Economic hegemony will move to Asia

Europe has become a nice place to live now that we've learned to stop fighting each other. There is culture, fine food and wines and a tolerant society. There are even some pretty impressive achievements in business: after all, the European Union is the only economy currently on a par with the Americans and the euro has become a safe-bet currency for investors looking to avoid the sickly dollar.

But Europe's days of real greatness are behind it. I do not believe that economic and cultural hegemony will re-cross the Atlantic as the US falters, returning to the region that dominated the world in the second half of the second millennium. Rather, hegemony will continue moving west, crossing the Pacific to Asia, and Europe's primary contribution to the twenty-first century is likely to be the lingua franca of business – English, although the French will never admit it!

This rather depressing realisation came to me as I was sitting through a debate held by business leaders and academics in Munich last week. The topic for discussion was "brain drain and brain gain", which is the polite way of saying "what do we do about immigration and emigration".

The mature countries of Western Europe are getting smaller as their populations age and birth-rate drops. Attracting skilled workers from other parts of the world – and other parts of Europe – has, therefore, become vital to continuing our economic growth. But when asked what the new breed of globally-mobile, skilled workers sought in, an employer, the representative of Nokia, one of Europe's largest companies, said corporate and social responsibility. I nearly choked on my Evian.

Corporate and social responsibility is the latest buzzword afflicting major Western corporations that feel guilty about being successful. It basically means being nice to plants and poor people, which is important but not as important as a pay cheque. I do not believe for one moment that prospective Nokia employees would forego a $10,000 (Dh36,700) pay rise so the company can meet its social responsibilities.

However, of more concern is what this statement says about the mobile phone maker. Does it really think that fuzzy promises to save the world are how to stay ahead in business? Does it really think it can attract the cream of the global workforce with something other than an excellent remuneration package? If so, it is time to sell the company's stock and buy Motorola. The man from Nokia was not the only business leader attending the Munich summit who seemed to believe Europe's social-democratic model was the way forward in the corporate world as well. I sat listening to the proceedings wondering what an American would have thought of it all: he would probably have launched a hostile takeover bid while the Europeans were wringing their hands and then moved all the work to India. Bankers and lawyers in Frankfurt currently earn just over half what their rivals do in London and New York so it is no wonder that these two cities can attract the best talent. If Europe really wants to compete in the knowledge economy it will have to accept that money is the primary means of attracting skilled workers in a global marketplace.

However, that is not to say that the socially responsible Europeans don't have a point. American executives work insane hours and I cannot imagine that their relentless commitment to the job creates the sort of work-life balance that is good for productivity. Indeed, I suspect that most Americans work far harder at looking busy than actually being busy.

Europe's concern for the environment is also important as it has triggered innovative thinking on how to solve problems such as global warming, and innovation is the root of growth. Just look at the automotive industry: American manufacturers in Detroit are losing money every second while their European divisions are performing well, having concentrated on fuel efficiency and contemporary design. So what can the Gulf learn from this debate over how to attract global talent? First, I'd say that there is no substitute for money. It is the primary reason people move and fortunately for cities such as Dubai and Abu Dhabi can lure some of the brightest talents in the world. But the Europeans can teach the Gulf something about creating an environment where people want to live. Efficient transport links, cultural activities, sporting events and affordable property are as important to continued economic growth as five-year development plans. Money talks but in the end, nobody wants to work in a vacuum.

David Robertson is Business Correspondent of the Times of London

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