Research Tracks
Toward a Portfolio Theory of Talent Development: Insights from Financial Theory, Illustration from the Asia-Pacific (Gi-Wook Shin and Haley Gordon)
This project proposes Talent Portfolio Theory (TPT) as a new framework for studying human resource development. Drawing on insights from Modern Portfolio Theory in financial investment, TPT views a nation’s talent development as creating a “talent portfolio” composed of four “B”s: brain train, brain gain, brain circulation, and brain linkage.
TPT attends to how a talent portfolio, like a financial one, is diversified to minimize risk, and how diversification can be maintained via rebalancing. As such, TPT provides a framework that captures the overall picture of a country’s talent strategy and offers a lens through which to understand how a country changes or “rebalances” its talent portfolio over time.
We illustrate the utility of TPT with the cases of Japan and Singapore. In both these nations, human resource development was key to their economic rise, but their approaches to diversifying and rebalancing their talent portfolios took different routes, leading to divergent outcomes. We conclude by discussing the theoretical and policy implications of the TPT framework for studying and implementing talent development.
The full study based on this project is published in World Development Vol. 184. See also the related news article on the APARC website, A New Approach to Talent Development.
Rethinking Return Migration: Illustrations from China’s Brain Circulation and India’s Brain Linkage (Gi-Wook Shin and Kelsi Caywood)
Brain drain presents a serious challenge to less developed countries (LDCs), depleting their talent pool and hindering development. However, LDCs can counteract brain drain and regain “lost” human capital by repatriating skilled migrants, thus contributing to national development. The current literature based on the return migration paradigm stresses such repatriation (brain circulation), neglecting how skilled diasporic talent can contribute without permanent return through transnational social capital (brain linkage).
We propose a framework that accounts for both human and social capital offered by skilled diaspora members, treating circulation and linkage as distinctive yet intertwined phenomena. We illustrate the utility of the revised framework through a comparative analysis of India and China. Both these countries have witnessed the world’s largest magnitudes of high-skilled emigration, initially leading to brain drain but later providing developmental assets. China has focused on circulating back its overseas talent, while India has embraced transnational linkage without expecting the permanent return of its overseas talent. In addition, circulation has facilitated linkage in China, whereas linkage has fostered circulation in India.
We highlight our study’s theoretical contribution to migration research and offer policy implications for LDCs facing brain drain.
Diverging Paths in Talent Development: Lessons from Argentina and South Korea
At the turn of the 20th century, Argentina was heralded as one of the world's wealthiest nations. Today, it grapples with persistent inflation and recession. This project explores the paradox of Argentina's economic decline by examining the role of human capital in its development trajectory. We compare Argentina's experience with South Korea's, highlighting how the latter successfully accumulated human capital to achieve remarkable growth. Our analysis reveals that South Korea avoided the middle-income trap by developing a diverse and robust talent pool — a feat Argentina did not accomplish.
The Promise and Perils of Brain Circulation: Comparing the Macroeconomic Development of South Korea and the Philippines, Using Talent Portfolio Theory
In the 1960s, the Philippines outpaced South Korea’s economic development. Sixty years later, South Korea is a high-income OECD nation, while the Philippines remains a lower-middle-income country. What can explain this divergence?
Previous studies have approached this question through analyses of state and private business institutional investments or analyses of national “human resource” outcomes, including human and social capital. Nevertheless, there has been little synthesis between top-down (institutional) and bottom-up (human resource) perspectives.
This study applies the Talent Portfolio Theory (TPT) to comprehensively compare the macroeconomic development of the Philippines and South Korea in terms of institutional investments and human resource outcomes. TPT considers a nation’s talent development strategy a portfolio composed of four domains: brain train, brain gain, brain circulation, and brain linkage. A strong talent portfolio is diversified to minimize risk, and diversification can be maintained via periodic rebalancing.
South Korea and the Philippines rebalanced their talent portfolios in favor of brain circulation in the mid-20th century. Yet their different approaches to brain circulation generated differential long-term human resource returns. South Korea’s brain circulation focused on repatriating highly educated scientists, who drove economic development via technological innovation in domestic industries in the short term and supported state investments in brain train in the long term. The Philippines, by contrast, invested in labor export and the temporary circulation of professional workers. While this strategy has generated financial returns in the form of remittances, the human resource outcomes have been negligible and have not supported long-term economic development.
This study highlights the relationship between institutions and human resource outcomes and emphasizes the interactions between investments in talent development in shaping long-term outcomes.
