As nations grapple with an increasingly competitive global talent landscape, a new study, published in the journal World Development, suggests that countries should rethink their approach to developing, attracting, and retaining talent. To address the need for a more complete understanding of cross-national variation in talent development strategy, the study proposes Talent Portfolio Theory (TPT), a novel approach to studying and improving human resource development.

The researchers, Stanford sociologist Gi-Wook Shin, the William J. Perry Professor of Contemporary Korea and the director of APARC and the Korea Program, and Haley Gordon, a PhD candidate at Stanford’s Department of Sociology, draw on the principles of Modern Portfolio Theory, a well-established framework in financial investment literature, to propose a new framework for talent development.

The new framework, TPT, views a nation’s talent strategy much like an investment portfolio, emphasizing the importance of diversification, risk management, and rebalancing. Shin and Grodon examine Japan and Singapore as case studies to illustrate how the TPT approach can help scholars, policymakers, and businesses better understand and optimize talent development strategies.

The study is part of the Talent Flows and Development research track of the Stanford Next Asia Policy Lab (SNAPL). Housed at APARC and directed by Shin, SNAPL is a new initiative committed to addressing emergent social, cultural, economic, and political challenges in Asia-Pacific nations through interdisciplinary, policy-relevant, and comparative research.

A Fresh Perspective on Talent Development

Talent development has long been a priority for nations aiming to boost economic growth and compete globally. Traditionally, countries have focused on building human capital — developing skills and education among citizens — and social capital — strengthening networks and relationships that facilitate cooperation and innovation. Existing strategies, however, often overlook the interconnected nature of various talent flows, including the movement of domestic talent, international talent, and diaspora engagement.

Just like financial theory evaluates a given investment (and its risk and return qualities) by how it impacts a portfolio’s overall performance rather than in isolation, TPT treats talent as a portfolio composed of four key elements, known as the “four Bs”: brain train (domestic talent development), brain gain (attracting foreign talent), brain circulation (movement of talent between home and abroad), and brain linkage (engagement with diaspora communities).

“In the study of national talent development, it is imperative to consider both the human and social capital facets of talent, as a country has multiple layers of talent available for use – domestic, diasporic, and foreign – each with different human and social capital potentials,” write Shin and Gordon. They propose TPT as “a better framework for illustrating and comparing different experiences and impacts of talent development at the national level, which is also key in offering policy prescriptions for human resource strategies.”

Insights from Japan and Singapore

Using Japan and Singapore as case studies, the authors demonstrate how countries can apply TPT to manage their talent portfolios. Japan's economic growth relied on two tiers of human capital: top-level scientists and engineers who adapted and integrated foreign technologies for domestic use, and skilled workers who grasped the fundamentals of these adapted technologies and carried out the manufacturing processes. With limited prospects for brain gain, circulation, or linkage, Japan developed these two layers of its workforce by relying on brain train, cultivating domestic talent for its industrial development.

In the early 1990s, however, Japan’s economy ran into trouble. Its system of brain train was well-suited for driving incremental innovation, but it became restrictive in the rapidly evolving landscape of the early 21st century, which demanded more disruptive innovation. “The Japanese model of human resource development necessitated a robust supply of domestic manpower which now became increasingly difficult to sustain, and a shrinking working-age population also meant labor shortage and reduced productivity,” say Shin and Gordon. “In the language of TPT, Japan urgently needed to diversify its talent portfolio beyond its reliance on brain train to address new risks.”

Recognizing the risks of a skewed talent portfolio, Japan began to rebalance its talent portfolio in the 2010s but has struggled with demographic decline and a slow pivot toward international talent. Despite efforts to internationalize higher education and attract foreign talent, Japan’s diversification of its talent portfolio has been stagnant and was hard hit by the COVID-19 pandemic.

In contrast, Singapore’s approach showcases the benefits of a well-balanced talent portfolio. The city-state’s aggressive pursuit of foreign talent (brain gain) and robust engagement with its diaspora (brain linkage) have made it a leader in global talent strategy. Singapore’s government has continually adjusted its policies, actively rebalancing its talent portfolio to maintain a competitive edge.

Singapore started rebalancing its talent portfolio in the 1990s, not only enhancing its efforts toward brain train but also expanding brain gain by internationalizing higher education and actively promoting a “work-migration” path. In tandem with its brain gain initiatives, Singapore also turned to its diaspora, fostering brain circulation and establishing stronger brain linkages. Through concerted efforts by the government and industry, Singapore has successfully produced and attracted creative talent that allowed it to remain globally competitive.

“Talent Portfolio Theory enables a holistic understanding of the various components of Singapore’s talent strategy and its evolution over time, from the country’s focus on brain train during its catch-up phase to its rebalancing with a successful brain gain, in addition to more recent forays into brain circulation and brain linkage,” Shin and Gordon explain.

