Talent Economy And Capital Flows
The most recent financial and economic calamity is dramatically reshaping the world. I argue that this reset is ushering in the Talent Economy, signaling the decline of the Knowledge Economy. I'm on the look out for data that can be used to support my theory. A story about the importance of remittances:
Remittances are not just big, but growing—they have nearly quadrupled since the turn of the millennium—and resilient. In 2009, when economies around the world crashed, remittances to poor countries fell by a modest 5%, and by 2010 had bounced back to record levels. By contrast, foreign direct investment in poor countries fell by a third during the crisis, and portfolio inflows fell by more than half. "The most remarkable thing about remittances today is their continued growth, year after year, despite the global economic crisis," says Dilip Ratha, head of migration and remittances at the World Bank.
These numbers are encouraging. Global migration is spurring capital flows that rival those often associated with the Knowledge Economy era of globalization (e.g. FDI.). The article does raise a number of issues that cast some doubt on the data. Our account of things is only beginning to catch up with the dynamic Talent Economy. Think the rise of the metro and the issue with state-centric data.
That caveat aired, international migration is driving economic development at a time when conventional finance is gummed-up. I think remittances are a good indicator of growth for the Talent Economy. Domestically, metro or county import/export of household income is more appropriate given the lack of internal borders. A city's ability to boost earnings is a measure of its health and attractiveness. People develop, not places.