Why migration infrastructure could be the next competitive advantage

Executives are therefore facing the critical decision of either investing in global talent pipelines now or waiting for AI and robotics to reduce the need. It’s a false choice. Migration infrastructure isn’t a temporary fix for a labor shortage. It’s permanent economic infrastructure that creates competitive advantage regardless of how automation unfolds and it offers optionality in an uncertain future.

No one knows which jobs automation will penetrate, at what pace, or in which sectors. Countries with mature migration systems can adjust talent inflows based on what actually happens. If automation accelerates, they can moderate admissions while maintaining capacity in sectors that still require physical presence. If automation disappoints or proves slower than projected, they can rapidly scale up using systems already built. Nations lacking migration infrastructure face binary constraints: permanent labor shortages now or costly, crisis-mode system building later. Infrastructure is the hedge that preserves flexibility when the future of work remains unpredictable.

Labor scarcity also reaches far beyond the tech sector. In the health sector, the World Health Organization forecasts an 11 million global health worker shortfall by the end of this decade.⁴ Reported shortages of automotive mechanics, seasonal farm laborers and senior care workers are emerging across multiple economies, creating bottlenecks that ripple through entire value chains.⁵ Labor shortages are becoming systemic rather than sector specific.

At the same time, global mobility pressures continue to rise. Currently, 304 million people live outside their country of birth. Another 123 million are forcibly displaced by conflict, persecution and environmental disasters.⁶ Sub-Saharan Africa’s working-age population will surge from 883 million in 2024 to 1.6 billion by 2050 – almost one-quarter of the world’s total.⁷

The supply exists. The demand is overwhelming. Yet the systems connecting the two are fracturing under strain.

Behind these numbers are millions of individual decisions. A Kenyan nurse may weigh visa timelines against family separation. A Salvadoran construction worker might have to calculate whether remittances will justify years away from aging parents. A Syrian teacher may have to consider whether her credentials will transfer or if she’ll start over by getting a job where she is washing dishes.

These aren’t isolated failures. Demographics, technology, geopolitics and sustainability are converging to make migration infrastructure a defining competitive advantage of the future. Aging economies face shrinking workforces as demand surges for specialized skills driven by AI and advanced manufacturing. Climate displacement accelerates in younger, high-birth-rate regions as geopolitical tensions narrow legal migration pathways. Sustainability pressures limit where rapid population growth can be absorbed without straining water, energy and housing systems. Each force intensifies the others: technology creates labor gaps that demographics can’t fill domestically, climate creates migration pressure that geopolitics restricts and sustainability constraints determine where displaced populations can actually settle.

This pattern exemplifies what EY refers to as a NAVI world: Nonlinear (single events trigger disproportionate cascades), Accelerated (transitions that took years now compress into months or weeks), Volatile (unexpected changes become more common), Interconnected (events trigger cascades of downstream impacts, often with unforeseen outcomes). These NAVI dynamics make migration infrastructure essential. Reactive policy creates perpetual crisis. Proactive infrastructure creates resilience.

As demographic pressures intensify through the 2030s and 2040s, countries without a sound migration approach will face permanent competitive disadvantage.

Viewing migration through a fresh lens

What if we approached migration with the same operational discipline, long-term planning and multi-stakeholder coordination we apply to highways, power grids and public education?

Migration infrastructure – visa processing, credential recognition, housing and integration systems – determines whether countries can convert demographic pressures into economic advantage. Building this infrastructure requires coordinated action across business, government and civil society. Each plays a distinct role in how societies absorb and benefit from new arrivals and none can succeed in isolation.

For most businesses, the traditional mindset treats migration as government policy that only becomes relevant when visa restrictions disrupt workforce planning. An infrastructure mindset treats migration as a talent strategy, building proprietary pipelines, investing in housing capacity and designing for migrant consumers. Some sectors, particularly technology companies in the US, have long understood this connection and actively advocated for skilled immigration pathways.

