March 2022. GrowthPolicy’s Devjani Roy interviewed William Kerr, Dimitri V. D'Arbeloff - MBA Class of 1955 Professor of Business Administration at Harvard Business School and Faculty Co-Chair of the “Managing the Future of Work” Project, on policies for attracting high-skilled talent, COVID-19 and the global workforce, and technological trends that are reshaping work. | Click here for more interviews like this one.
Links: Faculty page | Managing the Future of Work | Podcast | The Gift of Global Talent (book) | Google Scholar | Twitter
Past interviews on the topic of work: Joseph Fuller | Prithwiraj Choudhury | Ed Glaeser
GrowthPolicy: At Harvard Business School, you are Co-Director of the Project for Managing the Future of Work (MFW). What are some future trends in the world of work that you are excited about?
William Kerr: We started the MFW Project in 2017 with a focus on how technology and demographic changes are reshaping the workplace. We consider the implications for organizations and how organizations can prepare their workforces for required adjustments. We believe that companies can only act as fast as they’re able to bring their workers along and prepare them for the future of work.
Since the project began, we’ve been following how cognitive technologies, like machine learning and artificial intelligence, will combine with robotics to allow for increased use of technology in both physically and cognitively based non-routine tasks. On the demographic side, we’ve considered the implications of an aging population and a much more diverse workforce in the US and abroad.
COVID-19 has accentuated both of these trends. In the case of technology change, digitization in the workplace has increased: touchless screens and remote work are on the rise, and adoption plans for technology have been pulled forward 3-5 years compared to what they were before the pandemic began. On the demographic side, of course the population didn’t age any faster, but we did get a better understanding as to what the future workplace will look like. An aging workforce reaches far beyond more gray-haired workers. You also have workers with greater care responsibilities, both for children and also, increasingly, for elderly family members. COVID-19 really showed us the challenges that caregiving responsibilities bring into the workplace, and helped employers begin to understand how care packages in the future will need to be more accommodating.
GrowthPolicy: Your most recent book, The Gift of Global Talent: How Migration Shapes Business, Economy & Society (2018), explores the global race for talent and the ways in which countries compete for high-skilled immigrants. In what ways has the pandemic and the rise of remote work among knowledge workers transformed global talent flows?
William Kerr: The pandemic has significantly disrupted global talent flows. Part of that, beginning in March 2020 and continuing in spurts today, is short term—borders close, which reduces the possibilities of business trips and travel. Some of it, though, is longer term. People may be wary of going outside of their safe zones. People abroad for school or work are often, if borders close, unable to get back to their families, which can weigh against migration. There’s also the “missed moments”—windows of time in which someone was excited to do an educational or work opportunity abroad, but once that moment has passed due to the pandemic, it’s just not as salient anymore.
We’re still early in the process of learning what the long-term implications will be. I’ve been impressed with some of the capacities of remote work—our technologies have advanced to make it more viable, and we’ve also kind of figured out our routines. There are a number of settings in which adopting a hybrid mode permanently makes sense, and some places where work that was traditionally done in an office will become fully remote because there’s no longer any need for it to be co-located.
But place remains very important. Harvard University and Harvard Business School are certainly examples: there were some things that we’ve been able to do well in a remote format, but when it comes to many of the core missions of our school, people want to be [present] in person; they want to be there for the teaching and research. We learned new tricks as a result of the pandemic, and we will be more digitally savvy post pandemic, but it’s also not going to have fundamentally shifted the connection of our work to global talent. We need to keep an eye on the many adjustments happening and figure out how to take the best of both worlds.
GrowthPolicy: Immigration inflows to the United States have fallen by roughly two-thirds since 2017, according to Census Bureau estimates. The categories for skilled immigration, such as student visas and work visas, have declined precipitously. Where do you see us headed if this trend continues?
William Kerr: We’re obviously not on a good trajectory right now, which has implications for our schools, firms, and much beyond. Great talent all around the world seeks the best educational opportunities, which the US has historically provided. If that changes, that’s our loss, for both our universities and our firms. Our firms draw global talent both from our campuses through the educational pathway, and directly from abroad, giving our business environment great dynamism—entrepreneurship, innovation, patenting, and so forth. We’re not going to suddenly lose all of that capacity without global talent, but it’s been one of the most important levers over the past fifty years for us to grow our innovative workforce and to be at the frontier of venture-capital-backed startup companies and high-growth opportunities. So I hope that we’re able to reverse the trend.
