When people of the highest productive and intellectual potential leave a country in great numbers, that country will find it more challenging to maintain a high intellectual and academic standard.
It is because these individuals are the vital driving force to create a more educated and professional society, as well as develop other talents.
Therefore, this dynamic will create a country's starvation of talent replacement and further shrink national aggregate creative potential, making the country lose its competitive edge to more developed nations, and slow down its development and industrialisation.
Besides that, a shortage of highly skilled workers negatively impacts the availability of complementary skilled workers, less-skilled workers, entrepreneurs, and capital providers.
After all, it is the brightest, highly skilled individuals who create new business opportunities in the economy at pace with global industrial development.
At the same time, foreign direct investments (FDIs) are always hungry for home economies whose industries are densely infused with professional and highly skilled individuals, especially in tech, as with the latest trend.
The need for a highly skilled tech-savvy workforce will only increase in the current and future global job market as the world is forging ahead with the Industrial Revolution 4.0 and soon 5.0.
A deficient pool of highly skilled individuals, who are key creators of start-ups and a thriving digital ecosystem in the economy, significantly shrinks the country's potential to attract FDIs and, therefore, economic development. This brain drain can affect the country's currency, and this fundamental weakness is what we see in the Malaysian Ringgit. Perhaps, remote working and digitalisation could be a positive trend in addressing the talent shortage due to brain drain.
The pandemic has shown us a potential for a hybrid model of remote working, but it might be somewhat limited.
A recent survey by McKinsey of 800 corporate executives worldwide and across all industry sectors found that the potential for remote work is highly concentrated among highly skilled, highly educated workers in a handful of industries, occupations and geographies.
We need to factor in two aspects while evaluating the potential for remote working.
First is the theoretical potential for work to be done remotely determined by the extent to which there are tasks that require on-site physical presence, use of specialised machinery or equipment or, face-to-face collaborations.
The second is effective potential or how effectively the work is done remotely.
McKinsey found that among the occupations that have the highest potential for remote work are finance and insurance (76 to 86 per cent of the time can be spent remotely), management (68 to 78 per cent), professional, scientific and technical services (62 to 75 per cent), and IT and telecommunications (58 to 69 per cent).
These are the areas under the hard-to-fill Critical Occupation List by TalentCorp. Therefore, remote working may help Malaysia, at least to some extent, to fill in those hard-to-fill vacancies by TalentCorp.
However, there is one more factor by which we need to multiply the above overall potential — the industry development.
The general level of technological advances, innovation and digital transformation in the industry increases the scope of tasks and collaborations that can be done remotely. We are talking here about digital transformation versus plain digitalisation.
Digital transformation is born when there is the highest level of digitisation that allows an increasingly larger number of the physical world objects to be placed on the network and moved around, while completely reinventing and re-engineering business processes, business models and business strategies.
South Korea is already experimenting with the 6G application this year, while Malaysia still has a disjointed digital ecosystem, lack of plain digitalisation and nascent digital transformation.
Therefore, if anything else, the level of digital transformation and remote work potential in advanced countries may boost our brain drain through yet another avenue — remote working.
Of course, these individuals now would at least stay in Malaysia and spend their money here. However, we must think beyond that — they will continue to advance somebody's else economy, not ours.
Both writers are part of the research team at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times