For government, the conventional approach swings between restriction and liberalization, largely based on political cycles and who holds power. Historically, governments have flexed immigration for labor needs, such as Britain’s Caribbean recruitment in the 1950s, Germany’s Gastarbeiter program, the UAE’s construction workforce program. However, these programs were sector-specific and time-limited responses that often-treated integration as optional or temporary. An infrastructure approach plans capacity years in advance, linking immigration targets to verified housing, credentialing systems and integration services in the same way transportation authorities plan highway capacity based on projected traffic.  

For civil society, the traditional model responds to crises through humanitarian aid funded by volatile grants. The infrastructure model positions these organizations as the critical bridge between migrants and receiving communities, with sustained funding for language training, credential navigation and cultural integration.

The question isn’t whether people will move, but rather where they move and whether systems that receive them are ready.

In the US, a demographic turning point will be cemented by 2030, when all baby boomers pass the age of 65.¹¹

In the European Union in 2024, 100% of population growth came from net migration as deaths outpaced births in the bloc.¹² It’s a reliance that will only intensify. Migration is shifting from economically beneficial to economically essential as the only source of workforce growth for most advanced economies. Even China, whose demographic decline will accelerate through the 2030s, will be forced to rely overwhelmingly on automation without immigration.¹³

Displacement meets selective restriction

Global displacement is rising sharply. By the end of 2024, 123 million people were forcibly displaced worldwide, a figure that has grown 200% in the past 15 years.¹⁴ These include refugees, asylum seekers and internally displaced people fleeing conflicts, persecution, violence, human rights violations or deteriorating public order in their home countries. Seventy-one percent are hosted in low- and middle-income countries.¹⁵ In an increasingly volatile international system, structural pressures will continue to fuel high levels of displacement in the decades to come.

While asylum and economic migration are governed by distinct legal frameworks and policy considerations, both are increasingly shaped by geopolitical instability and policy volatility and both impact labor markets and infrastructure planning.

Yet migration policy across the developed world is fragmenting as many governments have shifted to more protectionist policies.¹⁶ In the US, September 2025 brought dramatic policy swings. President Trump imposed a $100,000 annual H-1B visa fee, effectively shutting down the program for most employers.¹⁷ Just months earlier, the Biden administration had finalized H-1B modernization rules that expanded flexibility.

This volatility illustrates the unpredictability businesses face in workforce planning, often driven less by economic fundamentals than by populist sentiment. Rapid migration inflows, especially when integration lags, can trigger backlash and abrupt policy reversals. In the EU, the 2024 Pact on Migration and Asylum passed narrowly, aiming to distribute asylum responsibility more evenly among member states. Yet implementation remains uncertain. Poland has refused to participate and there are broad disagreements between frontline countries that are advocating relocations and other member-states that are asking to contribute money rather than accepting more migrants.¹⁸

Consequently, a new pattern is emerging, one with tighter controls on humanitarian and low-skill routes, combined with targeted liberalization for those with in-demand skills or wealth. Germany enacted citizenship reform and fast-track visa pathways.¹⁹ The EU Blue Card expanded.²⁰ GCC countries introduced premium residencies.²¹ As borders stratify by skill and wealth, the gap will only continue to grow.

But this creates its own infrastructure challenge because the fastest-growing regions are also some of the most climate-exposed. For example, Africa’s urban population will nearly double to 1.4 billion by 2050, with two of every three people living in an urban area.²⁵ These cities face dual pressures because they must absorb rising numbers of internal climate migrants while already operating near their capacity. At the same time, they serve as departure points for outward economic migration. These overlapping demands strain the same limited housing, transportation and employment systems, leaving cities with little capacity to absorb either form of movement effectively.

The World Bank’s adaptation finance gap, with current flows an order of magnitude below the US $187 to $359 billion annual required,²⁶ means these cities will struggle to build absorption capacity, increasing onward migration pressure toward countries with better infrastructure.

Competing forces

Technology is reshaping global migration through a combination of acute labor demand and long-term structural shifts in how work is performed. These pressures operate simultaneously, creating conditions that are difficult for labor markets – and governments – to absorb.

