These are just two examples that illustrate the growing demand and competition for talent in OECD countries. And they show a policy problem: how to attract and hold on to skilled labour. The British initiative also dispels a myth: that the problem only affects developing and transition economies. In fact, the British Royal Society first coined the expression “brain drain” to describe the outflow of scientists and technologists to the United States and Canada in the 1950s and early 1960s.
GLOBAL SKILLED WORKERS
Internationally comparable data on the migration of the highly skilled is incomplete, but sources confirm an increase in migration flows during the 1990s, from Asia to the United States, Canada, Australia and the United Kingdom. The increase comes from strong demand in OECD countries for IT and other skills in science and technology as well as the selective immigration policies that favour skilled workers. Not all skilled migrants are in search of educational, economic or intellectual opportunities. Sometimes, they are forced to leave their homes as a result of war, or political, ethnic and religious persecution.
Skilled migration between OECD countries is also on the rise but appears dominated by temporary flows of advanced students, researchers, managers and IT specialists, suggesting more a pattern of brain circulation than a draining of skills from one place to another. The globalisation of firms has helped fuel temporary flows; in the mid-1990s intra-company transfers accounted for 5-10% of the total flows of skilled workers to the United States from Canada.
The United States is the main pole of attraction for foreign skilled workers; 40% of its foreign-born adult population have tertiary level education. Since the early 1990s, some 900 000 highly skilled professionals, mainly IT workers, from India, China, Russia and a few OECD countries (including Canada, the UK and Germany) have migrated to the United States under the H1B temporary visa programme. The United States also takes in 32% of all foreign students studying in the OECD countries. Indeed, higher education is an important channel for US firms recruiting highly skilled migrants; some 25% of H1B visa holders in 1999 were previously students enrolled at US universities.
But the United States is not the only magnet. Canada also attracts talent and, despite its modest loss of skilled migrants to the US, is in fact a net importer of human capital. Skilled migration to Germany and France has been lower in recent history, but these countries have now implemented policies to attract foreign students, researchers and IT workers. In 2000, Germany launched a sort of “green-card” scheme to recruit 20 000 foreign IT specialists and by the end of the following year had recruited half that number, mainly from eastern Europe. In addition, dynamic Asian economies like Singapore are trying to plug shortages in IT workers through immigration from neighbouring Malaysia or even China. Even if the current economic slump has reduced global demand for IT and other specialty workers, foreign talent remains in demand.
In January this year, the UK government announced it would launch a skills-based migration programme and similar schemes exist in Australia and New Zealand.
Winners and losers
The costs and benefits of the brain drain and circulation of talent are hotly debated. International mobility of skilled workers can generate global benefits by improving knowledge flows and satisfying the demand for skills. The contribution of foreign skilled workers to economic growth and achievement in host countries, in particular to research, innovation and entrepreneurship, is increasingly recognised – witness the number of foreign-born US Nobel Prize winners or creators of global high tech companies, such as Intel or eBay, and other successful start-ups. It is important to distinguish between emigrants from OECD countries and those from developing countries.
The risk of a brain drain damaging rich countries is arguably lower, but it does exist. Canada may well lose skilled workers to the United States and import skilled human capital from other countries. However, the quality of the two-way flow is key, though it is difficult to calculate whether the loss of a top genetics researcher at a public lab can be compensated for by the arrival of even several hundred IT specialists. But as skilled migration between advanced countries is often temporary, there may be a double gain from the circulation of the highly skilled: first from the overseas experience acquired by their genetics researcher, and second from the constant inflow of skilled workers.
In sending countries in the developing world, the challenge is greater. For these countries, capturing benefits mostly depends on attracting back skilled emigrants and providing opportunities for them to use their new technological competencies. Returnees also can bring valuable management experience, entrepreneurial skills and access to global networks. They may even bring venture capital. But this is looking on the bright side.
Mostly, the problems caused by the brain drain in poorer sending countries are great. Migrants from developing countries are generally more likely to stay in the host country than migrants from advanced countries. Survey evidence on the share of foreign PhD graduates in science and technology who stay abroad show that 79% of 1990-91 doctoral recipients from India and 88% of those from China were still working in the United States in 1995. In contrast, only 11% of Koreans and 15% of Japanese who earned science and engineering (S&E) doctorates from US universities in 1990-91 were working in the United States in 1995. In the longer term, however, return flows of people and capital may not only offset some potential negative effects of international migration but also constitute an economic development strategy in its own right. In Chinese Taipei, for example, half of all the companies emerging from that economy’s largest science park, Hsinchu, were started by returnees from the United States. And in China, the Ministry of Science and Technology estimates that returning overseas students started most Internet-based ventures.
What governments can do
The harsh reality is that only a handful of countries have been successful in luring their talented emigrés back home. The International Organisation for Migration (IOM) estimates that some 300 000 professionals from the African continent live and work in Europe and North America. By some estimates, up to a third of R&D professionals from the developing world are believed to reside in the OECD area. While there are often media reports of successful Indian entrepreneurs in the United States who establish branches or even firms in India only a small number actually return; in 2000, it was estimated that some 1,500 highly qualified Indians returned from the United States, although more than 30 times that number depart each year.
The relative success of Chinese Taipei, Korea and Ireland in fostering return migration has been attributed to the opening of their economies and policies to foster domestic investments in innovation and R&D. Developing countries with some infrastructure in R&D, like India, are more likely to attract the return of migrants, as well as money and business contacts. “Scientific diaspora” and “immigrant entrepreneur networks” can also help sending countries capture benefits and know-how from emigrants overseas. Grass roots initiatives in South Africa and Latin America have been developed to link researchers abroad to networks in their home countries. Indian professionals in the US have been the primary drivers of knowledge and capital flows to India. The Indian government has contributed to the emergence of these private networks through legislative and tax rules that encourage remittances and investment from Indians abroad. The diaspora idea has been put to work by advanced countries too, like Switzerland, whose online network, Swiss-List.com was established to encourage networking among Swiss scientists in the US and to foster contacts with peers in Switzerland.
Governments can do quite a lot to address the causes of the brain drain. Science and technology policies are key in this regard. Developing centres of excellence for scientific research and framing the conditions for innovation and high tech entrepreneurship can make a country attractive to highly skilled workers, both from within the country and from outside. The task is not easy and it takes time; India’s investment in human resources in science and technology and own R&D capabilities dates from the 1950s. China has recently launched a project to develop 100 universities into world-class institutions that not only provide higher education training, but also academic employment and research opportunities.
In the OECD, the UK government plans to increase the salaries of post-doctorates by 25% and increase funding for the hiring of university professors. In France, some 7 000 teaching-researcher posts have been created since 1997 to retain talent and encourage the return of post-doctorates working abroad. The European Commission is looking to improve the attractiveness of the European research area and has doubled the amount of funding devoted to human resources in the Sixth Research Framework Programme to € 1.8 billion.
The risk of a brain drain is real. Yet countries can create opportunities for research, innovation and entrepreneurship at home and stimulate a return flow of migrants and capital, as well as win access to international innovation networks. With the right mix of policies and sustained international co-operation, several countries could, as one Indian official pointed out, see the “brain drain” be transformed into a “brain bank”.
• International Mobility of the Highly Skilled, OECD, 2002. See also: www.oecd.org/migration
• Science, Technology and Industry Scoreboard, OECD, 2001.
• “Brains Abroad”, Devan, J. and Tewari, P.S., McKinsey Quarterly No. 4, 2001.
©OECD Observer No 230, January 2002