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TALENTS WITHOUT BORDERS
PAPER FOR VEDRÒ 2012
Rome, 26th August 2012
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TOPIC How to turn "brain drain" into a competitive advantage and use it as a growth factor to place Italy among the Western countries that can theoretically count on the most qualified universities and most innovative businesses in the world? How to make Italy competitive in the "war for talents" and “use" foreign citizens better in order to be able to influence public opinion and promote its image abroad? Main lines of actions:
• Bring back talents to the country: How to encourage the return (in addition to tax incentives) and how to ensure that their return is successful?
• Ensure, with proper tools, that those who decide to stay abroad can still contribute to growth and cultural renewal of the country through ideas and projects. How to create a structured network that puts permanently in this connection “Italy widespread”.
• Attract foreign nationals: How to increase the quality and quantity (to be discussed as "hard attraction" – to be distinguished from a second type of marketing) of foreign workers and highlevel researchers and what are the possible choices in terms of segments to focus on.
• Enhance the contribution of foreign nationals with the ability to draw opinion on projects (cultural or business) that can promote and diffuse a positive image of the country oversea (this second form of attraction can be referred to as "soft attraction”) in order to increase the attraction of qualified workers and even improve the work of foreigners on Italian projects abroad.
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INTRODUCTION .............................................................................................................................................................. 4 1. HARD ATTRACTION: ATTRACT FOREIGN TALENTS TO ITALY........................................................ 7 1.1 ANALYSIS ...................................................................................................................................................................................................... 7 1.2 WHAT OTHER COUNTRY DO ............................................................................................................................................................ 10 1.3 POLICY OPTIONS .................................................................................................................................................................................... 13 2. SOFT ATTRACTION: VALORISATION OF THE FOREIGNERS’ CONTRIBUTION ON ITALIAN PROJECT ABROAD ....................................................................................................................................................... 15 2.1 ANALYSIS ................................................................................................................................................................................................... 15 2.2 WHAT OTHER COUNTRIES DO ........................................................................................................................................................ 17 2.3 POLICY OPTION ...................................................................................................................................................................................... 20 CONCLUSIONS ............................................................................................................................................................... 21
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INTRODUCTION
CIRCULATION AND CONNECTION OF ITALIAN TALENT
The theme of the socalled "talent drain" is very present in the national public debate. Much talk about it, but little is known, and even less is done in terms of concrete policies. In particular:
a) Italy encounters difficulties to attract: the offset of young skilled nationals is not counterbalanced by the foreign high skilled workers inflow.
b) An opportunity of growth lies in the involvement of the underexploited rich Italian human capital abroad.
Actions are then to be set up on both aspects so that the mobility of talent becomes an opportunity for the country.
PREMISSES: THE MOBILITY IS A VIRTUE
What do we mean by talent? It is not only a matter of semantics. The design of a policy that comprehend how talent circulate and aims at attracting foreigner talent, must know who to target in order to be truly effective and not just propaganda initiative. Who are the talents? A researcher who makes knowledge the core of his profession? Or a qualified engineer who produces knowledge out of his instrument? An entrepreneur who knows how to diffuse an innovation? An athlete? An artist? "Talent" is of course all of this, however, the available data usually refers to particular categories (eg researchers) or to all graduates.
Are talents right to go? The answer is yes and for three good reasons.
A. Facing a lack of opportunities in his/her place of birth, a talent has the duty to seek a better condition to be given the best: a vigorous plant transplanted to another site is better that a wilting one at home. Put another way, a student or a worker should move where the greater the chance are that his talents blossom. A bright student forced to stay in Italy where he cannot possibly make the career he deserves, certainly faces frustration, but this also affects the student community as a whole.
Within the research community, it is possible to assess the performance of the Italian researchers abroad: for instance, by counting the publications in best international reviews and the registered patents. In this regard, Icom (2011) estimated the value generated, in terms of value of patents held by the twenty best Italian scientists living abroad: The estimated value produced by these scientists reaches 861 million Euros or, in other words, a loss of 63 million per scientist for Italy. Before asking whether Italy has lost something is better to wonder: would have these twenty top scientists produced the same number of patents if they had stayed in Italy? The same goes for the Italian researchers with the most cited publications working abroad: being abroad has probably contributed to their performance.
The talent circulation can also benefit to their country of origin. The OECD found a positive correlation between being abroad and the ability to produce the best research (OECD 2009). Therefore being able to brink talents who are studying or working abroad back to Italy could improve the reputation and efficiency of the whole research institutions.
B. Also, regardless to whatever the country of origin can offer, mobility for studying and working is generally seen as positive because it allows to enrich education, to face various situations, to build up an international network.
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C. The mobility and world openness is in the new generations ‘DNA. As confirmed by various researches the new generations are increasingly globalized, used to travelling frequently and to interacting with different cultures.
To move beyond borders is therefore a choice to support and encourage.
Do we have to worry about the phenomenon?
Italy's problem is not the number of talents who go away, but the foreign talents who do not come in. This impoverishes our country and makes it enter into a downward spiral. Not surprisingly, the most dynamic and competitive countries consider strategic policies to attract talented young people and recognize them as a real investment in regard to the opportunity they represent.
