In 1928, the English economist Arthur Pigou coined the term “human capital” to describe investments in the acquisition and application of knowledge, asserting that these investments, just like traditional physical capital, were essential ingredients of economic production. Today, we might divide human capital into three major components. Education plays an important role in developing human capital, of course. Equally important is whether a society’s farms, factories, offices, and shops take advantage of its workers’ abilities through efficient management and the latest technology. And welcoming foreigners infuses a country’s stock of human capital with fresh energy and initiative.
One doesn't need to cross international boundaries to supply "fresh energy and initiative". Domestic migration provides a similar dividend. The tremendous talent churn in Chicago is a testament to that global city's vitality. Never mind the negative net migration numbers. Brain circulation, like increasing global trade, fuels tremendous growth:
I once asked the boss of Tata Consulting Services, a gigantic Indian IT firm, how many of his top executives had worked or studied abroad. He replied: "All of them."
The world's most talented people are exceptionally mobile. When they move to America, they make it smarter, and that's not just because they are smart. It is also because migration creates connections.
Those connections are transaction pathways, lines of trust. Trade follows migrants. Long distance knowledge transfer occurs more easily between nationals and expatriates. Exporting talent spurs innovation in the homeland. Talent migration isn't a zero-sum game.