The Global Talent Index

The US under challenge from the UK and China.

The USA's status as the world's biggest talent hotspot is under threat from the UK and China, according to the first ever Global Talent Index (GTI).

The US will maintain its position as the world's leading country for nurturing and developing talent over the next five years, the Index developed by executive search firm Heidrick and Struggles and the Economist Intelligence Unit reveals. But it faces increasing competition from the UK, which rises to second place in by 2012, and China, which moves from eighth to sixth.

China is set to exploit its natural advantage as the world's most populous country by significantly improving its compulsory education system and developing a much better environment for producing and nurturing talent. This will enable the country to build on its manufacturing base and attract increasing numbers of foreign-owned businesses.

Despite the strong performance of the US overall, its labor market is set to become less open and flexible over the next five years amid fears of terrorism. It will rank 9th worldwide on this measure -only one place above China.

The GTI is the first survey of its kind to be undertaken. It is aimed at providing businesses with comprehensive evidence of where talent is located across the world. Thirty countries were chosen for the survey based on a representative geographical spread and the quality of available comparative data.

Kevin Kelly, CEO of Heidrick and Struggles, said: "Until now, companies may have sensed which countries attracted and developed talent most effectively, but objective data to support their impressions was simply unavailable.

"If talent is the oil of our future, we need to pinpoint the hotspots, identify the reserves and know how fast the pipelines can get up and running. The Global Talent Index will enable us to do this."

The GTI shows that the much fabled 'BRIC' (Brazil, Russia, India and China) phenomenon should more accurately be expressed as 'IC' when it comes to talent. While China and India rank among the top 10 talent hotspots worldwide, Russia will fall from sixth to 11th place by 2012, while Brazil will slip from 18th to 19th.

Overall, the survey confirms that talent follows where money leads. After the US and UK, the next best countries for attracting and developing talent are relatively small but open economies of Canada, the Netherlands and Sweden. Another noticeable trend is that several of the least promising performers do not yet boast fully functioning democracies.

Asia performs strongly overall, with Malaysia, South Korea and Japan accompanying China and India in the top 15 by 2012. Ukraine will overtake Russia and Argentina will fall dramatically over the next five years.