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Talent and wealth creation

Back in the 1960’s Peter Drucker argued that knowledge was becoming society’s key economic resource. Today’s prosperity has its foundations in the knowledge in many fields that has been built up since the beginning of the industrial revolution. Tomorrow’s prosperity, however, will largely be built on knowledge that is yet to be created. This is why, in the context of very rapid change, the foundation of economic success is shifting from the management of knowledge to the management of talent. Today’s developed countries are better described as ‘talent-intensive societies’ than as ‘knowledge-intensive societies’. Its wealth creators and high earners are not only scientists, engineers, bankers and lawyers; they are artists, sports players, rock stars, fashion designers, chefs, interior decorators, therapists, landscape gardeners. Business leaders understand that without an adequate supply of fresh talent their business has no future, regardless of its existing assets, whether in terms of cash, property or patents. There is, however, a need for fresh thinking about what we understand by the word talent. At present many employers reserve the word ‘talent’ for the few high fliers who are destined to become top executives or high level specialists. This is too narrow a view for a world with multiple challenges – needing people with a wide range of high level capabilities. Talent of very many kinds is all around us waiting to be unleashed. ‘Talent’ should not be seen as a rare quality, but a diverse, multifaceted one that exists, to some degree and in some form, in everyone – it is abundant. It is a nice quirk of the English language that talent is an anagram of latent, underlining the fact that so much talent remains hidden and undiscovered. Until the relatively recent past the great majority of the innovations that have led to greater wealth creation, from the steam engine to the driverless car, have stemmed from the work of scientists and engineers in North America Japan and Western Europe. In 2001 98655 patents were granted to organisations or individuals in the USA, 34,890 in Japan and 20,964 in Germany, UK and France. 902 were granted in China.  In 2014 the number granted in the USA had grown to over 150,000, in Japan to 56,000 and in the three European countries to 64,000.  7,291 were granted in China. Yet over the next few decades millions of people who, even in quite recent times would have been employed as farm workers or in other jobs involving relatively very low wealth-creating potential, will become graduate engineers, scientists, surgeons, lawyers and managers. Nearly 7 million students are expected to graduate from China’s institutions of higher education this year, up from less than a million in 1999 and two and a half times the number graduating in the United States. In 2004 China overtook the United States in both the number of students enrolled and the number of degrees awarded annually. And by 2020 the Chinese government expects to have a total of 195 million college graduates in the labour force, compared with a total projected labour force of 167 million in the United States. The wealth that will be created by such cohorts of graduates over the next twenty or thirty years is beyond imagining. Drucker emphasised the importance of investment in education, arguing that whereas in the past farming and food production were the base on which a country’s wealth was built, in the modern world the school has taken the place of the farm. The countries that prosper most will be those that are most successful in developing their pool of natural talent. To do so calls for an educational system in which not only all talented young people have access to the very best educational institutions, regardless of their socio-economic or ethnic background, but also one which recognises and makes provision for the many facets of talent.

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