate people to live in a certain location. The former focuses on pay and other work-related benefits. The latter refers to things like the environment, sanitation and safety. Success on these dimensions, in combination with the Grow pillar, is measured by the final pool of skills available in the country (e.g. technical professions, knowledge workers, etc.) and by how this pool of people enhances productivity, innovation and entrepreneurship. Figure 6: Ranking and Score Gap in Selected components Belongs to Pillar: ranking in each component (out of 109 countries) Top 3 with highest score (whole GTCI country sample) Score Gap: component score minus highest component score External Openness Attract 58 United Arab Emirates, Singapore, Luxembourg Sustainability 28 United Arab Emirates, Luxembourg, Switzerland Lifestyle 39 Austria, Qatar, Switzerland Employable (vocational) skills LV Skills 7 Czech Republic, Slovakia, Austria Higher skills and competencies Gk Skills 32 United States, Israel, Singapore Innovation and entrepreneurship Gk Skills 26 Malta, Luxembourg, China

5 relatively poor performance in the pillars Grow and Attract means that the country may suffer into the future to maintain a competitive pool of talent even though the current pool of vocational skills is very good. is lagging behind in terms of the sub-pillar of External Openness i.e. its capacity to attract foreign businesses and people via international migration. Foreign Direct Investments and technology transfers are adequate but the best global skills are not coming to work and innovate in the country even though Lifestyle and Sustainability are good. can thus improve the access to Skills and also do better in translating the use of skills into Innovation and Entrepreneurial activities (the United Kingdom can be a good reference in both areas). This would be facilitated by attracting more high skills from around the globe. We are in an era of brain circulation: talent is increasingly mobile, and mobility is becoming part of talent development. A short-term view of the cost of immigration must be counterbalanced by a disaggregated view that distinguishes low and high skilled migration and by a longer-term evaluation of the benefits of the international mobility of high skills. To attract the best talent, below are some actionable recommendations for nations and cities and also for corporations. NATIONAL LEVEL: Countries - as well as cities and regions that are becoming increasingly important players in the global talent scene have to become more proficient at managing the emerging new dynamics of brain circulation: Countries should not take for granted that the best talent will come just by opening the valve via selective immigration policies; the best talent is attracted by opportunity, which is driven by well-developed clusters, knowledge networks and professionalized management practices within organizations favoring performance and employee development. Higher education must be used as a way of attracting young people with high potential from around the world. This boils down to establishing a merit-based university system rewarding scientific achievement for its professors and a rigorous-but-fair process of student admission that will attract both students and researchers from abroad, as well as the home country. Cities can differentiate themselves through local capabilities and branding those capabilities globally, including agile responses to market opportunities for innovation. Countries, especially in emerging markets, should also focus on developing local vocational skills and infrastructure that will both provide opportunity for their citizens and act as a magnet to their creative talent pool abroad. Levering the talent pool abroad requires: (1) engaging Diasporas - a big source of knowledge, networks and resources; and (2) promoting a business culture that rewards merit and facilitates career upward mobility in order to lure back talented émigrés and foreign talent alike. Local business leaders who have benefitted from an education abroad may play an important role in professionalizing management practices with a local flavor. Returnees should not necessarily be encouraged to re-assimilate their links and ties with communities abroad will be valuable sources of know-how in a fast-moving world of innovation. ORGANISATIONAL LEVEL: Multinational corporations often set the tone in terms of governance, professionalism and attention to employee development. All types of companies must pay attention to: Coaching their managers and professionals in working with people of different cultures and to developing their skills in working virtually. Making sure via good management practices that it is the merit of the person that counts. Professional management will need to be adapted to local contexts in order to attract the best global talent without disrupting local ways of working and interacting. 5