A company's ability-indeed, a country's ability-to attract, retain, and develop talent, rather than exploit natural resources, will increasingly define comparative advantage for the enterprise in the future. Public policy will play a significant role in this and it is imperative that the global business community actively promote wise action.

In the past century, policy makers have generally crafted economic agendas around overarching goals defined as natural resource development, industrial development, or development of robust financial markets. We suggest that economic policy agendas of the twenty-first century must focus instead much more aggressively on talent development.

If talent is to develop fully, policy makers must focus on removing barriers to the movement of talent, across both geographic and enterprise borders. This approach applies at both a geographic level as immigration policy and an enterprise level as employment protection laws. Many countries, most notably the United States, have benefited from the immigration of talent.

Enhanced labor mobility makes it easier for innovative companies to attract the best and brightest, not only with higher salaries but also with more rapid opportunities. Conversely, less innovative companies are penalized as they lose their talent.

Productive friction is an important catalyst for talent development. Freer flows of products and services across geographic boundaries also create the potential for productive friction similar to the free movement of labor. By having more choices available to them, customers can become important sources of productive friction, richly rewarding companies that successfully serve their evolving needs while increasing penalties for those that fall short.

Many public policy agendas focus on push incentives for the development of talent-agencies identify promising talent arenas and then design targeted subsidies to develop talent. We would suggest that pull incentives, are likely to be much more effective in enabling talent to find its highest value outlets.

At the end of the day, the most painful consequences of failure are felt at the level of the individual worker, especially workers who possess outmoded skills. Pull-oriented programs, in which the companies hiring displaced workers provide the training, are likely to work more effectively than push-oriented programs, which require governments to anticipate which skills are likely to be most valuable.

In parallel, the rule of law and especially the consistent and efficient enforcement of property and contract law help create incentives for the longer-term development of talent. In countries whose laws are arbitrarily enforced or whose legal remedies are extremely time consuming or expensive to access, individuals and enterprises typically adopt much shorter time horizons, requiring quick payback. This emphasis on the rule of law is different from a perspective that insists on uniformity of laws across national boundaries. If we are to foster more robust flows across national boundaries, we must learn to honor and cope with an increasingly heterogeneous world.

In the legal arena, one of the most contentious public policy issues involves approaches to the enforcement of intellectual property rights. More developed economies, especially the United States, have moved over time to policies that heavily protect existing owners of intellectual property. Developing economies often worry less about protecting the rights of the existing owners of intellectual property and more about ensuring broader access to intellectual property. Either extreme usually dampens incentives for innovation.

Talent development, especially when situated in economic activity, can drive improved productivity and, in turn, enhance the standard of living in any society. Even more broadly, a focus on talent development helps attract highly motivated and creative people. Talent development is an ongoing race, but those who lead the race will unleash passion and rewards that will make it worth running.