Saturday, December 31, 2011

Migration Year In Review: Brain Drain Economic Development

People develop, not places. That's my mantra heading into 2012. My plan for the new year is to work out the details of the theory and then figure out what that means for economic development projects. A corollary to that slogan is move to improve:

“The shifting balance of global economic growth is bring global migration flows with it,” says Madeleine Sumption, policy analyst at the Washington-based Migration Policy Institute. “We're seeing lower migration to crisis nations, whereas most of the growth is towards developing nations.”

People are still seeking work in traditional markets, like Germany or Canada. But new, surprising flows are taking place in this post-recession, rocky recovery era -- Mexican Americans are returning home, for example, and Spanish graduates are emigrating to Chile and Chinese scientists in the U.K. are leaving to return home. The shift promises to create new types of diasporas, change remittance flows and alter labour markets.

We live in interesting times. The above Globe and Mail story about migration includes an interactive map detailing the most important flows of 2011. (The Brazil-Japan connection is news to me.) Immigrants to the United States are heading back to China, India, and Mexico. I'm seeing more evidence of native-born Americans heading off to boom economies such as Brazil's. The United States, like Pittsburgh, is becoming a major exporter of talent.

That brain drain is a great opportunity, which will benefit both places linked by relocation. Brain drain can and does fuel economic development:

A 2009 study of 127 developing countries found that overall, the loss of skills to migration is outweighed by the extra skills acquired by people contemplating it. That study's authors, however, found in an earlier study that you can have too much of a good thing: Once countries start to lose more than 20 percent of their college graduates, they reckon, brain drain starts to act as a drag on economic growth. In other words, China and India, which export only a small share of their skilled citizens, would benefit from exporting a lot more. By contrast, war-scorched disaster zones such as the Democratic Republic of the Congo, whose most talented people have fled in droves, probably wouldn't.

Polemics aside, there is such a beast as too much brain drain. I argue that most US communities suffer from too little brain drain, a la China and India. Regardless, talent retention policies are horrid and destructive. Migration is economic development.

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