Imagine a world in which every locale competes for the brightest minds. Of course, that’s not the world we live in. While most governments have agencies to draw tourists and investors, very few commit to proactively attracting and retaining top talent. As a result, highly skilled individuals often struggle to move where they’re needed most, and the world is missing out on their inventions.

Tech hubs, cities, states, and nations that are ready to act stand to gain enduring economic, technological, and geopolitical advantage. Economically, countries with diverse populations of top talent are more innovative, grow faster, and are better able to deliver on their new industrial policy ambitions. Technologically, nations that attract top scientists, engineers, and entrepreneurs tend to dominate in quantum computing, supercapacitors, large language models, and other technologies that will shape our future. Geopolitically, building people-to-people ties among nations can establish valuable cross-border networks, contributing to a country’s soft power.

Public leaders increasingly see the synergy between local workforce development and global talent. In 2023 alone, Australia, Canada, Germany, Japan, Saudi Arabia, and Singapore took steps to ease employment-based migration while investing in the education of homegrown talent. The US, though gridlocked on immigration reform, has taken some measures to speed up visa processes. These are all steps in the right direction but hardly sufficient.

Winning the race for talent—global and homegrown—means making it an institutional priority. Doing so starts with setting a clear goal, naming an agency to truly own the outcome, designing the framework to deliver, and investing appropriate resources. We suggest a novel approach: the creation of public talent investment funds (TFs) that incentivize the private sector and civil society to search for, upskill, relocate, match, and integrate highly skilled talent.

TFs can operate at the tech hub, city, state, or national level. They consist of a small, well-networked team that receives seed funding from a government entity (such as a department of labor or state-level economic development agency) or a pool of private sector actors (a chamber of commerce or philanthropists, for example). Such a fund is empowered to invest the money in an ecosystem of specialized private sector vendors, nongovernmental organizations (NGOs), and higher-education providers—all of which participate in an outcomes-based funding model to ensure that any payments are linked to measurable impact.

On the whole, TFs do not behave like traditional service providers, but like fully empowered owners. Their closest conceptual analog in government are sovereign wealth funds, which operate with an equally high degree of freedom, small teams, and a focus on meeting the fiscal and industrial policy objectives of their host country.

The financial benefits at stake are significant. We modeled the business case for a modestly sized TF that attracts 1,000 highly skilled workers a year who pay income and sales taxes, and draw on public health care and education services. It would require an initial investment of about $15 million, would be self-funding after 20 months, and after four years of operation would generate a net fiscal value of $180 million. These figures illustrate that the attraction of highly skilled talent is a public activity with huge upside potential and outsize returns, making it a government activity with one of the greatest fiscal returns on investment.