Europe is underachieving in the global competition for talent and the EU should reform its legal labour migration policies to get its fair share of the global talent pool, according to a new report published by the OECD.

Setting aside the immediate refugee crisis, the long-term competitiveness of the EU and its ability to move to a strong and sustainable growth path is at stake unless the EU addresses the challenges related to the management of legal labour migration in Europe, the OECD says.

Migrants to the EU are younger and less well educated than those choosing other OECD destinations. Of the total pool of highly-educated third-country migrants residing in EU and OECD countries, the EU hosts less than one-third (31%), while more than half (57%) are in North America.

Some progress has been made in the past decade, with a sizeable increase in the share of highly educated among recent migrants — from 21% of the total in 2000 to 36% in 2011. But this is still less than received by North America (41%) or Australia and New Zealand (52%).

And Europe is experiencing a decline in the overall number of labour migrants in the aftermath of the global economic crisis — from more than a half million in 2008, to less than 250,000 annually since 2012. This contrasts with stable flows to other OECD destinations. But more importantly, many labour migrants are not coming to the EU under programmes for skilled workers.

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Among those who do, most come under national schemes, since the EU Blue Card is hard to obtain. Only about 10,000 new arrivals would have qualified for the EU Blue Card in 2014, and of these, just 5,000 received it. In total, EU member states covered by EU legal migration policies received annually less than 80,000 highly qualified migrants.

By comparison, Canada and Australia have annual admissions under their selective migration programmes for highly-qualified workers of 60,000 each.

Belinda Pyke of the EU's Directorate-General for Migration and Home Affairs said: “The EU needs to address demographic decline and shortages of specific skills. Talent from outside can help the EU deal with these challenges.”

Global Talent

The report identifies three main channels through which the EU can help make Europe more attractive for global talent. First, the EU should adapt its labour migration channels to ensure that talented foreigners can choose Europe over other destinations. As is being proposed by the European Commission, the EU Blue Card should be expanded by lowering the wage threshold, notably for youth, says the report.

Second, the EU should simplify procedures and processes which are currently an obstacle to attracting and recruiting talents. Recognition of foreign qualifications should be simplified. Existing national good practices such as “trusted employers” can be incorporated into EU schemes and extended across Europe. A single application platform for labour migration would also help, while maintaining decision making at national level.

Third, the EU should reinforce the single labour market for highly qualified third country nationals. As is being proposed with the reform of the EU Blue Card, provisions for intra-EU mobility for talented workers should be strengthened to present Europe as a single labour market for global talent, and to help employers offer an enticing package to potential recruits abroad.

EU labour migration instruments need to be part of EU external action with third countries (such as training, mobility and recruitment initiatives). The EU could do a better job in branding itself as a single destination and in advertising options for the highly qualified third country nationals, the report concludes.

The report is part of a joint research project by the OECD and the European Commission in response to objectives set by the Juncker Commission in 2014 and examines the shortcomings which limited the uptake of the EU Blue Card scheme, in preparation for the Blue Card reform proposals being presented to the Commission this month.