A “zeromobility” situation is not an optimal condition for a country. Entrapping its talents is not an accurate solution for a country. On the other hand, the oneway flight is not desirable either, because it depletes the place of departure. The optimal condition is mobility, i.e. being able to go and return with the same ease. Otherwise nations face the risk of entering a vicious cycle: Young people leave if the country does not change and without the energy and intelligence of young people, it becomes more and more difficult to change.
BUILDING A STRATEGY FOR ITALY CONSIDERING OTHER EUROPEAN COUNTRIES’ GOOD PRACTICES AND THE SUCCESSES OF SOME ITALIAN “PLAYERS”
Why is London attracting Russian magnates (and talents) and Arab Sheiks?
Historically, the UK has maintained a liberal investment policy and generally makes no policy distinction between domestic and foreign investments, but it doesn’t seem to be the reason of such an advantage over the other European countries. Akhmed Zakayev, a former Shakespearean actor whom the Kremlin considered as a Chechenyan rebel received asylum in the UK "thanks to the law of this country". For Yekaterina Lebedeva, a concert pianist "One thing that strikes me in London is that you feel there are opportunities and things you can achieve, a sense of artistic freedom". Andrei Nekrasov, a Russian filmmaker who lived for many years in London before he moved to Berlin, explained "Germany is good for savers; London is for spenders."London and the UK have been the destination of the elite for decades but also an attractive place for those seeking for freedom and opportunities. Currently, more than 25% of the businesses located in London are under foreign ownership. The city is profiting from successive waves of the ultra rich American bankers, Arab sheiks, Hong Kong Chinese. More precisely, over 300,000 Russians have made London their home.
Why is Spain the first destination of Erasmus students?
L’Auberge espagnole/Une casa de locos, a 2002 movie which tells the story of a French Erasmus student in Barcelona made the city of Gaudi the Erasmus capital. In this special category, mainly French, German and Italian students come to Spain, especially to Madrid, Granada, Valencia and Barcelona. Several factors may explain the attractiveness of Spain: the importance of Spanish language worldwide, the international image of Spain, its climate and culture, its night life, and also the mouth to ear among students after their Spanish Erasmus experience.
How come a country with such a serious image like Germany has managed to appear in the top “glamour” global brands ranking with the highest number of brands than all the other European countries put together?
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Nivea, Adidas, Heinz, Mercedes, Siemens… German brands have prominent positions in almost every major global market. The Germans have drawn an image of luxury and quality. The Economist says, "It's quite simple really, Germany makes things which people in countries with growing economies want to buy." Engineers occupy a high pedestal in this country that prizes technology and craftsmanship. BMW, MercedesBenz, Audi and Porsche are usually considered the top brands in the car industry with which other brand cannot keep up. This can be explained by the long History of the German car industry, but also by the numerous racing successes which told an impressive story of high technology and reliability.
How come Paris attracts so many international celebrities, and in particular, why have the four most famous Italian actresses since the Second World War moved to the French capital?
Despite the legendary arrogance of the Frenchies, Paris is the first destination of tourism in the world, one of the most attractive city of international students, and the home of many celebrities and famous couples. Many times, Paris was chosen to set movies such as Last Tango in Paris (Bernardo Bertolucci), Amélie Poulain (Jean Pierre Jeunet) , Marie Antoinette (Sophia Coppola), Everyone says I love you (Woodie Allen). For this reason, many actors fell in love with and in the city and decided to settle in France: Sophia Loren and Carlo Ponti, Jim Morrison and Pamela Courson, Vincent Cassel and Monica Bellucci, Johnny Deep and Vanessa Paradis. In particular, as a magnet, Paris has attracted the most famous Italian actresses since the Post Second World War: next to Monica Bellucci and Sophia Loren, Ornella Muti and Claudia Cardinale, and also the model and singer Carla Bruni. Again, everything cannot be explained by the tax scheme. The French capital benefits from a colorful image full of symbolism: city of the lovers, city of fashion, city of the Revolution, city of culture and knowledge, with its many museum and monuments, prestigious universities and schools (Sorbonne, Sciences Po Paris), renowned quality of life and night events which make the French Capital one of the favorite places of the Jet Set.
Why cannot the Italian football, which was the most beautiful in the world, afford international “top players” and see the bulk of its best Italian young players go abroad?
It is easy to answer that it is simply a question of money. However, it is said that the football players are probably the less important talent category to attract and retain. This consideration is part of the truth, and yet if the Italian clubs have no more money, it is more a question of twisted management than the result of a political decision. Conversely, it is true that it is relevant for a country to keep, attract and grow sports talent, especially because sporting events can generate an important outcome in the real economy, diffuse a positive image which can benefit to the whole country, and pass on values and the desire to get into the game to future generations.
… yet there are also important Italian examples:
The Ferrari brand. Italy is seen as the cradle of design and creativity. Along with the Fiat, Ferrari is the brand that is most associated with the concept of Made in Italy. Also, Ferrari is the most popular brand on Internet, according to a special survey conducted by Reputation ActValue manager (the final result takes into account the reputation of the Interbrand Top 100 brands ranking among users of Internet). Ferrari won the top step of the podium collecting 92% positive score. Ferrari stands in front of the major brands of Italian luxury.
