Toward a portfolio theory of talent development: Insights from financial theory, illustrations from the Asia-Pacific

• Talent Portfolio Theory is a new framework for studying human resource development. • Talent portfolios use brain train, brain gain, brain circulation, and brain linkage. • National talent strategies involve portfolio diversification and rebalancing. • Talent Portfolio Theory allows cross-national comparison of talent strategy over time. • While Japan stagnated, Singapore sustained growth by rebalancing its talent portfolio. We propose Talent Portfolio Theory (TPT) as a new framework for studying human resource development. Drawing insights from Modern Portfolio Theory in financial investment, TPT views a nation’s talent development as creating a “talent portfolio” composed of four “B”s: brain train, brain gain, brain circulation, and brain linkage. TPT attends to how a talent portfolio, like a financial one, is diversified to minimize risk, and how diversification can be maintained via rebalancing. As such, TPT provides a framework that captures the overall picture of a country’s talent strategy and offers a lens through which to understand how a country changes or “rebalances” its talent portfolio over time. It also provides a tool for examining cross-national variation in talent development strategy. We illustrate the utility of TPT with the cases of Japan and Singapore. While human resource development was crucial to the economic rise of both countries, TPT demonstrates that Japan’s and Singapore’s approaches to constructing and rebalancing their talent portfolios took different routes with diverging outcomes. We conclude with discussions of theoretical and policy implications of this new approach for the study and implementation of talent development.