Global Talent Index: White Paper Introduction Talent is critical to Boston s economic future, and to the future of metropolitan regions around the world. The Greater Boston Chamber of Commerce, with support from outside organizations, has created the Global Talent Index to assess major regions talent pools and the innovation they foster. This white paper outlines the results of the first Global Talent Index. It measures 30 leading metropolitan regions (15 in the U.S. and 15 from countries around the world) on three metrics, combines and averages the scores to produce an overall Global Talent Index score for each region, and identifies recommendations to strengthen Boston s leadership capabilities in the worldwide talent competition. Key Takeaways Results: In the Global Talent Index, Boston ranks first among the 30 metropolitan areas that were measured, followed by London, Beijing, and San Francisco. Its strong performance in all three of the metrics that make up the Index enabled Boston to earn an overall Index score higher than the other regions. In the university academic performance metric, Boston ranks second to London. In the college degrees metric, Boston ranks fifth, with Oslo ranked first. In the patent metric, Boston ranks fourth, with Beijing ranked first. While London, Oslo, and Beijing were the top-ranked regions in their respective metrics, each of their combined scores ranked below Boston s. Recommendations: To enhance its performance in each of the three metrics, and continue to lead in the global competition for talent, Boston needs to move forward on several policy fronts. The Chamber recommends that steps be taken to strengthen local talent and local universities by expanding state support of R&D matching grants, increasing college student retention, reforming federal H-1B visa policies, and securing a federal patent office in Boston. 1 P age
I. Why Talent is Critical Of all the factors driving economic growth, none is more important than talent. Talent drives the competitiveness of metropolitan regions worldwide. With a strong pool of talent, these regions can thrive and grow. Without it, they will languish economically, with negative impacts that ripple far beyond the bottom line. Regions around the world rely upon their brainpower to compete in the global marketplace. It is this skilled workforce that sustains their economies, enabling them to develop a vibrant base of industries that conducts business across the world, while continuously evolving and adapting to changing economic trends and global market forces. Regions depend on their local education systems to develop talent. They depend on primary and secondary schools that impact every child, building skills and a sense of community. They depend on their colleges and universities, whose faculties, facilities, and quality of life attract students who will soon enter the workforce. The result is a pipeline of talent coming into the marketplace each year, armed with strong academic credentials and training gained from top institutions of science, technology, business, liberal arts, and the humanities. II. The Global Talent Index How do major regions in the U.S., and those around the world, compare as talent centers? The Global Talent Index provides an answer. It compares the 15 largest metropolitan areas in the United States and 15 major international capitals, by combining subindexes from three talentrelated metrics university academic performance, college degrees, and patents to generate an overall index and rankings. The university metric measures a region s ability to develop talent, the college degree metric measures education levels of a region s current talent pool, and the patent metric measures one of the most important outputs of a region s talent base: the ideas and innovations it generates. To compile the index, data was collected for 30 major metropolitan regions around the world (15 U.S. regions and 15 regions outside of the U.S.) U.S. regions were selected on the basis of population, with the 15 largest Metropolitan Statistical Areas in the country being included. International regions were selected on the basis of size and global prominence, resulting in the inclusion of major capitals from both the Eastern and Western Hemispheres. Data series for each of the three metrics were indexed on a scale of 1 to 100, with 100 representing the highest-performing region, to create subindex scores. For each region, the three subindex scores were averaged together to produce a Global Talent Index score, with equal weighting of the three metrics. Index scores measure the strength of, and innovation generated by, each region s talent pool. 2 P age
