This post is a prediction of the movement of talent via an analogy – Goa, a very popular tourist destination in India.
Well, Goa used to be popular but lately its popularity has been declining in a unique way. It is a microcosm of the global talent movement that is already starting to happen.
If you look at the data, Goa tourism grew all the way to the pandemic and crashed during the pandemic (obviously).
But look at the recovery – only the domestic tourists recovered, and they are not the same domestic tourists (total tourist numbers lower than 2014 by the way).
What explains the fall of Goa?
Well, two reasons:
1) It’s gotten worse.
It’s much more expensive than it used to be. The hotels charge more, the restaurants are much more expensive than what they once were, and taxis are expensive.
There’s a taxi mafia that prevents any competition from entering (i.e. apps like Uber don’t work in Goa) and their pricing is 5-10x more than free market prices in India.
2) The competition has gotten better.
For around 20% more money, you can get a MUCH better tourist experience in places like Thailand and Vietnam.
- Visa free entry.
- The hotels are not only cheaper but have better facilities and service.
- The roads are not crowded and have fewer potholes.
- The sidewalks are well maintained. I sprained my leg walking on a sidewalk in Goa… which a local was using to drive his motorbike on.
- The restaurants are similarly priced to Goa.
- Taxis are cheaper and better. In Goa you pay a lot to ride a shitty car. In Thailand you get a luxury minivan that costs half to a third as much.
In other words, you get far more value for your money.
There are “intangibles” as well that are hard to quantify – for example, I’ve been to both Goa and Thailand, and the Thais make you feel far more welcome than the Goans do.
Tourism is a word of mouth industry. You go to a place, tell your friends and family about your experience, and that impacts where they go for their vacation.
If you tell people you had a great experience, it makes them more likely to go there and vice versa.
The tourists are not just fewer, but poorer.
I’ve confirmed this with a client who owns a hotel and restaurant in Goa, so this is not merely guesswork:
- International tourists are worth 20x+ to the Goan tourism ecosystem than Indian tourists. This is because International tourists spend months in Goa (avoiding harsh winters in their home country) while Indian tourists come for 3-5 days (for them it’s a local weekend vacation). The loss of international tourists cuts most of the tourism revenue in Goa.
- Upper middle class and above Indians who can afford Thailand/Vietnam are going there. The Indians who are visiting Goa now are thus the ones with much lower spending power.
Basically the Pareto principle applies and the top few percent of those who did 80% of the spending are gone!
If you have a high end expensive hotel/restaurant in Goa, your customer base is down by 90%+ unless you’ve significantly cut price (which you can’t because your lease costs are very high).
The Future of Talent
From all this, we can determine how talent will flow in the future.
- As the west becomes worse to live in (more crime, high taxes, extreme ideologies, etc.), the people with the highest talent will want to move. The most talented people have more options about where they can go. This is similar to how richer tourists can go to many places while the poorer ones can only afford to travel locally.
- They will analyze their options (rank cities to live in) and pick something they like. My guess? Dubai. This will eventually lead to a brain drain situation where the original locations will start getting drained of talent, which will make their economy worse, and that will make the living conditions deteriorate even more (smarter readers already recognize that this is a cycle).
- Since these guys have the most talent, future companies will built where they live. Either built by them there or moved there to get maximum access to talent.
- As the top few percentage of talent moves, they will take a much larger share of the economy with them. The next Facebook or Tesla will probably be founded in the east in places that are better to live in and have friendlier laws.
- Countries will try to lock in taxes by citizenship (massive scam run by the US government – click link to learn more), but this will not be possible because of private cryptocurrencies.
In other words, we are at the cusp of a new wave of talent flow. The chasm has already been crossed (you can’t stop it now).
All you can do is prepare appropriately for the world that is coming. This is the best time to be alive if you are talented (more options), so make sure you get skills and live in the talent.
– Harsh Strongman
