CHAPTER 1

The Talent Wars

For a serial kidnapper, [the government headhunter] Philip Yeo looksharmless enough. But to hear some people tell it, he's a dangerous man.Over the past six years, Yeo has been roaming the world, trailing talentedscientists in Washington; San Diego; Palo Alto, Calif.; Edinburgh andelsewhere, and spiriting them back to his home country of Singapore.

—Time magazine

THE BALANCE OF THE BRAINS

"TALENT HAS BECOME the world's most sought-after commodity,"declared the Economist in 2006. Since then, the war to acquire talent hasbecome even fiercer. As the workplace has changed, the global economiclandscape has flattened. In the not-so-distant past, the developing world,including China, India, Brazil, Eastern Europe, and the Persian Gulfcountries, supplied cheap labor, while North America and a handful ofEuropean countries dominated the high-end labor market. But notanymore! The so-called Third World is catching up and presentingunprecedented challenges and competition. One indication of thesechanges is that, despite past traditions of lifetime employment andworker loyalty, the "stick rate"—the length of time hired candidates stay attheir jobs—is now lower in Asia than in the United States and Europe.

Like venture capitalists (or vulture capitalists, as some managersperceive them when these investors are poaching their best workers),countries around the world are engaged in intense efforts to draw talent.Singapore, a rising high-tech hub in the global arena, has an internationaltalent division within the government charged with finding ways to attractthe most highly qualified people from abroad. Philip Yeo, characterized asthe "serial kidnapper," heads Singapore's international talent division.More than a headhunter, Yeo prefers to describe himself as "a peoplesnatcher." In an interview Yeo describes the changes in the Americanmarket atmosphere which help Singapore lure talent: "In the past,America was like a Golden Mountain. Now it is very forbidding. Everyforeigner is a threat, and the whole atmosphere is changing." In his bookInnovation Nation John Kao calls for more attention to "the art of seduction"in global competition. According to Kao, talent is being lured toup-and-coming regions at alarming rates. New competition from Europeand the East has led the sociologist Richard Florida to sound similarlysevere warnings about the United States becoming "a second-rateeconomy that cannot deliver economic opportunities for the vast majorityof its people or the social welfare of Western European countries." And allthe warnings point to one country that seems to be leaping forward tosoon take over the lead as the world's strongest economy—China.

In January 2011 President Obama evoked the image of a new ColdWar. As in 1957, when the Soviet Union launched the first earth-orbitingsatellite, Sputnik, the United States now risks watching passively as a newempire, China, slowly but steadily becomes the dominant superpower inthe global economy. Obama warned that China has "the fastest trains andthe fastest computers in the world." And estimates abound that in just afew years other countries, not only China, will surpass the United Statesin vital technological fields. To catch up and take the lead, the UnitedStates must become more innovative in every field. The day after Obamamade his remarks then Senator John Kerry reiterated and elaborated onthe meaning of using the historical iconic image of the Soviet Sputnik forthe twenty-first-century challenge of innovation: "We need R-and-D; weneed science, technology, engineering, and math. We need to kickAmerica into gear. This is our Sputnik moment. We've sort of seenSputnik going across the sky, but we've done nothing similar to what wedid in the 1960s to respond to it."

The Cold War's balance of power focused on a nuclear arms race, butmodern international competition focuses on talent. And it is not justhigh-tech, biotech, and information markets that simmer with nationaland international movement. In The Flight of the Creative Class Floridawarns that the nation's talent base is weakening in every field of thesciences, art, and economics ventures. Although American universitiesdraw talented foreign students, many no longer seek to stay and work inthe American market. According to the National Science Foundation,about half of the doctorate degree holders currently working in the UnitedStates in the fields of science, engineering, and computer technology areforeign born. Yet now we can no longer rely on the best of the best stayingin the country as they begin their professional careers. In a dark ending tohis latest book, The Reset Economy, Florida gives even stronger warnings:"We can then expect an ever-increasing malaise and depression in ourR&D laboratories, ennui and apathy in our factories, and increased crimein our streets." Other authors, such as Amy Chua in her controversialBattle Hymn of the Tiger Mother, have further played into our fears of thenew Sputnik-like rivalry with China to promote their tough-love style ofparenting and careering. In her book Chua maintains that the Chineseparent their children in ways superior to those of Western parents, leadingto a clear competitive advantage in the race for academic and professionalsuccess. In reality, the prognosis is not as grim as that of Florida, and theright cure is not as radical as that of Chua. Western parents certainly neednot concede that they have become, in the words of the former governorof Pennsylvania Ed Rendell, "a...