More details on data sources and methodology are provided in the Appendix at the end of this paper. Region Global Boston ranks first in the Global Talent Index, followed closely Talent Index by London, Beijing, and San Francisco, all of which have Score scores above 60. Boston s strong performance in each of the 1. Boston 69.93 three metrics generated its overall first-place ranking, although 2. London 3. Beijing 65.09 63.35 it did not place first in any of the three metrics. Similarly, San Francisco and Paris did not finish first in any metric but were 4. San Francisco 61.04 strong in all three categories. 5. Paris 56.60 6. Tokyo 49.62 7. New York 48.84 8. Washington, D.C. 42.11 9. Los Angeles 39.94 10. Chicago 39.91 11. Seattle 38.86 12. Stockholm 38.68 13. Oslo 37.95 14. Singapore 37.38 15. Hong Kong 35.63 16. Atlanta 33.68 17. Philadelphia 31.82 18. Berlin 30.74 19. Madrid 29.74 20. Toronto 27.67 21. Houston 26.38 22. Vancouver 23.20 23. Sydney 23.07 24. Dallas 22.67 25. Shanghai 22.47 26. Detroit 19.91 27. Phoenix 19.31 28. Miami 18.43 29. Riverside 8.79 30. Milan 8.01 These results illustrate the multidimensional nature of the role talent plays in regional economies. Regions that have a welleducated population, but are not producing patent-worthy ideas, will not score as highly in the overall Index (e.g., Oslo). Some regions were either slightly above average, average, or slightly below average on all metrics, and as such, their resulting overall talent index score is about average (e.g., Atlanta). Most regions were above average in two of the three metrics and below average in the third (e.g., Los Angeles), or were below average in two of the three metrics and above average in the third (e.g., Madrid). No region came close to a perfect 100 score, which can only be attained if a region placed first in all three metrics. But the fact that the highest score was 69.9 indicates that regions around the world can do more to strengthen their talent pools, and increase the rate of innovation that comes from skilled workers generating new ideas. Talent pools are not stagnant, but are attracted to regions that welcome and help talent flourish. The regions that will win the 21 st Century talent competition are those that do the best job of making their colleges and universities even stronger academically, developing and attracting degree holders, and accelerating the rate at which ideas are turned into patents and new companies. 3 P age
Subindex 1 University Academic Performance This metric, the collective academic performance of the universities in a region, measures each region s ability to develop talent. It utilizes data from two comprehensive studies of universities around the world, each of which ranks the top 500 institutions worldwide, using a methodology outlined in the Appendix. Universities and colleges play a powerful role in developing a region s talent pool not only by providing students with an education, but also by attracting students to the region to attend those institutions. Strong educational institutions have a secondary impact on a region s economy, as they attract private and public R&D dollars and generate new ideas Region University Academic Performance University Index 1. London 346.2 100.0 2. Boston 308.6 88.9 3. Paris 306.1 88.2 4. New York 246.7 70.7 5. Tokyo 240.8 68.9 6. Hong Kong 218.9 62.5 7. Los Angeles 193.8 55.1 8. Chicago 173.8 49.2 9. Sydney 155.4 43.8 10. Shanghai 143.1 40.1 11. Atlanta 108.9 30.0 12. Beijing 107.8 29.7 13. San Francisco 103.1 28.3 14. Singapore 96.3 26.3 15. Stockholm 94.5 25.8 16. Berlin 94.5 25.8 17. Philadelphia 94.1 25.7 18. Toronto 90.5 24.6 19. Houston 84.3 22.8 20. Vancouver 83.1 22.4 21. Milan 75.9 20.3 22. Washington, D.C. 68.6 18.1 23. Seattle 60.9 15.9 24. Oslo 45.4 11.3 25. Madrid 36.5 8.7 26. Miami 30.5 6.9 27. Phoenix 30.5 6.9 28. Riverside 27.4 6.0 29. Dallas 22.8 4.7 30. Detroit 7.0 1.0 that ultimately turn into new companies and new jobs. As the subindex table shows, the topranked region is London, with the highest University Academic Performance score of 346.2. Its score derives from 10 well-established area universities, with University College, London holding the highest score. Boston ranks second internationally and first nationally in this metric, with a score of 308.6. Boston s talent climate certainly benefits from the presence of over 70 universities and colleges that attract students from around the world. Paris is ranked third after Boston, followed by New York and Tokyo. Interestingly, Washington, D.C. s university academic performance ranking is lower (22 nd ) than its degree ranking (2 nd ), in part because there are only three top universities scored in the Washington, D.C. metropolitan region. This difference in ranking suggests that a significant number of residents holding degrees in Washington, D.C. were likely educated elsewhere. A similar pattern exists for Oslo, Madrid, and Seattle 4 P age