…or some universities in terms of attraction of foreign students. Between 2004 and 2008 the number of international students grew by 91.8% in Italy. The absolute number of students from the largest and emerging economies has quadrupled from 2,500 to 10,000 units between 2003 and 2010. However, this performance is to be ascribed to a few universities. The Politecnico di Torino, the Politecnico di Milano and the University of Bologna, alone, account for 33.8% of the overall growth of the seventysix Italian universities (Extraordinary performance of the Polytechnic of Turin, which goes from 212 to 1,401, increasing by 561% in 4 years).
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1. HARD ATTRACTION: ATTRACT FOREIGN TALENTS TO ITALY
1.1 ANALYSIS The advanced countries are competing for attracting more talents. The migration of students is certainly a stronger phenomenon than other segments of skilled foreigners (managers, ICTs specialists, artists, journalists…), and for which the growth implies higher economic values. The following study mainly focuses on this specific population in order to draw the attention on what we can consider as “hard attraction”. In the “war for talents”, Italy is struggling to attract highskilled foreigners. The current conditions of the Italian labor market does not allow Italy to be an attractive destination for skilled foreign workers, not being able itself to retain its high qualified nationals. Another dissuasive cause lies in an adverse selection effect linked to immigration bureaucratic burden. Positive examples lie in the cities where many foreigners move to. London, for instance, is collecting a high percentage of foreigners attracted by better working conditions and the perspective of success. A correct segmentation of the potential "talents" is necessary in order to implement an accurate strategy. Incentive policy for foreign investments, efficient infrastructures, internationalization of universities and targeted immigration policy are several determinants of attractiveness of a country we might call “hard attraction”.
International students: The phenomenon dimension and the Italian position
The significant growth of the international student market is a reality in sociocultural and economic terms. If international students were 1,630,000 in 1998, their number has grown to 3,340,000 over the last ten years, i.e. their number has more than doubled.
Another interesting fact is the high average unit value that an economic system can acquire by attracting foreign students. An estimate conducted by the Vision 2011 conference on "university of the future" (which considers the average students who study at a university outside Europe) demonstrated that not only international students are an indicator of the university system’s attractiveness, but also a real economic resource for the hosting country / city / institution. The economic value of an international student considering tuition fees, living expenses in the city (rent, expenses, etc..), entertainment expenses, etc.. is around 34 000 £ (about 41,000 €) per year. Besides the economic value, all the implications in terms of cultural openness, knowledge of the different diffusion of new or different ideas and values, a greater and deeper understanding of the basic values of democracy are to be considered. There are many positive externalities related to the increasing influx of higher human capital (e.g. foreign graduates), however the impact of skilled individuals migration varies according to the particularities of a sector, as well as the mechanisms that preside over these movements, and consequently the political actions which should govern them.
All countries are not able to benefit the same way from the opportunity offered by the expansion of this market. This is the case of Italy. Although our country has the privilege to host prestigious and seniority universities, the Italian university system as whole encounters difficulties in attracting students compared to their neighbors. The following chart shows the market shares of international students by country.
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Graph 1: Market share of International student per country (2008).
Source: Vision analysis based on OECD data, Education at a Glance 2008.
An analysis conducted by Vision on international students enrolled in our country clearly shows that the Italian university system (some universities such as the University for Foreigners of Perugia, Bocconi, the polytechnic of Turin and Milan made exceptions) does not actively and consciously search for attracting international students or particular segments of these students but it rather takes a passive attitude, accepting the situation, and does not show any selfpromotion effort towards students willing to study abroad.
Not only international students who arrive in Italy are few but very few are those who come from countries with strong university systems. The nationalities most represented by international students enrolled in Italian universities are except for China which is the largest exporter of international students worldwide those geographically closest to Italy: Albania and Romania. In fact, Italy has less international students than there are Italian students going oversea. The largest community of international students is the Albanian community that, with its 10,961 units, is bigger than the USA, UK, Chinese, Brazilian, Russian, French and German student communities put together. More detailed analyzes show that it is often young immigrants, probably of second generation, which, in many cases, have done their studies in Italy since primary school.
In short, Italy is losing potential international students and retains only a slight advantage over Spain among the big countries. However, Spain is the most attractive country for Erasmus students.
The delay position of Italy is not a final condemnation. The market of the "war for talents" is highly dynamic and in this frame, Italy may have its chances.
Foreign highskilled workers
The role of foreign skilled workers becomes more and more important in the current situation of economic crisis. Because they allow a country to enlarge its international network, they represent an opportunity of economical growth. The decision to change country is driven by the search for a location where to express his potential and access a better wage. The possibility for foreign talents to live in an appropriate environment is also linked to an index of features such as the availability of efficient infrastructures, skilled workers, or an encouraging immigration policy.
In order to assess the attractiveness of foreign skilled workers, the graph below presents an analysis of the share of immigrants over the total population and the share of educated immigrants over the total immigrant population in 2000 in the largest European countries. These data stress several results. First of
18,7%
10,0%
USA Uk Germany France Italy Spain
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all, in terms of stock of immigrants, and given the total population of each of these countries1, the UK, Germany and France are far more “attractive” than Spain and Italy. A second result is the importance of skilled foreigners among the immigrants coming to the UK and Germany. France does not attract so many skilled foreigners among the stock of immigrants, probably because of a familial reunion oriented immigration policy at this time. Italy not only attracts fewer immigrants than other countries, but benefits from the smallest share of skilled immigrants.
