The McKinsey Quarterly tackles “China’s looming talent shortage,” which concludes that the country needs to place a “greater emphasis on practical and language skills.” (I’m always delighted by McKinsey content, because it’s never as stodgy as I expect it to be.)
A primary cause for concern, according to the article, is that among the vast numbers of university and college graduates, few are “capable of working successfully in the services export sector.” Those who are capable get sucked into serving the domestic market.
It calls this quandary the “supply paradox.” So many people, but so little expertise. As an example, China has 1.6 million “young” engineers. About a third of university students study engineering. Yet the educational system has a bias toward theory. Whereas graduates in North America and Europe work in teams to solve practical problems, Chinese students don’t. Thus, the report estimates, only about 10% — or 160,000 of them — are suitable for work in multinationals. That equals the same population of young engineers in the UK.
Poor English is another obstacle, as are cultural disparities. (How can somebody reengineer a process when they don’t understand how that process functions on the ground in the country where it’s being used? Banks work differently; hotels work differently; utility firms work differently.)
Geography also plays a role. The article says that only a quarter of all Chinese graduates live in a city or region close to an international airport and the remainder for the most part lack mobility (though the story doesn’t state whether that’s a refusal on the part of the candidate to move or because the potential ones are filtered out early in the vetting process simply by virtue of current location). Most multinationals setting up operations in China count on proximity to major transportation hubs.
Of course, the economy is growing so forcefully in China, the best candidates are drawn into the domestic market or the manufacturing export sector.
Another aspect of the talent shortfall: a lack of “effective managers.” McKinsey estimates the potential need over the next 10 to 15 years at 75,000 leaders “who can work effectively in global environments.” Yet, there are only 3,000 to 5,000 currently. Developing talent from within takes time, yet that is part of the solution — to set up management training companies to upgrade the skills of their top people.
Another source of leadership in the technical and management areas will come from the “sea turtles,” those who work abroad then return home. The report states that in 2003, “some 120,000 Chinese students were studying abroad — the highest number of any of the 28 countries whose supply of graduates [McKinsey] has investigated.” Half of them are in the US. Just as has happened in India with returning Indians, these returning Chinese will play a role in helping grow the services sector.