Subindex 2 College Degrees This metric, the percentage of the population over 25 years old with a bachelor s degree or higher, measures education levels of a region s current talent pool. It comes from government data series at the U.S. Census Bureau, Eurostat, and individual Far Eastern countries. It includes residents with bachelors, masters, PhDs, or other higher degrees. Residents holding those degrees are critical to the growth and development of companies in each region. Whether they work in roles that are managerial, technical, or entrepreneurial, they generate the ideas and provide the leadership that power economic growth. Region % 25 Years and Older With Bachelor s or Higher Degree Degree Index 1. Oslo 47.90% 100.00 2. Washington, D.C. 46.80% 96.78 3. London 45.60% 93.27 4. San Francisco 43.30% 86.55 5. Boston 43.00% 85.67 6. Stockholm 42.50% 84.21 7. Madrid 40.90% 79.53 8. Paris 39.90% 76.61 9. Seattle 37.00% 68.13 10. New York 35.90% 64.91 11. Berlin 35.70% 64.33 12. Beijing 34.33% 60.32 13. Atlanta 34.10% 59.65 14. Chicago 34.00% 59.36 15. Tokyo 34.00% 59.36 16. Philadelphia 33.20% 57.02 17. Toronto 31.53% 52.13 18. Dallas 31.10% 50.88 19. Los Angeles 31.00% 50.58 20. Houston 28.40% 42.98 21. Hong Kong 28.33% 42.78 22. Miami 28.10% 42.11 23. Vancouver 27.70% 40.94 24. Singapore 27.33% 39.85 25. Detroit 27.30% 39.77 26. Phoenix 27.20% 39.47 27. Shanghai 22.70% 26.32 28. Sydney 20.00% 18.42 29. Riverside 19.50% 16.96 30. Milan 13.70% 1.00 As the table shows, the top-ranked region is Oslo, with 47.9% of its residents aged 25 and older having at least a bachelor s degree. Stockholm also receives a high ranking (sixth, at 42.5%). Those percentages are influenced by the fact that Scandinavian countries provide strong financial support for education. In Oslo, tuition is not charged at public universities, and 90% of students matriculate in the public system. Free tuition is also provided at Swedish universities. Contributing to Washington, D.C. s secondplace ranking is the concentration of professionals in the federal government and the region s law firms and advocacy organizations. Following Washington are London and San Francisco. Boston ranks fifth internationally and third nationally in this metric, with 43.0% of the population over 25 holding a bachelor s degree or higher. Moving down the rankings, there are no significant differences in the percentages from one ranked region to the next. However, the percentage difference between the highest-ranked (Oslo) and lowest-ranked (Milan) regions is substantial, at 34.2%. 5 P age
Subindex 3 Patents This metric, the number of patents granted per 100,000 residents, measures the innovation produced by the talent pool in each region. It incorporates data from the U.S. government and international patent organizations on utility patents. The vast majority of patents issued are utility patents, with the exception of design patents. Utility, more commonly known as usefulness, is a requirement that must be met for a patent to be granted (a patent application for a hypothetical device would be denied). Region Total Patents Patent Index 1. Beijing 268.1 100.00 2. San Francisco 183.3 68.24 3. Singapore 123.8 45.96 4. Boston 95.1 35.21 5. Seattle 88.1 32.58 6. Tokyo 56.1 20.60 7. Detroit 51.7 18.95 8. Los Angeles 38.9 14.16 9. Houston 36.8 13.37 10. Philadelphia 35.2 12.77 11. Dallas 34.4 12.47 12. Phoenix 31.9 11.54 13. Washington, D.C. 31.50 11.39 14. Atlanta 31.4 11.35 15. Chicago 31 11.20 16. New York 30.3 10.94 17. Sydney 19.9 7.04 18. Toronto 17.80 6.25 19. Miami 17.8 6.25 20. Vancouver 17.70 6.22 21. Stockholm 17.2 6.03 22. Paris 14.5 5.02 23. Riverside 10.1 3.37 24. Milan 8.4 2.73 25. Oslo 7.9 2.55 26. Berlin 6.7 2.10 27. London 6.4 1.99 28. Hong Kong 5.5 1.65 29. Madrid 1.2 1.00 30. Shanghai 1.1 1.00 In this subindex table, Beijing tops the list with 268.1 patents per 100,000 people. This statistic comes from the 2010 report of the World Intellectual Property Organization (WIPO), a United Nations agency. WIPO data indicates that patent activity in China has increased dramatically in the last 10 years. It now has the third-highest number of patent applications per year in the world behind the United States and Japan, having passed Korea, Germany, and the European Patent Office during that time. WIPO s 2006 report notes that Singapore s high patent number is related to a very high level (90%) of nonresident patents. Boston ranks fourth internationally and second nationally, followed by Seattle, Tokyo, and Detroit. Boston s ranking is based on its mix of innovation-based leading industries, including technology, health care, and higher education. Seattle s ranking is driven by the work of its largest employers, including Microsoft and Boeing. Of the American regions with low rankings in the first two metrics, only Riverside, CA (10.1) is in the bottom ten of the patent metric. London has the fourth-lowest patent ranking, and Oslo the sixth-lowest, despite being ranked highly in the first two metrics. 6 P age
