Talent now costs more than capital according to a recent issue of the New Yorker. The article makes the case that demographics and an improving economy have thrusted us into an era that will increasingly place an extraordinary premium on talent.
It goes on to paint a picture of desperate venture capitalists chasing after any talent pool with handfuls of money. By the time we reach 2010, the internet bubble will seem like the depression. Recruiting companies rejoice!
Looking at the recent financial results of higher end recruiting companies, I’d have to agree that the climate is changing very fast. Recruiting done right is very profitable, and the combination of decreased immigration and an aging population will make it increasingly profitable in the years to come.
But I do quibble with the article’s use of economic vocabulary, and after all this is the New Yorker. What does it mean in economics to say that “talent costs more than capital”? How do you make a comparable measure of the two when the one, capital, is the tool for measuring the cost? This make no more sense than saying “bananas taste better than food” or “French sounds better than languages”. I think the article is trying to make a statement about the demand and supply curves for talent, something like that the demand for talent is showing little price elasticity.
Whatever, I still get a kick out of their cartoons.