Global Skill Shortages

Global Skill Shortages

Malcolm S. Cohen and Mahmood A. Zaidi

As the world entered the twenty-first century, global skill shortages in many occupations were evident throughout the world. While these were mitigated by a global recession, there is no generally agreed upon method for measuring these shortages. This book discusses various theories for measurement. Using data collected from 19 developed countries in North and Latin America, Europe, and the Pacific region, the authors explore various aspects of skilled labor shortages, develop a methodology of measuring shortages by occupation, and provide estimates of the likelihood of the occurrence of such shortages. They develop labor market indicators which measure the degree of shortage or surplus in different occupations.

Chapter 3: Globalization and Skill Shortages

Malcolm S. Cohen and Mahmood A. Zaidi

Subjects: business and management, human resource management, economics and finance, industrial organisation, social policy and sociology, labour policy


Shortages of skilled workers were among the most challenging obstacles faced by businesses in the 1990s. As G. Pascal Zachary (2000), writing in the Wall Street Journal, observed, ‘with skilled workers in high demand, employers are hunting them down - no matter where they live’. Given the emergence of global markets and global production it is important that studies of occupational skill shortages be global in scope. As pointed out by Jeffrey Sachs (1 997), ‘for the first time in history, almost all of the world’s people are bound together in a global capitalist system. This momentous development forces us to think anew about the world economy’. Countries seeking qualified workers are drawing from a worldwide talent pool instead of a national labour force, forcing one to think in terms of ‘brain circulation’ rather than ‘brain drain’. Evidence of this phenomenon is found in the immigration policies of countries experiencing worker shortages in certain fields: Canada’s immigration policy is already focused on accepting workers with special skills; Australia’s immigration policy is aimed at easing the immigration of highly skilled workers; Taiwanese engineers leave Silicon Valley to start businesses at home but keep links with businesses in the United States; Singapore’s government provides tax incentives to companies that bring in needed talent from other countries; and the United States high-tech industry increasingly draws on foreign talent. As national economies are becoming deeply intertwined with one another and the global economy is becoming more closely integrated, it becomes increasingly important to study...

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