On the one side, technology-driven industries are expanding far faster than domestic labor markets can supply. AI, semiconductor and clean energy booms all require specialized technical and trade skills that most advanced economies can’t produce at sufficient scale. The US alone will need 67,000 semiconductor workers through 2030 to meet manufacturing expansion plans – a shortage that can’t be addressed solely with US graduates.²⁷ The clean energy transition could provide a net increase of 18 million jobs by 2030 , but it is an open question whether there will be enough workers with the required education and training to take on these roles.²⁸

On the other side, automation and tech-enabled remote work hold the potential to reduce demand for certain roles over time, creating uncertainty about which occupations will grow or shrink and at what pace. These long-term shifts coexist with immediate shortages, making it difficult for employers and policymakers to plan for the workforce they’ll need in the future.

Today, only 52% of employers say that it is easy for their company to find the required global talent to meet business needs. The supply constraints are binding now, but infrastructure projects can’t wait a decade for automation to mature.

Over the next decade, migration demand will diverge by skill and sector. Countries will continue to compete for mid- and high-skilled workers, while some low-skill migration may soften in areas where automation scales.²⁹ Yet core infrastructure build-outs, healthcare delivery and complex services will still require physical presence.³⁰ Countries with clear pathways for both remote talent and physical settlement will capture disproportionate value.

The structural adjustment

Migration is the structural adjustment mechanism that connects chronic labor shortages in high-income regions and rising urban pressure in lower-income regions. Whether this adjustment succeeds depends on absorption capacity – the infrastructure that determines whether countries can translate migration pressures into economic advantage.

Like all infrastructure, migration capacity requires deliberate investment, coordination and commitment over years, if not decades.

For example, housing development in the US takes an average of two years from planning to occupancy.³¹ Building credential-recognition frameworks and fast-track licensing pathways typically requires several years of negotiation and implementation. The Quebec-France nursing agreement, for example, took more than three years to establish.³² Integration services – language training, job matching, cultural bridging – need years to scale effectively. Social infrastructure – the trust and acceptance that enables integration – can take generations to mature.

The bottleneck is less about demand or supply and more about absorption infrastructure.

Countries, starting now can, position themselves to have significantly more capacity in the next two decades when demographic needs peak.

The absorption capacity challenge

Physical infrastructure serves as an impediment to migration, as much as policy or labor demand. Even before accounting for migration surges, housing shortages plague multiple major receiving metros, including Toronto, Dubai, London and Berlin. Urban infrastructure wasn’t designed for rapid population surges and construction can’t scale fast enough without accelerated builds starting now.

In 2023, Canada added 5.1 residents per new housing unit compared to a historical average of 1.9.³³ Australia only managed to build one home for every 3.2 migrants in 2023 and one new property for every 2.1 migrants in 2024.³⁴ Germany has forecast a need for more than 2.5 million new dwellings by 2030.³⁵ Meanwhile, construction timelines average 18 to 24 months, creating a lag between migration surges and housing availability.

These ratios translate to real choices: families of four sleeping in one room, skilled workers choosing not to migrate because they can't find housing, wages consumed entirely by rent, leaving nothing for integration. Infrastructure isn’t cold statistics; it’s whether a family invited to fill labor shortages can build a life in a community with adequate housing, schools and services – or arrives to find the same infrastructure deficits that existing residents already face.

It’s important to recognize that these pressures don’t just constrain newcomers; they also squeeze existing residents, driving up rents, crowding schools and hospitals and intensifying political resentment over perceived competition for scarce resources.

Cities can’t absorb faster than housing and services can scale. Without accelerated construction starting now, these gaps will persist well into the future. Regardless of labor market needs or humanitarian imperatives, absorption capacity is a binding constraint on migration flows.

Two cities demonstrate what deliberate housing infrastructure can achieve. Vienna’s mixed-income social housing model maintains approximately 60% of residents in publicly subsidized units, preventing the affordability spirals seen elsewhere,³⁶ while Singapore’s regulated workforce housing accommodates 38% foreign workers through coordinated public-private development.³⁷

Credential recognition bottleneck

One-third of highly educated immigrants in OECD countries are overqualified for their jobs, with rates reaching 73% in the Republic of Korea and 57% in Canada.³⁸ These aren’t skill mismatches; they’re system failures. Each case represents years of training rendered worthless by credential non-recognition, families living on a fraction of their earning potential and host countries squandering talent they claim to desperately need. A surgeon drives for Uber. An engineer stocks shelves. A teacher works retail.

