4 - best practices in FDI Canada and Singapore Flashcards
upward sloping virtuous circle of FDI and skill development - why?
FDI inflow create potential for knowledge and skill spillover further attracting more FDI
why is the positive impact of FDI flows not automatic?
government policies must be designed to impact skills
-> conceptual framework
what can the government do to attract FDI?
- FDI attraction stategy
- FDI targeting in education
- Education policies
- Migration policies
- skills dissemination policies
- national innovation system
Education policies
promote FDI attraction bc investors can satisfy their needs in term of HC easier AND high skill levels lead to higher productivity, raising the income/capita of the host country
migration policies such as ? what are the benefits?
temporary work permits, residence permits, procedures for visa to reduce the skills gap by allowing foreign workers to enter
what can be difficulties in terms of migration policy?
finding the right balance between offering the investors the necessary staff and national interest in terms of job protection
why are dissemination policies important and what do they include?
- active programs where foreign companies directly train local workers -> knowledge and skills spread as workers change jobs
- promoting technology sharing with partners and involving local managers in senior roles -> can also help spread skills
national innovation systems - why is it important and how can it be improved?
Interaction between companies are crucial for transfering skills and technology -> policies to improve networking of firms, research centres, universities, ..
for a country at an early stage of development, what shoudl be the main focus ?
improve your national education infrastructure to attract FDI
compared: developed countries have a strong domestic skill base
how was the approch of Canada tring to attract FDI
identify the affected sectors (in terms of high productivity and high growth)
then select the target countries
in the case of canada companies were chosen bc the sectors were more
skill-oriented than others and that’s what canada hat to offer
why is canada a good example for successfully implementing attracting of FDI?
bc of its 1) educational system
2) migration policies
3) disseminating FDI-related skills
what is different to other country’s migration policy?
canada’s immigration programm has an emphasis on economic migration and skilled workers
based on education, skills, language ability, age, business experience
how does the general migration program in Canada work
giving foreign companies investing in Canada the opportunity to directly sponsor foreign workers
what benefits can derive from this policy
the foreign workers often settle down in the country permanently, contributing to the country’s skill base by combining their acquired HC with canadian work experience
name 2 programs/agreements affecting migration policy and describe how
NAFTA (North American Free Trade AGreement) -> relatively free flow of labor acrosst the border (when they fit within a list of prescribes occupations + intracompany transferees temporarily recieving training or skills upgrades)
PNP (Provincial Nominee Programmes) ->provinces can nominate skilled foreign workes to accelerate the entry
further explain the PNP
main reason is providing a targeted response to provincial employers and potential investors.
but also promotion of population growth in isolated regions
Regarding Disseminating FDI-related skills: what is the strongest contribution of FDI to skills upgrading
positive contributions of FDI to domestiv HC.
Strongest contribution through pressure it puts on supplier to extend the use of technology and upskill theit workers
show another benefit deriving from FDI in terms of HC
Senior foreign executives (Führungskräfte) leaving the company that sponsored the entry and going to major companies in canada
what are the main 5 lessons on how to integrate FDI in the skils development process
1) there is no single model to skills development
2) government educational investment is critical for building a strong skills base
3) Encourage foreign investors to directly invest in education, particularly in areas of skill shortages
4) attractforeign investors in skill-intensive industries. Focus on matching FDI with current skill levels and realistic skill targets
5) Consider policies that promote the dissemination of foreign skills to the local economy
explain how the government educational investment is so critical for building a strong skills base
- it can identify skill shortages and continously evaluate human resource development policies and translate them into targets for the education system
- ensure that the content of local education meets the needs of foreign investors
why encouraging foreign investors to directly invest in education?
public investment in education most important driver of HC but private investment and FDI can improve domestic education significantly through funding efforts and acting ask magnets for international talents further contributing to national skill base through knowledge spillover
why attracting investors in skill-intense industries?
incentives can be the first step to initiate the FDI-skills virtuous circle
-> job creation and higher wages
-> technology transfer and innovation
-> enhanced global competitiveness
-> human capital development
-> economic stability and resilience
