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From Brain Drain to Brain Circulation? How Countries Can Draw on Their Talent Abroad Yevgeny Kuznetsov World Bank Institute Labor Markets Course Washington, DC March 30, 2010
From Brain Drain to Brain
Circulation?
How Countries Can Draw on
Their Talent Abroad
Yevgeny Kuznetsov
World Bank Institute
Labor Markets Course
Washington, DC
March 30, 2010
Table of Contents
1. Motivation
2. Promoting brain circulation
3. Lessons from successful
initiatives
4. Conclusions
Market for the highly skilled
• Will become even more globally integrated
• Increasing returns to skills will continue to favor spatial concentration: clustering phenomenon
• The brain drain will increase, both from developed and developing countries
• Expansion of far-flung Diasporas – networks of expatriates abroad
Motivation
Top Skilled Emigration Countries
Stock of tertiary-educated foreign-born residents in OECD (2000)
All countries of origin
1 ………… 1,051,885
2 INDIA 996,813
3 PHILIPPINES 886,653
4 GERMANY 855,815
5 CHINA 799,834
6 MEXICO 473,923
7 S. KOREA 425,152
14 TAIWAN 263,086
15 IRAN 260,270
16 USSR-RUS 256,229
18 CUBA 221,051
40 ARGENTINA 105,211
67 CHILE 62,072
Proportion of Skilled Emigrants
in the Total Stock
Taiwan(China) 78.0
Qatar 69.6
…
Philippines 67.1
…
Mongolia 61.1
…
United States 54.4
• Be productively employed in the country:
growth of clusters and non-traditional
exports
• Leave the country and be lost for it: brain
drain
• Leave the country yet be engaged in
projects at home: brain circulation
• Leave and come back: return migration
Four Scenarios for Skills
Diversity of Skills
• Scientific
• Technical
• Medical professionals
• Entrepreneurial and managerial
• Cultural
• Tacit skills (not necessarily requiring higher education)
(and respective Diaspora networks and initiatives )
Common Mistakes
• Focus on the return of skills (physical reallocation to home countries): unrealistic for many countries
• Focus on scientists
Instead:
Create joint projects with skills abroad –leverage brain circulation
• Focus on business and technical talent
• A country with highly educated population and significant
scientific schools but difficult business environment: brain drain
(to Europe, Russia, US)
• From brain drain to circulation: a technology entrepreneur in
US from Belarus recognizes opportunities at home: software
producer EPAM is founded
• Now: 3000 employers with offices in USA, Hungary and
Russia; a rapidly growing firm
• „Born global‟ firm (although from its website www.epam.com
you will never guess where work is done)
Example: A story from Belarus
In many countries, Diasporas played a critical role
In knowledge-based growth: China, India, Ireland
Two ingredients of success:
• first generation „overachiever‟ (highly successful
individual) from the skilled diaspora
• dynamic segments of economy at home
• Providers of venture capital and trade networks
• Indian experience
• Chinese approach to attract back high level migrants: Specialized technology parks
How to trigger brain circulation?
Example: Global Scot
• A program to manage enthusiasm to get
involved of about 900 highly influential Scots
all over the world
• A part of Scottish Enterprise – Scottish
Economic Development Agency
• A program with annual budget of about 300
thousand pounds
• A highly successful network of expatriate
professionals due to a diversity of early
success stories
Towards a virtuous cycle
Emergence of innovation clusters and venture capital
industry in Taiwan
• Massive foreign education and brain drain in the 60‟s and
70‟s
• Culture of risk-taking and experimentation virtually non-
existing
• Silicon Valley as a role model: successful entrepreneurs
from Diaspora and the government decide to promote
venture capital industry
• First venture capital fund is established. Expatriates
reallocate to Taiwan to manage the Fund. Diaspora in
Silicon Valley open up market
• Demonstration effect of the success triggers establishment
of other funds
Source: Annalee Saxenian, University of California, Berkeley
Is it the number’s game?
Do countries need large numbers of the
Diaspora of talent to generate the Taiwan’ type
dynamics?
No. Smaller Diasporas of highly skilled can
be very productive as well.
Example: ChileGlobal: a network of about 100
successful professionals of Chilean origin in
the US, Canada and Europe
Towards a virtuous cycle
Tangible contributions of ChileGlobal:
– Co-founding of high-tech firms in Chile
(example: Interlink)
– Synopsis creates a software
development center in Chile (Raul
Camposano – Chief Technology Officer
of Synopsis – is a member of
ChileGlobal)
– Involvement in peer review mechanisms
Towards a virtuous cycle
Remittances
Donations
Investments
Knowledge & Innovation
Hierarchy of Diaspora Impact
Institutional
Reform
Example from Egypt
Coptic Orphans: Transforming Traditional Charity
• After visiting Coptic orphanages in Egypt, an Egyptian American began fundraising among US Coptic Churches with unexpected success… and founded Coptic Orphans
• Innovation transfer through existing network:
• Program to pair volunteer women from the local community with younger girls, who receive financial assistance.
• Support of at-risk families• Quality control of assisted kids, capacity building, financial
reporting.• Established offices in in Cairo, Australia, Canada and US,
funding directly hundreds of local Coptic Churches in Egypt.
• Leveraging heterogeneity through commonalities:
• Egypt: Trusted institution, global network, shared values, clear needs
• Diaspora: Financial capacity, search for identity, will to “share fortune”
Emerging Lessons
• Many initiatives to establish „brain gain‟ networks
have failed
• A lot of initial enthusiasm which dissipates.
E.g.: Red Caldas of Colombia
SANSA of South Africa
• Major lesson: Expatriate networks need to generate
transactions (demonstration effects), people get tired
of discussions
• New sources of promising experience: Chile,
Armenia, Philippines
What is the logic of successful initiatives to
promote brain circulation?
Public sector should not be directly involved in
diaspora programs, yet its role is critical
Venture capital logic: many fail, majority remain „living
deads‟, very few are successful
Successful initiative creates a search network linking
exceptions from all sides
Nourishing and developing promising ideas, rather
than selecting or matching them
Hypotheses
Tension between Individual Creativity
and Organisational Logic
Individual initiative and creativity Bottom-up
impulse
Org
aniz
atio
nal
su
pp
ort
Top-down
impulse
Living dead
Capture or stifling
by vested interests
Guided serendipity
Elusive synergy
Organizational
support of projects
Hit the wall
Useful but tiny
Heroic success
Talent moves walls
(Not replicable
by definition)
Hypotheses
What is the logic of public sector involvement?
Two-prong approach:
Facilitate a diversity of initiatives from the bottom-up („let one thousand flowers bloom‟)
Provide a framework for information sharing and lessons-learning
Initiatives:
Contests between domestic NGOs to leverage diaspora members for long-term projects. Examples: Russia, Mexico
Similar programs in Morocco and Tunisia for temporary return of researchers.
Conclusions
1. Skilled diasporas can be very useful for home countries but
to develop their potential, concerted effort is required. This
concerted effort takes time.
2. In the short term, individual champions and tangible
success stories (demonstration effects) are the key
3. In the longer-term, institutions of the home countries are the
key (Diasporas are not a panacea)
4. Focus on pragmatism: relying on individual champions to
develop institutions
