LONDON, June 2 /PRNewswire/ --

The UK will need to attract more highly skilled workers from abroad - both from the European Union and outside it - in order to secure the future of high technology, 'knowledge intensive' industries in an increasingly global world, a new report finds today.

The UK has to date been successful as a location for foreign investment, but a combination of increasing demand for 'knowledge workers', especially in IT, science, healthcare and technology fields, skill shortages among employers, and an ageing population, means policymakers must do more to ensure the UK remains an attractive place for highly skilled migrants to want to come.

A climate of hostility towards immigration in general has the potential to harm the ability of firms to attract skilled, talented people from abroad, the report warns.

Unlike low cost manufacturing which depends on access to the cheapest labour and production facilities, the availability of 'human capital' (the skills and aptitudes of people) is among the most important factors influencing location decisions made by multinational companies in industries such as financial services, the creative sector, professional services, high-tech manufacturing and business services (broadly 'knowledge intensive industries'). For these sectors, being able to access high skill labour from around the world creates a competitive edge and avoids the limits imposed by having a purely native supply of people. It would also sure up the UK's ability to attract foreign direct investment and as a place to do top-flight research and development.

Katerina Rüdiger, author of a new report, 'Towards a Global Labour Market?', says: 'Global firms need more global people - not just to fill shortages, but for the sake of enabling firms to innovate. The UK's best bet for making the most of globalisation is to tap the increasing flows of highly qualified people around the world. In an increasingly globalised world, international experience, combined with language skills and an outlook shaped by learning from other places, is increasingly important. The UK needs to be seen, along with the US, Canada and Australia, as being among the most open and attractive places for highly skilled people to want to move.'

'At present, despite the hype, numbers are relatively low - only 167,000 high skilled workers came to this country on official figures from 2005. Politicians need to actively make the case for highly skilled migration. The new points based system in the UK will not be enough on its own. Talented people want career opportunities, the chance to expand knowledge by working with the brightest and best, good salaries, and the creation of diverse and exciting cities.'

The paper argues that the debate about highly skilled migrants - broadly, those with graduate qualifications - is difficult to disentangle from the wider controversy about immigration. Politicians and policymakers in many developed countries are faced with the dilemma of being open to talent and keen for companies to attract the best people, while not appearing a soft touch on controlling their borders or indifferent to the plight of migrants without high-level skills, it notes.

Yet the shift to a 'knowledge economy' means soaring demand for knowledge workers around the world which is unlikely to be met from up-skilling native workers (important as this remains). In the EU 15, employment in knowledge industries has grown by 24 per cent between 1995 and 2004, in comparison to total growth in employment of only 1.1 per cent. Such pressures indicate intensifying competition for knowledge workers, especially in IT, science and technology related sectors.

The paper finds: - The principles of free trade have yet to affect the movement of people to the same extent as the trade in goods and services. While world trade volumes increased by a factor of seven between 1975 and 2005, world migrant stocks increased by about 2.5 per cent (there were estimated to be about 190milllion international migrants in 2005) Growth was highest between 1985 and 1995 rather than in the past decade. - In absolute terms, the UK employs the third largest number of migrants with professional and technical skills (715,000). The US has over 4.1 million and Canada 918,000. OECD nations average have an of 7.5 per cent of all highly skilled workers being migrants. The European average, however, is 1.72 per cent. - Indian nationals are by far the largest group of highly skilled migrant workers in the UK. In 2005, 45,000 came fro India, 25,000 from the US, 10,000 from the Philippines, 8,000 from South Africa and 6,500 from Australia on official records. - Under the previous work permit regime in the UK, 24.5 per cent of highly skilled migrants were ICT professionals, 13.1 per cent were service managers and 9.9 per cent were professionals in the healthcare sector.

Notes to editors

1. 'Towards a global labour market? Globalisation and the knowledge economy' by Katerina Rüdiger is available from The Work Foundation.

2. Katerina Rüdiger is available for interview.

3. In a previous report about migration, (Migration Myths: Employment, Wages and Labour Market Performance, David Coats, April 2008) The Work Foundation argued that increased levels of migration had been beneficial to the UK economy overall over the past decade. The new report turns its attention to the specific issues affecting more highly skilled workers (or 'knowledge workers').

4. Media enquiries to Stephen Overell on +44(0)207-976-3507 or +44(0)7970-765251 or Lucy Jeanes on +44(0)207-976-3508.

5. The Work Foundation is an independent research and consultancy organisation.

Media enquiries to Stephen Overell on +44(0)207-976-3507 or +44(0)7970-765251 or Lucy Jeanes on +44(0)207-976-3508