Digital Visas Disrupt and Intensify the Race for Human Capital

If 2020 was anything to go by we are likely to see an even more dramatic global shakeup in the league tables of choice destinations in 2021. In late November as the pandemic’s second wave crashed across the global north, Bloomberg unveiled its Covid Resilience Ranking of “the best and worst places to be in the coronavirus era”. The index formally acknowledged what 2020 had made abundantly clear to the world’s upwardly mobile: Advanced economies such as the UK and the US had been repeatedly overwhelmed by infections. Meanwhile, other countries — even developing nations — defied expectations. For these and other once-desirable destinations such as Spain, Sweden, and Switzerland, this was an admission of defeat.

Bloomberg’s ranking, which cross-references quality-of-life metrics with post-pandemic measures such as positivity rates, lockdown severity, and mobility, underscores that for those with the means, we are all ‘global nomads’ now. Originally coined to describe a subset of technology workers drawing Silicon Valley salaries while camped in Chiang Mai or Bali, the moniker now effectively describes anyone with a Covid-induced mandate to work from anywhere — and thousands, if not millions, are pursuing pandemic arbitrage in their choice of destinations. The early evidence is clear, including record numbers of Americans who sought secondary citizenship in 2020, and Britons who rushed to secure EU access on the eve of Brexit.

...for those with the means, we are all ‘global nomads’ now.

But even as individuals choose to vote with their feet (and passports), the cracks are beginning to show in terms of global governance when it comes to attracting talented migrants. For instance, the European Commission has curiously chosen this moment to bring down the hammer on Malta’s and Cyprus’s investment migration programs, while hinting that Portugal’s and others’ real estate-driven ‘golden visas’ might be next on the chopping block. Meanwhile, this past year has seen the advent of a lightweight national alternative to secondary citizenship in the form of ‘nomad visas’, which entitle one to live and work in Europe’s Schengen Area for a year or more — so long as you earn offshore and spend locally. 

...what began as a long-mooted evolution of Estonia’s e-residency program, which was launched in 2015, rapidly evolved into an arms race to attract talent — with some havens safer than others.

During the height of the 2020 lockdown, what began as a long-mooted evolution of Estonia’s e-residency program, which was launched in 2015, rapidly evolved into an arms race to attract talent — with some havens safer than others. First-mover Barbados was quickly joined by Bermuda, Anguilla, Antigua, Costa Rica, Mexico, and the Cayman Islands in the Caribbean; in Europe, Estonia was followed by Georgia, Germany, Spain, Portugal, the Czech Republic, and Norway, with Croatia close behind, along with Dubai, as part of its reforms to make itself more attractive to Western workers. In each of these cases, visas might cost two-, three-, or four-figures dollar-wise, with corresponding income guarantees.

But with vaccinations now underway, the question is how the programs will evolve to exploit post-pandemic uncertainty and opportunity on the far side of the crisis. For example, while the nations mentioned above hedge their bets through low-cost, lightweight visas, the US will struggle under the Biden administration to reverse the damage of President Trump’s decision to temporarily suspend the H-1B program, which may have shaved as much as USD 100 billion off the market caps of America’s largest tech stocks by starving them of labor at a critical juncture.

In an indirect response, the Canadian federal government under Prime Minister Justin Trudeau announced plans to increase post-pandemic immigration to levels not seen in a century as part of an explicit economic strategy to revitalize the country. Nations around the globe are facing the same dilemma — how best to beggar my neighbor in terms of talent, both during and after the pandemic?

In light of these trends — the commingling of health and wellbeing, the crackdown on investment migration, and the race for talent — further upsets are highly likely, and perhaps it is high time for Thailand and Vietnam to outshine France and the US. As a start.

References

Bhattacharya, Ananya. “Trump’s H-1B Ban May Have Shaved $100 Billion Off America’s Biggest Firms.” Quartz Media, Inc., Quartz India, October 28, 2020.

Chang, Rachel, Hong, Jinshan, and Varley, Kevin. “The Covid Resilience Ranking: The Best and Worst Places to Be in the Coronavirus Era.” Bloomberg, November 24, 2020.