Graph 2: share of immigrants over total population, and share of tertiary educated over total stock of immigrants in 2000.
Source: F.Docquier, A. Marfouck and B.L. Lowell (2007).
What is the reason of such a situation?
For many analysts and politicians, the solution to attract foreign talents lie in the tax incentives. However, the impact of such policy is rather light. Below is a table with the tax rate on individual income, per country, for people with income over € 150,000. These data, in regards to the precedent results, allow to conclude that the tax scheme is not the main determinant of the attractiveness of foreign talents.
Table 1: personal income tax rates for incomes over € 150,000 in the major European economies
Paesi Aliquota
Italia 43% Germania 42% Francia 41% Spagna 44% Inghilterrra 40%
Source: Vision on the Fiscal scheme in France, Germania, England, Spain and Italy
In fact, as we will develop further, the reasons are more complex and cannot be limited to tax incentives.
1 In 2000, the total population of the UK was 58,8 millions habitants, Germany: 82,7, France, 60, Spain 40,5 and Italy 57,7 millions.
6 5,7 6,1 3,9
Share of immigrants over the total population
Share of tertiary educated immigrants over the stock of immigrants
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1.2 WHAT OTHER COUNTRY DO
In the war for talents, many countries have set up new policies in order to make their universities and economy more attractive. These policies mainly consist in the internationalization of university, immigration reforms or tax incentive to make foreign investment easier where the local industry is growing.
FRANCE
In order for the professional immigration to meet the needs of business and be adapted to the carrying capacity of France, given the economic condition changes, France has reformed its immigration policy in 20062 to facilitate the immigration of certain workers and students by implementing new type of residence permits:
• Skills and talent residence permit: (Article L.315 1, CESEDA3): this residence permit aims at attracting high skilled workers carrying on a project in the fields of culture, sport, science, or development, likely to contribute to the French influence abroad. It lasts for 3 years and can be renewed once. The target of this policy are the citizens of the countries of a “priority solidarity zone4”
• Scientific residence permit (Article L:3138 CESEDA) : this one year residence permit granted PhD students willing to conduct researches in France. This permit can be renewed for 4 years. Any nonUE citizen can apply for this permit.
• France also granted a six months permit residence extension to nonUE citizens who obtained a Master degree in a French University to give them the opportunity to find a job in the field of their study.
• In 2008, France established a list of professional sectors facing difficulties in recruiting, and implemented new procedures to facilitate the migration of foreign workers. It applies to the citizens of the new members of the UE for a list of 150 professions, and on a worldwide scale for 30 others, with special agreements with nine French speaking countries of Africa.
• International agreements to organize “young professional exchange” were signed with Argentina, US, Canada, Bulgaria, Romania, Morocco and Tunisia to allow 18 to 35 years old young professionals to work abroad from 3 to 18 months.
Poles de competitivité and Pole de recherches et d’enseignement supérieur (PRES) are a cluster policy and an university reform implemented both in 2005 and aiming to increase mobility and the attractiveness of the French regions in hightechnology sectors such as biotechnology, space, or ICTs and developing the internationalization of French Universities. These clusters involve public and private research institutions, universities and companies from a given region, combined under a single administrative umbrella. Their goal is to encourage teamwork (thanks to tax incentives scheme, assistance, subsidies, and a reform to facilitate foreign investments), attract foreign investments and facilitate international partnership and mobility.
GREAT BRETAIN
Since April 2012, the British Council provides services to the education institutions for international education marketing in 37 markets5, since April 2012 (41 from 20136). These services consist of:
• Consultancy: evaluation of partnership opportunity, competitor analysis, scholarship promotion,
2 Loi n°2006-911 du 24 juillet 2006 relative à l’immigration et à l’intégration http://www.immigration.gouv.fr/spip.php?page=dossiers_det_imm&numrubrique=286&numarticle=1833 3 Carte mention « compétences et talents », Code de l’entrée et du séjour des étrangers et du droit d’asile. 4 See map http://www.diplomatie.gouv.fr/fr/IMG/jpg/Cartezsp02.jpg 5 The 37 market are: Bahrain, Bangladesh, Brazil, Canada, China, Cyprus, Egypt, France, Germany, Ghana, Greece, Hong Kong, India, Indonesia, Japan, Jordan/Iraq, Kazakhstan, Korea, KSA /Saoudi, Kuwait, Malaysia, Mexico, Nigeria, Oman, Pakistan, Poland, Qatar, Russia, Singapore, Spain, Sri Lanka, Taiwan, Thailand, Turkey, UAE, USA, and Vietnam. 6 From 2013, the British Council will extent these services to Colombia, Italy, Israel and Romania.
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• Transnational education services to help build programs and international network, • Education intelligence (research on country profile, demographic an education issue, studentdecision
making survey) • Specific training to agents incountry for knowledge and capacity building.
