Everyone seems agreed that the one big crisis staring countries across the world in the face is the shortage of talent. The problem has been getting worse year after year. The West, particularly, is going to be the most affected.

Over the next few years, the rising talent crunch in most of these countries is going to force them to either revise their immigration policies or raise the retirement age for their workforce. As things stand, the former option seems the more likely one that they will choose.

Sample this. Italy will lose 28% of its population by 2050. In order to maintain its working age population, it will have to start importing more than 350,000 immigrants per year or, alternatively, keep citizens working until the age of 75.

The situation’s not much better in other countries. Sweden will be faced with a shortage of more than 240,000 skilled workers in the next few years, mostly in the education and healthcare sectors. A survey carried out by Manpower International shows that 40% of Norwegian employers have problems finding enough labour. And, according to the Institute of German Economy, Europe’s largest economy lost more than $5bn in value in 2006 due to a shortage of engineers alone. Some 48,000 engineering jobs went unfilled that year.

The ratio of older inactive persons per worker is expected to almost double from around 38% in the OECD area in 2000 to over 70% in 2050.

In many parts of the world, fewer people will be entering the workforce in the next 20 years. Flattening or declining birth rates in many countries will mean fewer young people entering the workforce, in turn affecting their economies’ abilities to sustain growth.

Moreover, as life spans lengthen, those active in the labour market will be insufficient to generate the wealth needed to sustain those who have retired or are economically inactive and the living standards to which they have become accustomed – or at least aspire to.

While the near-term solution to this might be to offer incentives to workers to stay longer in the workforce, employers will have to look to new talent markets to meet their needs. This would provide countries with growing populations a huge opportunity. And that’s where India will come in.

The country boasts 16 million university graduates, adding 2.5 million new ones every year. That’s 1.5 times the number of China’s fresh graduates and almost twice that of the United States.

The states of Kerala and Punjab have already proved that non-resident workers can make huge contributions to their home states. Take Kerala. With a non-resident population of 1.8 million people working overseas, the state received Rs 24,000 crore by way of inward remittances in 2006-07. This was about 20% of the state’s net domestic product and 30% more than the state’s annual receipts. So while Kerala makes no significant contribution to the country’s GDP, it still boasts one of the highest standards of living.

India’s annual inward remittances in 2006-07 stood at $27.2bn, nearly two-and-a-half times that in 2001-02 when non-resident Indians remitted $11bn home. This year, inward remittances are expected to cross $30bn. And, interestingly enough, India accounts for one in every ten dollars remitted home by immigrants worldwide. By the year 2015, this figure could well be over $50bn, making inward remittances, or, talent export, one of our biggest export constituents. And, I’m not even including the Foreign Direct Investment into India from wealthy Non-Resident Indians, which, by then, could be in the region of $9-10bn.

The trend of more and more Indians moving overseas in search of better paying jobs and improved quality of living will continue never mind the reverse brain-drain we’ve been witnessing over the last 7-8 years. Also, considering that more than 150 million Indians will look to enter the country’s workforce over the next 10 years – and the corporate and public sectors in India clearly unable to accommodate all of them – many of them will move overseas.

But if this trend must hold, India will need to invest much more in education. Public expenditure in education has never crossed 4.5% of GDP despite the target of 6% having been set by the Kothari Commission way back in 1968. But even 6% may not achieve the desired results.

We need to invest significant amounts in educational infrastructure and curriculum. The Indian Institutes of Technology, the Indian Institutes of Management and Regional Engineering Colleges have already made an example of the quality of education and training that we are capable of imbibing. We need to move this down the food chain.

India needs to invest more in Industrial Training Institutes and other educational institutions if our growing talent base must hope to corner the hundreds of thousands of jobs that will fall vacant in OECD markets in coming years.