The research included case studies of 55 companies operating in the region, including deep-blue multinationals such as British Petroleum, Credit Suisse Group, Hong Kong's MTR Corp, and electronics giant Philips.

One disturbing trend that the survey has unearthed is that this expatriate downsizing - to use a human-resources industry buzzword - is well under way. 'Many international companies are trying to reduce the number of expatriates and international assignees who are occupying longer-term - as opposed to developmental - leadership roles,' the report says.

In other words, companies in the region are ready to hire expatriates to start or expand their businesses but would rather have locals manage the operations over the long haul, especially as these native executives are seen as highly competent in terms of cultural understanding, adaptation, collaboration, teamwork and communication.

'One reason for reducing expatriates ... is based on the premise that in the life-cycle of most businesses, the localisation of leadership has a positive impact on performance,' says Andrew Bell, programme director for the Asia-Pacific Human Resources Council and author of the report, Leadership Development in Asia-Pacific: Identifying and Developing Leaders for Growth.

'This positive impact results from a range of factors in which local leadership is more likely to have a deeper understanding and familiarity with the needs and expectations of local consumers and clients, local business infrastructure such as distribution channels and external relations, including with the government and media. Also, language may be a critical factor. An inability to work in the local language can be a serious impediment in some aspects of business operations.'

And then there is the economic rationale: The report says firms in the Asia-Pacific believe homegrown executives can have a greater impact on business performance than expatriates and do not cost them nearly as much.

These attendant expenses - which can be double what a local executive would cost - can include salary supplements and additional benefits, such as home leave, school tuition and a housing subsidy, the report says.

For good or bad - but mostly for good - the region continues to see an influx of multinationals and a rising tide of local entrepreneurs, raising the demand for business managers. Faced with a shortage of talent, some firms have taken matters in their own hands.

Of the 55 groups surveyed by the Conference Board, 79 per cent plan to accelerate talent development in the region. And while 'indirect or non-operational budgets' are being cut, about 50 per cent of the respondents are either maintaining or increasing their budgets for leadership-development programmes involving highly specialised coaching of top managerial material by outside consultants or experts.

But while many Asia-Pacific companies have woken up to the need to train future managers and chief executives, their efforts are usually stymied by a host of factors.

For one thing, the sheer shortage of local managers has led to severe competition for talent, pushing up salaries in the process.

The report says employment turnover rates in some industrial sectors in Shanghai and Bangalore - India's answer to California's Silicon Valley - have exceeded 40 per cent a year. With talent at a premium, it is no wonder that salaries have also become stratospheric.

'Absolute salary levels for some talented executives in Shanghai are equal to or greater than their counterparts in Singapore or London,' the report says.

The respondents attributed this shortage of local talent to the lack of opportunities for career or management development, the dearth of skilled human-resources professionals, and the difficulty of getting managers to move from juicy assignments such as Singapore or Hong Kong to a wild-west posting such as Kathmandu or Ulan Bator.

But what about all those bright kids sent by their wealthy entrepreneurial parents to business schools in the west? Well, they've done well, with some graduating with honours, and others excelling during their internships with the bulge-bracket banks in New York or London. The problem is, they usually end up running the family business back home, leaving the Asia-Pacific's public talent pool as shallow as ever.

Ultimately, expatriate assignments are not only about pay and opportunities for professional progress, but also involve the social software - nightlife, schools, hub location and ease of access to other work or holiday destinations, art and cultural options, safety and good public infrastructure, a clean environment, political stability.

This is probably one reason why Singapore topped a recent ranking for the best overseas address for Asians and other expatriates. And why Hong Kong is now feeling the heat from various international chambers of commerce over its flaccid - some say almost criminal - response to the city's Third World-like pollution problems.

Expatriates in Asia-Pacific, and perhaps increasingly so in Hong Kong, are an endangered species, so recent efforts by the government to raise the hurdle for foreign professional workers are a bit redundant. If the city's soul-searing pollution is not going to kill them, the economic trend of localisation will certainly do them in.