Tapping Talent in a Global Economy: A Reverse Brain Drain

Tapping Talent in a Global Economy

VIVEK WADHWA

A Reverse Brain Drain

The United States, long the beneficiary of talented immigrants, needs to act quickly to keep these valuable workers from leaving to pursue expanding opportunities in their home countries.

Although most of the national immigration debate originates with those who want to limit immigration, U.S. policymakers should be focusing on the more important task of attracting and keeping more highly skilled foreign-born scientists and engineers. The future strength of the nation’s economy will depend on the creation of vibrant new companies, and the development of innovative products and services will be produced by well-paid workers. In recent years, immigrants have been playing a rapidly expanding role as high-tech entrepreneurs and inventors, providing an essential service to the country.

The danger is that the United States is taking this immigrant contribution for granted at a time when changes in the global economy are providing alternative career opportunities for the most talented people. In the past, the United States was clearly the best place for the most talented scientists and engineers to work, and there was no need to do anything special to attract them. Those days are gone, and the United States must begin paying more attention to what is necessary to attract foreign talent and taking steps to eliminate barriers to immigration.

Even as the immigrant contribution to U.S. high technology grew steadily from 2000 to 2008, anecdotal evidence began to surface in the popular media and in the professional electronic networks of the emergence of a countertrend. Immigrants with technology and science skills were becoming more likely to leave the United States. Encouraged by the development of high-technology industries in their home countries and by the prospects for rapid economic expansion, they began to see their homelands as places of equal if not greater promise.

When immigrants recognized that they could pursue their career objectives outside the United States, they were able to consider other factors such as closeness to relatives, cultural appeal, and quality of life when deciding where to work. They were also able to think more about the U.S. immigration policies that keep over 500,000 highly skilled immigrant workers in limbo for years with little opportunity to advance or change jobs. With the current economic crisis darkening job prospects and evidence of growing U.S. xenophobia, it is no surprise that many immigrants who came to the United States for school and short-term jobs are heading home. President Obama even signed an economic stimulus law that includes a provision that makes it harder for some companies to hire non-U.S. citizens.

During the closing decades of the 20th century, roughly 80% of the Chinese and Indians who earned U.S. Ph.D.s in science, technology, engineering, and mathematics (STEM) fields have stayed in the United States and provided a critical boost to the nation’s economy. Perversely, now that China and India are becoming formidable economic competitors, the United States seems inclined to enhance their economic productivity by supplying them with an army of U.S.-trained scientists and engineers. These returnees are spurring a technology boom in their home countries, expanding their capacity to provide outsourcing services for U.S. companies, and adding increasingly sophisticated primary R&D capability in knowledge industries such as aerospace, medical devices, pharmaceutical research, and software design.

One obvious sign of U.S. complacency about these developments is the absence of data to confirm the anecdotal evidence. In spite of all the controversy surrounding immigration policy, the government has not bothered to determine how much immigrants contribute to the economy or to assess the likelihood and consequences of a major shift in their desire to work in the United States in the future. To fill this gap, the Global Engineering and Entrepreneurship project at Duke University has attempted to quantify the role of immigrants in founding entrepreneurial companies and developing new technologies, to understand how federal policies affect decisions about working in the United States, and to assess the competing opportunities in India and China and the other factors that influence life decisions.

With financial support from the Kauffman Foundation, a research team including Gary Gereffi of Duke University, AnnaLee Saxenian of University of California at Berkeley, Richard Freeman of Harvard University, Ben Rissing of the Massachusetts Institute of Technology, and Guillermina Jasso of New York University spent three years conducting multiple surveys of thousands of technology and engineering startup companies, interviewed hundreds of company founders, surveyed more than 1,000 foreign students and more than 1,000 returnees, and made several trips to India and China to understand the on-the-ground realities in those countries.

U.S. immigration policy has been made in an information void. Although our research is far from conclusive, we believe it is fair to say that current immigration policy significantly undervalues the contributions these skilled immigrants make to high-growth segments of the U.S. economy. It appears that immigrants spur innovation in the United States and even help foment innovation by non-immigrants. At present, U.S. technological preeminence is not in question. Furthermore, some degree of intellectual dispersion and circulation is inevitable and valuable to the global economy. The United States cannot expect to maintain its previously overwhelming technological superiority in an increasingly globalized economy. But it takes a rare blend of short-sightedness and hubris to fail to investigate trends in the movement of global talent or to reconsider immigration policies that are not only economically counterproductive but also potentially damaging to U.S. national security.

Innovators with accents

AnnaLee Saxenian’s 1999 report Silicon Valley’s New Immigrant Entrepreneurs was the first comprehensive assessment of the critical role that immigrant capital and labor were playing in Silicon Valley’s regional economy. She found Chinese and Indian engineers at the helm of 24% of the Silicon Valley technology businesses started from 1980 to 1998. Even those scientists and engineers who returned to their home countries were spurring technological innovation and economic expansion for California by seeding development of companies in the Golden State.