The United Kingdom Trade and Investment (UKTI) is a national government agency that offers free support and independent advice to foreign companies looking to invest or locate in the UK. UKTI provides market information, location guidance, practical advisory on government incentives and regulation in 33 countries:
• Asia: China and Hong Kong, India, Japan, Singapore, Malaysia, Korea, and Taiwan • Americas: USA, Canada, Mexico, Brazil • Africa: Egypt, Libya, Morocco, Tunisia, Algeria and South Africa • Oceania: NZ and Australia • MENA countries and Israel • European countries.
The Tech City UK initiative aims to build on the existing cluster of technology companies in East London to create a worldleading technology hub. The Tech City Investment Organisation (TCIO) is dedicated to driving investments to the area, giving practical support and networking advice to help members succeed. Since 2012, 58 Enterprise Zones have been identified where a combination of financial incentives and reduced planning restrictions applies, in order to stimulate manufacturing opportunities, business creation as well as investment. The TCIO organises large scale events such as the Entrepreneurs Festival in 2011 to attract most innovative business entrepreneurs and investors and increase the visibility of the cluster members.
The UK has implemented a simplified immigration policy based on several visa, called “tiers”. The “highly skilled Migrants” may apply to the “Tiers 1”visa, which offers specific rules and procedure depending on the category of migrants who want to move to the UK i.e: “Exceptional talents” (people who are recognized as leaders in the fields of science and the arts), Entrepreneurs (people who want to set up or take over a business in the UK), and Investors. “Skilled Workers” who have been offered jobs in the UK may apply for Tiers2 under a pointsbased system which encompasses: Sportsperson, intra company transfer, religious staff, and a “General” category.
GERMANY
Germany is the third destination of international students in the world after the USA and Great Britain. To attract even more international students, Germany relaxed the rules for the awarding of grants, developed new agreements with foreign partner universities, and is focusing on the quality of the study programs (including guidance and counseling). Furthermore, the immigration policy allows foreign graduated of German universities to extend their resident permit up to one year to find an employment which matches their skills. German research institutions have opened up their project funding programs to the international community. The German’s strategy to attract foreign researchers is based on cooperative projects and involves several institutions (university and nonuniversity research institutions) coordinated by the federal states.
The Deutsche Forschungsgemeinschaft (DFG) is a research funding organization aiming to address challenges such as the need to provide sustainable support for young researchers and support for networking in the field of research between scientists and researchers in Germany and abroad. Since 2000, the DFG has developed an international strategy: several representation offices were set up abroad in collaboration with foreign national science organizations to promote partnership between researchers in country: following the opening of the SinoGerman Center for Research Promotion in Beijing, many representation office have been set up, in Washington and New York (collaboration with Canada and the US), in Moscow, in Delhi, in Japan, Sao Paolo (collaboration with Brazil and Chile) and Poland. The range of crossborder projects meanwhile extends from ordinary academic exchange grants and fellowships to
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financial support for scientific events. To advance internationalization, the DFG has opened its funding programmes for international collaboration between researchers. At the European level, the process of European integration and an emerging "European Research Area" led the DFG to focus particular attention on scientific and research cooperation in Europe.
The DAAD (German Academic Exchange Service) is a funding organization supporting the international exchange of students and scholars. It provides information on the country specific scholarship programs, the universities projects, scientific cooperation, visa regulations, The German Academic Exchange Service to foster international mobility of researchers and students.
Acttracting Foreign Investments: Germany is an attractive location for investments, thanks to the availability of direct access to the markets, efficient infrastructures, and the quality of the universities and research institutions. However, South and East Asia are draining more and more R&D investments. To reverse this trend, the Federal Government established the HighTech StartUp fund in 2005, as part of the HighTech Strategy. This fund consist of 15 billion € subsidies to attract start ups and additional 6,5 billion € to encourage international research and development.
SPAIN
Within the first 4 years of the Erasmus Mundus program, Spain invested 400 million Euros to welcome 6 000 European students. Spain is envisaging to extend this initiative to Master and PhD students with 24,000 € per capita and per year, for an overall budget of 950 million Euro corresponding to 20,000 scholarships, with the intention of attracting Chinese, Indians and Africans students.
Spain set up three special residence permit or visa in order for non European students (Residence authorization), researchers (Temporal residence and work authorization) for researchers, and workers (Blue card for workers) to come in Spain for more than 6 months and up to 5 years (depending on the conditions and reasons of their residence). Foreign researchers and workers who come to Spain have to contribute to the tax system. However, bilateral agreements were signed with different countries to prevent foreign researchers to pay double tax contribution. Also, foreign workers, researchers and students all benefit from the social care cover. For instance, pregnant women have the same right no matter their nationalities.
The Spanish Ministry of Science Technology and Innovation carried out the 2011 Law for Science, Technology and innovation (LCTI), a policy aiming at encouraging science and knowledge transfers. This law set up common recruitment rules in public research institutions, and offers equal condition access for nationals and Foreigners (with residence permit) to public scientific carrier.
The Beckham law was implemented in 2004 in order to attract high skilled foreigners through tax incentives: this law allows these foreign residents to pay 24% incomes taxes (instead of 43%, for usual taxpayers whose income overweight 600 000 €). The law is named after the famous soccer player Beckham since it was introduced simultaneously with his arrival in Spain.