The WHO projects an 11 million health worker shortfall by 2030,³⁹ yet thousands of foreign-trained healthcare workers can’t practice because credential recognition processes take months to years.

Streamlining credential recognition isn’t only about fairness; it’s economic necessity.

The systems to do this already exist. Germany’s Recognition Act has processed over 383,000 foreign qualification applications since 2012, with procedures typically completed within three months.⁴⁰ Privately sponsored refugees in Canada showed 90% first-year employment rates for men, which is 17 percentage points higher than government-assisted refugees.⁴¹ These systems work when designed deliberately.

Policy volatility and coordination failure

The mismatch between long-term economic needs and short-term political cycles creates volatility. Businesses can’t build long-term talent strategies when visa rules change every election. Many political cycles run two to four years, while infrastructure returns take years or decades more to yield returns. Migration policy gets caught in this trap. It’s evaluated on election timelines while its effects unfold over generations. As Gregory Daco, EY Chief Economist, Ernst and Young LLP, observes, “Anytime there are strong and rapid net migration inflows, there tends to be a populist pushback. These rapid inflows generally prevent immediate integration which can lead to a misguided sentiment that ‘foreigners are taking our jobs.’ I don't believe that sentiment and electoral implication is going away anytime soon.”

The balancing act between productive contribution and sustained social license

The problem isn’t just moving people; it’s ensuring productive contribution while maintaining social license. Like highways or power grids, migration infrastructure requires orchestration across government (visa policy, credentialing frameworks), regional and state actors (housing, healthcare capacity), local government (zoning, schools, transit), private sector (workforce housing, talent pipelines), civil society (integration services, cultural bridging) and origin countries (skills training, pre-departure preparation). No single entity can build it alone.

As Fabrice Reynauld, EY International Location Advisory Services leader, warns: “Either you find multilateral policies to help make the investments and the continents will grow and remain stable. Or you end up with migration not in the millions, but in the hundreds of millions.”

The economic prize of building migration infrastructure

Countries that build migration infrastructure gain lasting advantages, while those that don’t face compounding losses. Here are four examples that highlight the potential impact:

1. Immediate productivity gains. Spain’s recent experience shows the dividend: immigration drove 64% of new jobs and half of all growth in 2023, lifting GDP by 3%, which is nearly four times the eurozone average.⁴⁵ When credential recognition and integration succeed, migrants contribute immediately during peak earning years.
2. Fiscal sustainability. Working-age migrants help sustain pension and healthcare systems under pressure from aging populations. Immigrants admitted to Canada after 1980 have provided positive net fiscal impacts, with economic principal applicants contributing more than other immigrants and Canadian-born citizens.⁴⁶
3. Innovation acceleration. Immigrants or their children founded 46% of Fortune 500 companies and 44% of America’s billion-dollar startups as of 2025.⁴⁷
4. The cost of inaction. Japan’s working-age population fell by over 11 million between 2000 and 2018, with growth lagging despite automation.⁴⁸ Without migration infrastructure, economies face stagnation, fiscal strain and declining competitiveness.

Ultimately, the prize isn’t migration itself; it’s the dynamism, fiscal stability and competitive edge that deliberate migration infrastructure makes possible.

Automation will transform labor markets, but it won’t eliminate the need for people. Rather, it will change which roles expand versus those that will decline or disappear altogether. For example, as AI handles more cognitive tasks, manual jobs requiring human judgment, such as hospitality, healthcare and skilled trades may see faster wage growth while some white-collar work becomes commoditized.⁴⁹

This makes migration infrastructure more critical, not less because countries need systems to attract workers across the entire skill spectrum, from AI engineers to elder care specialists whose work proves irreplaceable.