We should recognize that the U.S. is still desirable for students and workers abroad, and there’s no place in the world that has as many opportunities that range from Miami to Seattle to Los Angeles to Boston and all the differences that they carry, but we need to make sure that we’re both executing good immigration policy and providing the right environment for migrants to be attracted to.
GrowthPolicy: Since the 1990s, one of the pathways open to skilled workers to seek employment in the United States has been the H-1B visa which is allocated by lottery, ties the foreign national to one employer only (the H-1B “sponsor”), and prevents foreign nationals from launching businesses, among other restrictions. Legal immigration has long been a complex issue impermeable to quick fixes. In your opinion, what are some solutions that policy makers can implement to avoid losing skilled talent to other countries?
William Kerr: I don’t like to give just a single answer about policy, because once you start tinkering with part of the system there are spillover effects on other parts, so I prescribe a cocktail of policies in the book. If I had to break down the most important things, I would first better prioritize who we’re selecting with scarce visas for skilled and employment-based work. There are a lot of ways to do this, but right now we allocate visas very crudely, mixing a lottery and a first-come, first-served basis. If we are going to have a fixed budget, we should use the visas for the best talent.
We want to also make sure that students are able to find opportunities to work in the country for a set period of time following their graduation. The system should allow, as many countries do, students who graduate from our schools to have the opportunity to work in our economy. Then, as people move from holding student-based visas to employment-based visas and onwards to seeking green cards, we could prioritize allocation. There’s a lot of further sub-details: A flexible cycle would be better; the current system is an annual process with lots of starts and stops. I would also set a minimum wage for H-1B workers, with a piggy bank of sorts to hold unused visas to times with greater demand.
One thing that I don’t mention in the book that has become more prominent is regional visas. For each state or region of the country, you could set aside visas for immigrants to work in those locations, and after some period of time, the worker can be more mobile through the country. Among others, Canada has a form of this in their immigration policy. It may not be the most economically efficient way to allocate visas—the best opportunities, the places that most need talent, could be just a few talent clusters.
But regional visas could be a way to build a political coalition for increased skilled migration, by creating a larger constituency for such policies. Small, rural states that don’t get much global talent can legitimately ask “what’s in it for them” when we increase immigration. Regional visas can be an answer to that question, and allow people to get an understanding and appreciation for the benefits immigration can bring to the local economy.
GrowthPolicy: You’ve long been at the forefront of speaking for the competitive benefits to the United States from skilled talented workers. In your op-ed in Nature (2018), you point out that “what will do most to scare global talent away is hostile political rhetoric.” The political rhetoric around immigration has seemingly worsened in the past five years. What, in your opinion, should be done about this?
William Kerr: This is very scary. The H-1B issue, traditionally, did not cleave on a Republican vs. Democrat line, though both parties are currently and increasingly aligned around immigration as a divisive issue. Remember that Republicans have often been the champions of business, and skilled immigration is a very business-focused policy, and there were some Democrats who were worried about some aspects of the H-1B program. Even more broadly, both Republican and Democratic administrations have sought to introduce immigration reform.
But today, all forms of immigration have become extremely polarized. I worry that every four years on election night in the U.S., we could have a scenario just like recent elections where you can’t predict with good confidence the winner in advance. In fact, it’s probable for some time to come, the outcome will be quite uncertain on election night due to a mostly evenly split country and our system that provides greater voice to smaller states.
Right now, a lot of skilled immigration is governed by executive order, and skilled immigration is a form of investment by the migrant. If there’s a lot of uncertainty as to whether a very staunch Republican, who may be very anti-immigration, or a very liberal Democrat is coming into power, that’s going to be a very uncertain environment—e.g., can I trust a work visa will be available in a few years when I complete school?—and uncertainty kills investment.
I hope we can find some ways to depolarize this issue, to make it to where it’s not always a legislative battle. As an example, the H-1B program has had a fixed size, and we debate about it back and forth for decades before it gets reset. It could instead be indexed to economic conditions in a way that would allow more flexible adjustment.
I think the most important element for the United States to retain its position as a leader in global talent, to ensure that it’s competitive in global talent for decades to come, is to make this stability attainable. We’re not the only country experiencing a demographic shift to an aging population. This is happening all through Europe and East Asia, where it’s often even more of a challenge than it is in America. As countries confront this enormous headwind, they are going to become more interested and willing to approach immigration as a hope of bringing in young talent. The US can’t sit on its leading position; it’s going to have to be even more competitive.