ITALY
A National strategy to attract foreign students started 10 years ago which mainly consists of bilateral cooperation agreements with foreign countries. For instance, Italy and China, under the Marco Polo project agreed on common principles to give accreditation to universities and programs. Italy also set up new dispositions to welcome Chinese students. The outcome of this agreement is an increasing number of Chinese students (from few hundreds to more than 4000 in 2012).
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A second aspect of this strategy is the implementation of new disposition to facilitate access to Visa for international student. The willingness of Italian universities to attract foreign student and to develop internationalization has increased over the last years. Some of them developed master degree and PHD program in English, but most of them have kept the Italian language so that they developed Italian as a second language for foreign students.
The University of Perugia for foreign students was created in 1926. Its first mission was the teaching of Italian as a second language, Italian culture and History for foreigners. For instance, the University of Perugia offers a one month Intensive Erasmus Italian courses for Erasmus students. If these activities still remain its business core, “in order to adapt to the challenge of the century”, since 1992, its mission has expanded to graduated programs (up to Doctorate), 50% students are foreigners.
1.3 POLICY OPTIONS A specific policy based on the studying of the attraction factors and valorization of each of targeted segments should be developed. However, some indications are ready widespread: The first important step is to facilitate temporary and permanent residence through the reduction of bureaucracy burden when workers decide to move from strategic areas (such as from Japan). Some services should therefore be introduced for high skilled foreigners, able to reduce and facilitate the bureaucratic procedures, thanks to a simplified English language (as, for example, in Spain or Great Britain). The next step is the introduction of economic incentives for the attraction of strategic segments (Asian engineers, ICT specialists, Chinese and Indian students, skilled workers) that are identified through the use of marketing tools.
It is also of a high importance to develop internationalization of Italian universities, which includes actions such as:
• The creation of attraction centers for International students • Services to look for an accommodation • Increasing the number of courses dispensed in English language. • The introduction of free Italian courses for those who follow courses in English.
Similar considerations may apply to different segments of foreigners, but especially for cities and regions willing to give priority to the attraction of foreign nationals.
Midtolong term actions
• Increase the investments in research focusing on specific fields on which we are likely to achieve a competitive advantage (the concept of "smart specialization") or a minimum critical mass of investments;
• Selection of universities and research fields: Setting up a marketing strategy to promote the Italian university system means selecting the universities that can be "champions" of the attraction process (23 poles can enter the top20 ranking); also identifying research fields of excellence becomes essential to facilitate the knowledge and information spillover and generate positive externalities;
• Incentives tax policies for determinant targeted segment: depending on the nationalities, types of work or qualifications (for instance lower taxes or exemptions depending on area of residence or business);
• A better exploitation of the competitive advantage of Italy in terms of culture, art and history, to make more attractive the Italian Offer;
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• Decreasing the fee of universities paid by foreigner and Erasmus students; and set up facility to allow Erasmus students to stay or come back.
• Incentive tax policy to encourage the constant presence of talent in our country. This applies to the best researchers and new entrepreneurs in specific areas selected as strategic for the increased productivity of Italian system;
Incentives to attract foreign talents in our country:
a) Simplification of bureaucracy for foreigners: Exclusion of foreigners with qualifications equal to or higher education degree from the immigration flow decree in order to facilitate bureaucratic procedures to obtain and renew residence permits.
b) Reducing the mandatory social security contributions for foreigners: Lowering the annual salary threshold above which no social security contributions are paid for from € 93,000 to € 40/45.000 for graduated and postgraduated immigrants, in order to make wages more competitive.
c) Reducing the tax wedge (eg: social security contributions).
All those actions must follow an analysis of marketing tools that are to become the assets of anyone willing to launch an ambitious marketing operation of the Italian system. What is the value of the different segments of foreigners we can attract regarding the specific needs of Italy, its productive sectors, territories and universities? What factors do these segments consider when deciding to go abroad? Who are the competitors and how am I positioned – Italy, territories, university – regarding the determinant factors of the segments I want to attract most? On this type of strategic issues, there is a vacuum of knowledge that think tanks or university should fill up prior to the definition of any policy (and this both applies to attract high professionals, students and tourists), with the intention of creating tools to enhance the skills of public administration.
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2. SOFT CONTR
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16 Mission of Vision is to contribute to the dissemination of ideas.
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the world GDP growth (3.1%).Following these trends, the market would hit 1.8 billion international tourists by 20307.
However, the economic value and growth rates of this niche market make competition harder: if Italy had been in first place among the great powers of world tourism until the early nineties, the “Bel Paese” (the Beautiful Country) has steadily slipped in the rankings over the following decades. Currently nearly eighty million international tourists come to France every year, compared to just over forty who land in Italy. The following graph puts alongside the market shares of the states that attract the largest number of international tourists in 1990 and 2010.
Nevertheless, the Italian tourism industry should not only compete with its neighbors but also with the ones that were considered the emerging Asian economies until some time ago: China and India. Indeed, a careful analysis of flows and destinations chosen by tourists with international mobility points out an appreciable increase in travel to Asia: in 1990 when 60% of international travelers chose Europe as a destination, that market share is increasingly eroded by the growing interest of tourists to the Far East, up to the point that, according to our analysis, the market share of Europe will be reduced from nineteen percent, down to 41% by 2030.