Automation is selective, not universal

Technology rarely eliminates entire occupations. It simply reshapes them. Healthcare, for example, will remain human-centered. Elder care requires physical presence, emotional intelligence and cultural competency that technology can’t replicate at scale. Japan leads care robotics yet projects massive caregiver shortages through 2040.⁵⁰

The same pattern appears across construction, skilled trades, logistics and hospitality.⁵¹ Even knowledge work proves resistant because while AI augments it won’t entirely replace, increasing productivity per worker without reducing total headcount when output scales.⁵²

In a NAVI world, this uneven trajectory makes long-term workforce planning inherently difficult. Migration infrastructure enables countries to adapt to these shifts rather than fall behind them.

Infrastructure creates optionality in uncertain futures

No one can predict which jobs automation will transform, at what pace, or in which sectors. This uncertainty only increases the need for the structural flexibility migration infrastructure provides.

Optionality is more than the ability to increase or decrease inflows. It’s the capacity to reconfigure talent pathways, credentialing systems and settlement supports in response to changing conditions. Countries with strong infrastructure can shift recruitment toward sectors facing acute shortages, accelerate credential recognition when domestic supply tightens, or open targeted pathways as new industries emerge.

Countries lacking migration infrastructure may face prolonged labor shortages in the near term, or crisis-mode system building when demographic pressures peak. Migration infrastructure offers strategic flexibility for economies when the future of work is inherently unpredictable.

The demographic chasm requires a bridge

Even if automation fully matures in the coming decades, the window between now and then creates a serious gap without migration.

Baby boomers are retiring now. The US old age dependency ratio is growing quickly, though not as rapidly as Europe’s. East Asia faces an even steeper cliff: Japan, the Republic of Korea and China are aging faster than any region in history. These are locked-in demographic realities from birth rates decades ago.

The problem isn’t theoretical timing, it’s overlapping timelines. Infrastructure takes years to build; credentialing and integration systems take longer; social infrastructure takes generations. Automation, meanwhile, demands its own decade of sector-by-sector refinement before it can ease labor shortages.

The OECD warns that while AI can improve productivity, “it is by no means a substitute or silver bullet for a lack of human workers,” and that aging societies face a shift “from a shortage of jobs to a shortage of workers,” with per-capita growth projected to slow without policy action.⁵³ IMF research on Japan suggests that automation can potentially offset some impact of population aging on real output, but can’t fully eliminate fiscal pressures from demographic transition.⁵⁴

Countries betting solely on technological solutions risk years of labor shortages and sluggish growth while waiting for automation to mature. Migration infrastructure is the bridge that starts working now. Without it, economies stagnate waiting for technological rescue that may prove incomplete.

Capturing the value of migration infrastructure relies on coordinated leadership across the C-suite, each with a unique role to play.

CEO

As the steward of long-term competitiveness, the CEO sets the tone for how migration supports strategy, growth and resilience.

• Position migration as a core element of corporate strategy, linking talent mobility to innovation, market expansion and resilience
• Explore partnerships and investments that strengthen global talent pipelines and reduce dependence on constrained local labor markets
• Work with government and civil society to shape migration policies and infrastructure that enable predictable, long-term access to skills

CHRO

The CHRO translates migration strategy into workforce capability and agility, ensuring global talent is recruited, onboarded and integrated effectively.

• Develop direct recruitment channels in high-supply talent markets and partner with educational institutions for pre-employment upskilling
• Streamline onboarding and credential recognition processes to accelerate productivity for international hires
• Design integration programmes that support language learning, housing solutions and cultural adaptation for global talent

COO

The COO ensures the organization can scale operations efficiently as migration reshapes workforce composition and project delivery.

• Integrate migration considerations into operational planning, including workforce housing, credentialing and site selection
• Assess the financial implications of labour shortages, wage trends and project timelines under different migration and automation scenarios
• Leverage technology to simplify migration-related processes and support rapid workforce adaptation across locations

CRO

The CRO embeds migration dynamics into enterprise risk, resilience and scenario planning.

• Map exposure to migration-related risks, including policy volatility, supply chain disruption and social licence challenges
• Incorporate migration scenarios into business continuity, geopolitical risk and crisis-response planning
• Monitor regulatory, social and demographic trends to anticipate emerging risks and opportunities related to migration

CMO

The CMO ensures the organization remains relevant as migration reshapes customer bases, preferences and demand patterns.