III. Recommendations Boston s Index scores reinforce the region s reputation as a talent leader. But that position is not assured going forward, and it will erode if Boston does not work to strengthen itself in each of the three areas covered by Global Talent Index metrics. The Chamber urges that the following steps be taken to strengthen Boston s competitive position. University Academic Performance - Enhancing Boston s leadership as a global center of cutting-edge ideas and world-renowned institutions R&D State Matching Grants - Enacting legislation to make state-matching funds available for university-based research initiatives As competition for innovation and talent intensifies, a growing number of regions are turning to creative ways to promote R&D activities. One way to sustain the region s leadership as a magnet for innovation and talent (in the face of tightening federal R&D budgets and intensifying competition among states) is to create a state-level matching grant program for research. State leaders are currently considering legislation making $50 million of capital funds available for matching grants to be used by universities and research institutions in pursuing major federal and private R&D funding for the Commonwealth. Investment to support these research collaborations today can help ensure that Greater Boston is home to groundbreaking innovations, institutions, and jobs tomorrow. College Degrees - Increasing Boston s ability to develop, retain, and recruit talent Graduate Retention - Increasing retention of graduates via experience-based internships and immigration reform While the region retains half of its students upon graduation, half leave for other regions, with studies showing that the primary driver of these departures is job availability. The Chamber, in collaboration with the Federal Reserve Bank of Boston and the Massachusetts It s All Here campaign, has launched an online portal, Chamber Intern Connect, designed to promote internships among the region s employers. The Chamber and its partners should work to further build student awareness of the Boston work experience, and provide employers with opportunities to train future full-time workers. In addition, the Chamber should work with the state s Congressional delegation and business leaders to advance H-1B visa reform. Limited availability of those visas is a major barrier for foreign-born students who study at area universities and wish to work in Boston upon graduation. 7 P age
Patents - Enhancing Boston s leadership as a global center for innovative ideas and world-renowned institutions Boston-Based U.S. Patent Office - Securing a satellite office of the U.S. Patent & Trademark Office in Boston Boston continues to be a leading global source of patents and intellectual property. One way to build upon this leadership is to secure a satellite office of the U.S. Patent and Trademark Office in the region. Legislation has been enacted allowing the Patent and Trademark Office to establish three new offices nationwide during the next three years. In addition to employment and economic benefits, such a facility would help speed up the processing of the region s patents resulting in faster time-to-market for the medical and technological breakthroughs that are developed in the region. It would also strengthen the region s innovation engine, attracting more financing, start-up companies, and brainpower among both innovators and intellectualproperty professionals. Appendix Methodology & Sources Methodology The Global Talent Index compares 30 major metropolitan regions around the world. United States regions were selected on the basis of size the fifteen largest Metropolitan Statistical Areas of Atlanta, Boston, Chicago, Dallas, Detroit, Houston, Los Angeles, Miami, New York, Philadelphia, Phoenix, Riverside, CA (east of Los Angeles), San Francisco, Seattle, and Washington, D.C. For Canada, the largest regions in the east (Toronto) and west (Vancouver) were selected. The other thirteen international regions were selected on the basis of global economic prominence and availability of data that was comparable across countries. Seven are European regions (Berlin, London, Madrid, Milan, Oslo, Paris, and Stockholm), five are Asian regions (Beijing, Hong Kong, Shanghai, Singapore, and Tokyo), and one is in the South Pacific (Sydney). Data that could be used for inter-country comparisons was not available at press time for Mumbai and other international cities. The Global Talent Index is composed of three talent-related metrics. For each metric, data was used to generate a ranking of the 30 regions. Each metric was then indexed on a 1 to 100 scale, with the top region assigned a subindex score of 100. Details on each of the three metrics are provided below. The three subindexes were then averaged together, weighted equally to avoid overweighting or underweighting of a metric, to produce a Global Talent Index score for each region. 8 P age