Toward Fostering Cultural Diversity

TPT offers a powerful framework for crafting more resilient and adaptive talent strategies. As the global competition for skilled workers intensifies, understanding the dynamics of talent portfolios can help countries mitigate risks, capitalize on opportunities, and avoid the pitfalls of overly narrow approaches to human resource development. For instance, countries experiencing demographic decline, like Japan, can look to Singapore’s model of timely rebalancing as a guide for policy adjustment. Businesses also stand to benefit from TPT. The framework encourages companies to look beyond the availability of local talent and consider the broader talent ecosystem, including international talent flows and diaspora engagement.

Shin and Gordon emphasize that structural and sociocultural factors often limit policy options for building and rebalancing talent portfolios. Japan and Singapore illustrate that developed countries with abundant domestic opportunities are better positioned to retain talent and attract brain gain, whereas developing countries often experience talent outflows, favoring brain circulation or linkage (as seen in China and India). Additionally, while ethnically homogenous countries like Japan may prefer to rely on domestic and diasporic talent, multiethnic countries like Singapore can better attract foreign talent and engage in brain gain.

The contrasting experiences of Japan and Singapore underscore the critical importance of fostering cultural diversity to attract foreign talent. Singapore’s success with brain gain, compared to Japan’s more mixed outcomes, largely stems from its multicultural environment, shaped by policies that protect minority rights and actively promote respect for diverse ethnic groups. To remain competitive in the global talent market, countries must prioritize sociocultural policies that cultivate openness, tolerance, and diversity. By embracing these values, nations can attract the best and brightest minds, ensuring their place in a rapidly evolving global economy.

My summer internship experience at the Asia Society Policy Institute (ASPI) was remote due to the pandemic. It was nonetheless a memorable experience as I got to explore cybersecurity issues around Southeast Asia. ASPI is a think-tank under the umbrella of the Asia Society family, which aims to explain the diversity of Asia to the United States and the complexity of the United States to Asia. It heightens understanding between the two regions and tackles major policy challenges confronting the Asia-Pacific in security, prosperity, and sustainability by providing solution-oriented recommendations and ideas for such challenges.

At Asia Society Policy Institute (ASPI), I delved into policies and developments around the data privacy issue in Malaysia, Indonesia, Vietnam, Thailand, and Singapore. I learned how these countries bring up policies and collaborate bilaterally, regionally, and globally to tackle problems around cybersecurity. My summer internship experience also enriched my knowledge and understanding of the world.

Working at ASPI

The internship started in June 2021, around the end of the spring quarter, and continued through the end of summer. There were a total of four interns in the Washington D.C. office. I mainly worked with a small team of three - Elina, my supervisor, Chris, my co-intern, and I - which focused on cybersecurity issues.

My supervisor, Elina Noor, an inspiring expert in cyberspace, especially in the Southeast Asia region, led the team with great insights and leadership. Along with my co-intern, Chris, we spent the entire three months working on a project that studies Ethical Artificial Intelligence (AI) and Data for Inclusive Development in Southeast Asia. The project itself is expected to continue for a year, and we were in the early stages of the project. 

As a security research intern, I collected data and assisted the research. Additionally, I focused on building-up fundamental understanding of the project - determining the stages of development each country is in, how they respond to the global trend and issues, and what criteria need to be included in analyzing the different characteristics of each country, considering both the local context and the global trend. In the next nine months, the project will survey countries’ positions on these issues, assess the importance and impact of the topic, and highlight the significance of engaging in international developments. I am excited for the final product to come forth, a collaborative work of all people involved in this project.

Other responsibilities also came along the way. I had the opportunity to find the correlation between the South China Sea dispute and cyber incidents between the countries claiming sovereignty over the region. These incidents are ambiguous to identify, and the attribution is not always clear. It was also challenging to make a data set from scratch as it was a whole new experience. However, I managed to conclude that cyber incidents spiked around the time of the major disputes around the South China Sea. No secret that the Global Economy class taught by Professor Aturupane from Fall 2020-21 helped me make sense of the data set and read graphs!

The interns in the New York and Washington D.C. office took turns doing daily press scans, following up with news from the Northeast to the Middle East. It was amazing to learn how Asia, as one big continent, held such a diverse set of news and events occurring each day. I also accumulated lists of people in congress, embassies, and the government to share the op-eds from ASPI. Most of these administrative works were done as a team effort, and I met a larger ASPI family through the experience.

Ending My Internship

Working at ASPI was a rewarding way to spend my summer. I owe special thanks to Elina and Chris, who were incredibly supportive and made me feel like I was making a significant contribution to the institution. I was also rewarded with knowledge and insights into new topics in Asia and its relations with the world, mainly focusing on the U.S. It provided great insight into the developments of cybersecurity issues and data privacy around Southeast Asian countries. It was a fantastic opportunity to apply what I learned at Stanford to real-world policy problems. I thoroughly enjoyed my internship this summer and feel ready to embark on new challenges that will come forth in my career path.