The global race for talent – The State’s role?
Global flows of highly qualified¹ professionals and university students have increased in recent decades. At the same time, competition has been increasing among companies, universities and countries, all seeking to attract the most skilled individuals. Being a small open economy at the scientific and technological forefront, Sweden has a clear need for international human capital. Sweden and Swedish companies’ ability to identify and successfully recruit the competence they need from abroad is a priority for the government. This is reflected in both Smart Industry – a strategy for new industrialisation of Sweden as well as Sweden’s export strategy.
This final report is based upon the analysis from four studies conducted within Growth Analysis’ framework project which ran during 2017–18, What can the state do to facilitate knowledge-intensive industries’ attraction of international competence? The main purpose of the framework project is to study factors that can either hinder or enable Swedish businesses to attract international talent.
Global migration flows
During the period 1990–2010, the English-speaking countries of the United States, Great Britain, Canada and Australia dominated as destination countries for highly qualified, internationally mobile professionals. Although Sweden is at a disadvantage insofar as having a small language that is little spoken beyond its borders, it has in fact seen a positive net immigration of professionals during the period studied. Sweden has been particularly successful in attracting highly qualified women. Both in Sweden and globally, the flow of internationally mobile professionals is concentrated to capital cities and other strong hubs. As a result they have come to constitute a larger proportion of particular professions in certain geographical areas.
International students – an untapped potential
Compared with other OECD countries, Swedish higher education institutions attract relatively few international students. 20 per cent of international students and 40 per cent of international doctoral students who graduated in 2013 were employed in Sweden two years later.
Sweden has comparatively generous rules when it comes to allowing international students to work while they are enrolled in higher education. On the other hand, students are given a comparatively short time limit to find employment in Sweden after completing their studies, before they are otherwise required to leave the country. Sweden trails behind many other OECD countries when it comes to international students’ establishment in the local labour market. One explanation for this may be that the country’s higher education institutions have no explicit mission with regard to working strategically to enable students to stay in Sweden and work after completing their studies.
Few professionals from abroad stay for a long time
Our analysis of the flow of highly qualified immigrants that come to Sweden for work shows a steady increase over the period 2010–15. The number of EU/EEA nationals has been increasing faster than the number from third countries, i.e., the rest of the world. We also note that the number of third country nationals who receive a work permit from the Swedish Migration Agency is significantly higher than the number that registers as domiciled in Sweden. This means that many are on short contracts and have, from the outset, only planned to work in Sweden for a limited period. The majority are computer specialists from Swedish multinational companies’ foreign subsidiaries or contractors.
A small but important part
The domestic work force is Swedish employers’ predominant source of human capital. Growth Analysis’ calculations show that, in 2015, employers in Sweden recruited around 50,000 highly qualified workers who were new entrants to the labour market, i.e. coming from education, unemployment or abroad. Only about 5,000 of these were professionals from abroad. This figure does, however, not include persons on short-term contracts, such as those from subsidiaries and contractors.
Even though immigrant professionals cannot be said to fulfil a particularly large part of the Swedish labour market’s long-term recruitment needs, they are important for growth for several reasons – for companies seeking niche or cutting-edge skills, for those recruiting to occupations experiencing a labour shortage, or to facilitate internationalisation.
The positives and negatives for those who stay
Our review of the literature concerning how the highly qualified professionals from abroad perceive Sweden gives a mixed picture of the country’s attractiveness. On the whole, Sweden offers an attractive package for those who choose to settle permanently in the country. This is particularly the case for highly qualified women as the possibility to balance a career and parenting is better in Sweden than in many other countries. In contrast, difficulty in finding suitable housing is emphasised as a negative aspect. A similar picture of the pros and cons emerged during our interviews with employers.
Migration policy is an important factor
Migration policy affects how attractive a country is as a destination for internationally mobile professionals. One factor is the existence of a simple and flexible process for granting work permits. Another is the question of what rights are associated with work permits.
For highly qualified foreign professionals, there are various paths for applying for a work permit in Sweden, depending on whether one comes from the EU/EEA or other parts of the world and on the category of work force to which the person belongs. Cooperation within the EU has enabled citizens of other Member States to come to Sweden to work without a work permit, thus making it easier for Swedish employers to hire staff from within the EU/EEA area.
Within the EU there are common rules for different categories of highly qualified workers from third countries, including EU Blue Cards for highly qualified employment and ICT permits for intra-corporate transfers. Sweden has chosen to maintain its current national labour migration rules where possible. This means that there are a few different types of work permits that operate in parallel, all of which are applicable in Sweden.
Easier to get a work permit, but a more uncertain position in the labour market
In general, Sweden applies the same rules for all categories of labour migrants, regardless of their level of education or professional qualifications. The Swedish regulations entail that work permits can initially be granted for a maximum of two years; furthermore, they tie the worker to the same employer and occupation during this initial period. If the work permit is extended for a further two years, the employee can change employer, but not occupation. In order to gain more flexible access to the entire labour market, a permanent residence permit is required, which one may only apply for after having worked in Sweden for a total of four years.
Other countries are more restrictive in issuing work permits for occupations with low qualification requirements, mainly seeking to attract highly qualified professionals or workers within occupations experiencing a labour shortage. Many countries similar to Sweden allow professionals from abroad greater opportunities to change employers or occupations without having to apply for a new work permit. Sweden is also quite unique in regards to the reapplication process that all work permit holders are subject to after the initial two years.
Government efforts can increase Sweden’s attractiveness
Sweden as a country is well-positioned to compete for internationally mobile, highly qualified professionals, but various policy measures can further strengthen Sweden’s attractiveness. This requires both general and targeted government initiatives. In this respect, Growth Analysis specifically wants to point out the following measures:
- The government should give students and researchers longer maximum time limits to find work in line with their qualifications and make it clear to the higher education institutions that they should help prepare students for establishing themselves in the Swedish labour market.
- The government should consider measures to shorten the time it takes to be issued a Swedish personal identity number and registered in the Swedish Population Register. The different government authorities involved need to be afforded the right conditions to work together efficiently, without unnecessary delays.
- The government should consider granting professionals work permits with a longer duration as well as allowing them greater mobility in the labour market. Providing highly qualified immigrant professionals with greater certainty regarding their future in Sweden is something we see as an important measure in strengthening Sweden’s attractiveness.
- The government should consider instructing one or more authorities to provide support to employers wishing to recruit third-country nationals, but lacking their own international networks. This in order to broaden the group of employers that are able to recruit highly skilled professionals from abroad.
- The government should enable future evaluations of the tax reduction for foreign experts. Changes to the current tax reduction could improve the income of foreign highly qualified professionals. However, the lack of data from the Taxation of Research Workers Board (Forskarskatte–nämnden) makes it impossible to evaluate its effects. Therefore, we cannot provide concrete recommendations on how and whether the instrument could or should be adjusted.
¹ Highly qualified professionals from abroad, are defined here as persons who have at least one year of tertiary education (or unknown education level) and a highly qualified occupation according to the Swedish Standard Classification of Occupations, SSYK.
The global race for talent – The State’s role?
Serial number: Report 2018:03
Reference number: 2017/054