Subindex 1 The first metric is the academic performance of the universities in each metropolitan region. It is based on annual rankings of top universities around the world from two separate sources. The first university ranking source is QS Top Universities, which is utilized by US News and World Report for its annual ranking of universities around the world. This ranking gives specific scores to each university within QS s list of Top 500 World Universities. Those scores are based on six indicators: academic reputation (40%), employer reputation (10%), citations per faculty (20%), faculty student ratio (20%), proportion of international students (5%), and proportion of international faculty (5%). The second university ranking source is Shanghai Jiao Tong University s Center for World Class Universities Academic Ranking of World Universities. This annual ranking gives scores to the Top 500 Universities in the World based on the number of alumni and staff of the institution who have won Nobel Prizes and Fields Medals, highly cited researchers, papers published in Nature and Science (where applicable), papers indexed in Science Citation Index-expanded and Social Science Citation Index, and the Per capita academic performance of an institution. These scores then are totaled and attributed to each university, starting the highest scoring university at 100, and lowering by score from there. In both sources, the lowest-ranked universities are organized into groups (e.g. those ranked 400 to 450) rather than given a specific score. Scores were assigned to those universities proportional to each university s position in the rankings. Universities were assigned to metropolitan regions on the basis of MSA boundaries in the United States, and on the basis of contiguous high-density population corridors internationally. For each region, the scores of its universities from each of the two sources were added together, and those two totals averaged to produce a university academic performance score. Subindex 2 The second metric is the percentage of the population aged 25 years or older with a bachelor s degree or higher. United States data for the percentage of the population with a bachelor s degree or higher for Metropolitan Statistical Areas comes from the United States Census Bureau for 2010. International data for the percentage of the population with a bachelor s degree or higher were obtained from several sources. European data comes from Eurostat for 2010, as provided for Tertiary or Post-Secondary Education per the Nomenclature of Territorial Units for Statistics. This data was normalized to the 25-and-older age cohort as outlined below. Singapore s data are also from 2010 and comes from the Singapore Department of Statistics. The Hong Kong data are from 2010, and taken from the Government of the Hong Kong Special Administrative Region s Education Bureau; this data have been normalized from data for the population aged 15 years and over. Beijing s data are from the 2010 Chinese Statistical Yearbook and the percentage has been normalized from data for the population aged 15 years and over. The Tokyo and Sydney data come from 9 P age
a 2012 report by the Toronto Board of Trade, which used 2010 data for the percentage with bachelor s degrees or above for individuals 25 years and older. Data were normalized to cover the same age range for each metropolitan area. First, data were collected for all regions where the percentage of a population with bachelor s degrees or higher was available for age ranges with starting dates between 15 and 25. For some regions, including all U.S. regions, data were available for multiple age ranges, enabling calculation of the average change in degree-holder rates for different starting dates. That average change was used to normalize all data to the 25-and-older cohort, producing the degree data used to calculate the Index. Subindex 3 The third metric is the total number of granted utility patents in each metropolitan region. United States data was obtained for 2010 from the U.S. Patents and Trademark Office website, listed by Metropolitan Statistical Area. In those cases, the number of patents granted in a given year was then divided by 100,000 people in the population. All of the other patent data was taken from the Toronto Board of Trade s 2012 report for all of the international regions being used in this report except Beijing, Shanghai, and Singapore, and which utilized 2010 data per 100,000. The Beijing and Shanghai data was taken from the State Intellectual Property Organization s 2010 Chinese report, which was then divided by 100,000 people in the population. The Singapore data was taken from a World Intellectual Property Organization (WIPO) s 2010 data and was likewise divided per 100,000 people in the population. Acknowledgements The Chamber acknowledges and thanks PwC and Bentley University s Center for Marketing Technology for their contributions to this project, including assistance with the research, as well as Hill Holliday for providing creative support. Greater Boston Chamber of Commerce 265 Franklin Street, 12th Floor Boston, MA 02110 617-227-4500 www.bostonchamber.com 10 P age