• Continuously monitor migration-driven shifts in customer demographics and preferences to adjust campaigns and capture short-term opportunities or mitigate risks
• Evolve brand positioning and product portfolios to stay relevant as migration changes the long-term composition and needs of key markets Use data-driven insights to unlock growth by designing campaigns, partnerships and products that engage emerging customer segments shaped by migration trends

Five priorities for governments

For migration to become an economic advantage, governments can shift from acting solely as gatekeepers to taking on the role of system designers, building coordinated ecosystems that involve business and civil society.

1. Link immigration to infrastructure planning. Begin by forecasting future skill needs using AI-enabled labor-market modeling, integrating those projections with housing, transit and education planning. Linking migration targets to verified infrastructure capacity ensures inflows remain sustainable and politically defensible. Co-funding models between governments and businesses can synchronize public investment with workforce expansion, while predictive analytics can identify bottlenecks before they materialize. As Catherine Friday, EY Global Government & Infrastructure Leader, notes, “Countries like Singapore are doing long-term workforce modeling and planning migration today based on 10- or 20-year horizons. Whereas countries like the US, UK and Australia are looking at two or three years.” Planning backwards from future capacity requirements turns migration from a reactive policy into a foundation of national competitiveness.
   
   
2. Accelerate credential recognition. Credential bottlenecks are a self-inflicted drag on productivity and integration. Working with regulators, professional bodies and employers to modernize recognition systems can reduce processing times from years to months and unlock the underused talent already in-country.
   
   
3. Build integration infrastructure and orchestrate the ecosystem. Coordinate a comprehensive migration ecosystem that brings together government (policy and funding), business (employment pathways and workplace integration) and civil society organizations (community-level support). Recognize that migration reshapes the fabric of society and design integration plans that work at both local and national levels. Collaborate with employers, NGOs and community leaders to support not only migrant populations, but also the residents and institutions adapting alongside them. As Shane MacSweeney, EY Global Infrastructure Leader, observes, “Governments are trying to build assets that will last more than a generation, but in an environment where demographic and migration shifts happen every decade.” Digital tools can provide the agility physical systems lack. Integration programs using data-driven design and coordinated delivery are better positioned to provide results, strengthening public confidence and preserving the social license essential for continued migration.
   
   
4. Prioritize selective pathways for economic needs. Political realities make it difficult to expand all migration routes at once. However, selective pathways aligned with clear economic objectives can build support and demonstrate results. Using real-time labor market data, governments can target sectors facing acute shortages and adjust pathways as conditions change.
   
   
5. Establish regional coordination. No country can solve labor scarcity or displacement alone. Regional agreements on mobility, mutual credential recognition and shared integration standards can reduce frictions and create larger, more flexible talent pools.

Three imperatives for civil society

Civil society organizations provide human connections that make migration systems work on the ground. By fostering trust, strengthening community ties, and coordinating across borders, they help ensure that migration delivers benefits not just for newcomers, but for the societies that welcome them.

1. Scale integration infrastructure. Civil society organizations are the connective tissue of migration systems, yet most remain underfunded and fragmented. They can scale by deploying tech-enabled delivery, including digital language training, virtual legal clinics and AI-assisted credentialing, to reach more people at lower cost.
   
   
2. Build social license through evidence and connection. Public trust is built on shared experience and credible data. Civil society can strengthen social license by creating programs that connect migrants and host communities, while communicating the broad economic gains that migration brings: larger labor forces, faster output and minimal net job loss for natives.
   
   
3. Coordinate globally for sustained response. Civil society organizations are uniquely positioned to connect local experience with global learning. Coordinating across borders and sharing effective models, data and tools can accelerate impact, while pooled or blended financing can turn one-off successes into scalable systems.

Summary

The infrastructure of integration – housing, schools, skills, belonging – takes time to build. The nations that start early will meet the future with readiness. Those that wait will meet it with scarcity.

Migration is not an emergency to be managed or a threat to resist. Rather, it’s infrastructure to build. How businesses and nations invest in absorption capacity today will determine their competitive position in the decades to come.