Graph 4: International tourism market share (1990 and 2010) per country
Source: Vision&Value with the World Tourism Organization data
Brands & National image
Another soft attraction indicator may be represented by the recognition of the major national brands abroad. The more visible, the more attractive and valuable the brand is, for itself, but also indirectly for the rest of the country in terms of “symbolic capital” (to borrow a sociologic concept). In this regard, it is interesting to observe the results of the latest ranking published by Interbrand, an annual ranking of the top 100 brands in the world, dominated by U.S. brands (that represents 48 out of 100 brand; and are hegemonic in the top 10). In order to assess the factor of soft attraction for each country, we assigned points to each country according the brand ranking:
Country’s points = 100 n +1 n being the ranking position of the brand, so that the top brand gets 101 points and the last brand is given a score of 1.
7 UNWTO, International tourists to hit 1.8 billion by 2030, 2011
1% 1%
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After scoring the brands, the data are gathered given their nationalities, so that we can compare the results per country. The chart below shows the score of 5 European countries, given the rank of their brands in 2011. The table presents the number of brands and their nationalities among the top 100 global brands between 2001 and 2011. A first result is the progression of European brands within this ranking. This analysis also points out the predominant position and growing number of German brands, followed by the French brands. The British and Italian brands‘scores remained stable, while the Spanish brands realized a breakthrough, overtaking Italian brands; however the UK counterbalances this stagnation with a better position, and a higher attraction of foreign talents and investments. Table 4.1: Number of brands in the top 100 global brands per country
2001 2011 N. di brands N. di brands
Germania 7 10 Francia 3 7
UK 5 5 Spagna 0 2
Italia 3 3 Source: Vision on Interbrand’s data (Best Global Brands 20012011)
Graph 4.2: Overall score per country (2011)
Source: Vision on Interbrand’s data (Best Global Brands 20012011)
2.2 WHAT OTHER COUNTRIES DO Many countries understood long ago the fundamental role of national cultural institutes in the promotion of culture and language, alongside embassies and consulates. But Cultural Institutes are not the only tool
521
332
Germany France UK Spain Italy
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for the diffusion of a positive image of their country worldwide. Country marketing may also involve initiatives to promote national brands. FRANCE: The Institut français is an operator of the Ministry of Foreign Affairs and European External Action of France promoting French culture overseas. It is a network embodying 101 French institutes and 125 offices around the world. They are in charge of the promotion of cultural and scientific cooperation, organizing artistic exchanges and dissemination of scientific culture. The French Institute encourages the mobility of French artists abroad and welcomes foreigner artists to France through the International Residency program to promote cultural diversity. The French institutes work closely with L’Alliance française, a foundation giving label to more than 1000 nonprofit organizations in 135 countries which aims at teaching French as a foreign language and promoting French culture and Francophonie. The pole de competitivité policy also aims at increasing the visibility of the regions by enlightening specific competences, and by allowing SMEs and research institutions to benefit from the recognition of the big societies they are working with. For example, in the MidiPyrénées region and more precisely in Toulouse, within the Aerospace Valley cluster, several SMEs may take advantage of their partnership with EADS, Airbus and Thales. To promote the agriculture and food processing industry for which this region is famous in France, a cluster, Agrimip, was created. The Regional Chamber of Commerce and Industry helps organize exhibitions in France and abroad, such as the famous Salon du Bourget, to promote the activities of these enterprises, increase their visibility and develop their international network.
GREAT BRITAIN: The British Council is an organisation which provides English teaching, promotion of Art, UK culture and way of living in over 100 countries and aiming at developing creative leadership, professional networks and cultural educational programmes worldwide. The British Council also delivers English teaching by radio, web and broadcast. BC also organizes various exhibitions, festival and events, in many fields, such as “cafés scientifiques”, informal events to engage people with creative ideas about science, or the “Zero carbon city” to raise people awareness on climate change and energy efficiency. It works in collaboration with the UK Government, the British Chamber of Commerce and UKTI; private partners such as BBC, Microsoft, HSBC or Barclays; and international organization such as Unicef. Also, the British Council has set up a 4 year program (20112015) to reshape its overseas network, enhance its efficiency and respond to demand from new governments to increase opportunity and employability through English. By 2015, the British Council is willing to develop its digital English teaching and broadcasting to reach 100 million digital customers and viewers. It wishes to organize up to 9 million events, festival and exhibitions worldwide by 2015, out of which 5 would be devoted to arts. A special focus is given to the world’s poorest countries to develop primary purpose development. The BC developed a set of priorities for each of the continent based on the cultural, demographic and economic context. To foster education institution visibility worldwide, in the international education marketing framework implemented in April 2012, the British Council also developed services such as:
• Exhibitions, virtual exhibition events, and targeted marketspecific events to engage with prospective students and build links with local education providers and institutions
• Direct marketing (long and short term promotion strategy incountry) using advertising, social media, and event management.
