Wednesday, October 05, 2011

Reverse Engineering Migration

A great way to create jobs and attract migrants is to export talent. That doesn't mean sit back and let graduates leave. A community should be strategic about valuable destinations and help the resident thrive in that location. This is the talent trade economy and reciprocity applies. How hiring immigrants helps multinational firms penetrate fast growing markets abroad:

High-skilled immigrants are likely to have several attributes that could help U.S. multinationals capitalize on foreign opportunities. Beyond language skills, well-educated immigrants typically possess specialized knowledge about how to conduct business in their home countries. They are likely to have a strong understanding of customer behavior there and to have insights about what kinds of products would succeed. Furthermore, high-skilled immigrants often also have relationships and are part of networks that can facilitate foreign market access. In order to study these e§ects of skilled immigrants, it is particularly useful to work with data that links individuals of particular ethnicities to specific firms.

I understand migration as a link between two communities, not a zero-sum game. The move to improve can benefit both sending and receiving country, even when the brains boomerang back home. The above study provides proof of how any community experiencing outmigration can generate a return on the investment in the educated who leave.

To put it in a domestic context, Boston needs to stop worrying about brain drain. And I thought Chicago has an annoying inferiority complex:

Right now, Massachusetts has an Avis strategy without the Avis motivation: "We're #2, but our sense of entitlement keeps us from trying harder."

Keep that up, and in twenty years we'll all either be working for universities or the burrito shops nearby.

We're a second-tier financial services town. Second-tier tech town. Second-tier retail town. Second-tier defense contracting town.

That doesn't attract the best talent in the world, and it doesn't give you a strong position in the global economy. It leaves you to play a retention game — let's try our best to hold on to the people who grew up here, or who got a degree here — rather than an attraction game.

And it leaves you exposed to sniping from boosters of the top-tier locales, seeking to attract even more talent to their companies. For example, Marc Andreessen, co-founder of Netscape, recently told The Economist that "a massive brain drain from Boston to the Valley... has all but gutted Boston as a place for high-tech entrepreneurship." (That didn't stop his venture capital firm from funneling money a few weeks later to a Boston mobile technology start-up...perhaps the last one left in town?)

Talent moves to Silicon Valley and venture capital heads to Boston like a remittance flow. Boston is great at producing the talent Silicon Valley wants, that it so desperately needs. The two regions are tightly linked. It's a commensal relationship, a great asset to both places. Instead, Boston sees the migration as a problem that needs fixing. Protectionist thinking wins again.

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