The British Chambers of Commerce network of accredited Chambers oversea developed several services meant to foster UK enterprises visibility and network such as
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• events and exhibitions, such as inbound visits from companies seeking to buy or invest in the UK, • translation services and multilingual marketing material, • Export clubs and international networking
GERMANY The GoetheInstitute is an autonomous and politically independent nonprofit German cultural association operational worldwide, promoting the study of the German language abroad, providing information on German culture, society and politics and encouraging international cultural exchange and relations. Much of the GoetheInstitute’s overall budget consists of yearly grants from the German Foreign Office and the German Press Office. Goethe Institute organises events such as literature concourses, exhibitions, but also takes part into the local association network, giving grants to support local projects aiming at fostering democratization and human rights. The Max Weber Foundation is a research organization financed by the public sector which promotes research and scientific dialogue, concentrated around the areas of social sciences, cultural studies and the humanities in France, UK, Russia, US, Japan, Lebanon, and Turkey. Furthermore, Germany has engaged a strategy to promote the country as a location for higher education, research and innovation in important target countries, called “Research in Germany”, Germany Land of Ideas” and “Invest in Germany” with the support of the Chamber of Commerce, Germany Trade and Invest, German international Enterprises, academic and research institutions in order to give a positive image of Germany abroad and inboard. German Trade & Invest also contributes to spread a positive image of German industry and enterprise by organizing and participating to several large scale conferences held in Germany and around the world. They offer German enterprise the opportunity to present their activities during showcase. Also, to promote the German industry, German Trade and Invest recently set up a web channel, Smart News, on his web site and on the social media, with podcasts in English.
SPAIN:
The Cervantes Institute is a worldwide nonprofit organisation created by the Spanish Government in 1991. It is the largest organization in the world responsible for promoting the study and the teaching of Spanish as a foreign language and the Spanish and Hispanic American culture in over 20 different countries with 54 offices.
“A “brand” helps to identify much more than just goods and services; a brand is also synonymous of country identification” says the Spanish Ministry of industry, Tourism and Commerce. With this idea in mind, the Leading Brands of Spain was created in collaboration with public organizations such as the Cervantes institute, the Ministry of Foreign Affairs, or the Spanish Tourism Institute, the Spanish Institute for Foreign Trade but also the private sector represented by the Leading Brands of Spain Association (AMRE) or the Spanish Exporters and Investors Club. This initiative is aiming to promote all assets representing Spain abroad through the diffusion of information such as Spain in Media, Spain in sport, Spain and tourism, Spanish Brands in different sectors embodied in a book. The publication covers the “success stories of the leading Spanish brands, making them ideal tools to promote the key Spanish brands internationally”. It is edited in Spanish, English and Mandarin. Biannual Spanish Brand Ambassadors are also named, in recognition of their ethic, innovative ideas, good practices, or their involvement in Spanish culture promotion in order to carry out Spanish Image abroad.
ITALY
The Istituto Italiano di Cultura is a worldwide nonprofit organization established by the Italian Government one year after the University of Perugia. Its purpose is the promotion of Italian culture and Italian language teaching worldwide. It supports the work carried out by the Italian Embassies and
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Consulates by organising cultural activities and events. There are ninety Italian Cultural Institutes throughout major cities around the world, such as Paris, London, New York, Sydney, Buenos Aires, each Italian Cultural Institute is the Cultural Section of the Consulate General of Italy in that city. A private society founded in 1889, The Società Dante Alighieri, also promotes Italian culture and language around the world.
In order to promote Italy abroad, several National missions involving politicians, entrepreneurs, and universities, or Confindustria have been organised in Turkey, China, India, and Mediterranean countries over the last few years. More recently, in July 2012, in the Ministry of foreign affairs was held a meeting to discuss an 'International Italy” strategy which would aim at boosting the growth of the Italian economy, by ensuring the coordination of all activities to promote internationalization of Italian production abroad. This meeting was attended by the Minister for Regional Affairs, Tourism and Sport, the Minister for Agriculture, Forestry and Food, the President of the Marche Region representing the Conference of Regions and Autonomous Provinces, and for the private sector, the Presidents of Confindustria, Unioncamere, Italian Network Enterprise and Alliance of Italian Cooperatives and the Executive Committee member of ABI.
2.3 POLICY OPTION There is a need of public intervention reorganisation regarding the fragmentation of actors and initiatives which is likely to generate negative added value. Then we need that anyone involved in the promotion is paid for, selected, upgraded on the basis of objective and measurable results. Then, we will need to: Select the fields on which to build international projects based on the greater potential of the country; Benefit from the Diaspora throughout the creation of an Italian talent network abroad in order for
them to find in high impact projects the opportunity to “reconnect” with Italy and to act as Ambassadors of other talents. Private investments from the corporate and support for exchange programs and training at the international level should be encouraged; Improving cooperation between the Ministry of Education, the Embassies and the Consulates, and building an international network of researchers. As for what we put forward to increase “hard attraction”, these measures must be preceded by the design of marketing tools that are to become assets for anyone who wants to promote the Italian system in the middlelong term. What projects to bet on in order to rebuild a positive image of Italy and what image to diffuse? What segments of foreigners do we want to involve regarding the projects to set up and what are the factors of aggregation? Even on such strategic issues, there is a lack of knowledge think tanks or universities could help fill.
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CONCLUSIONS Open to discussion