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From Brain Drain to Brain
Circulation?
How Countries Can Draw on
Their Talent Abroad
Yevgeny Kuznetsov
World Bank Institute
International Workshop on the Economic and Social Impact
of Migration, Remittances, and Diaspora
Yerevan, Armenia
June 24-25, 2010
Table of Contents
1. Motivation
2. Promoting brain circulation
3. Lessons from successful
initiatives -- from CIS and
beyond
4. Conclusions
Motivation
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
Top Skilled Emigration Countries: A quiz
Stock of tertiary-educated foreign-born residents in OECD (2000)
All countries of origin
1
…………
1,441,307
2
PHILIPPINES
1,226,260
3
INDIA
1,037,626
4
MEXICO
922,964
6
CHINA
816,824
18
USSR-RUS
289,090
23
UKRAINE
246,218
Investment Generation and Firms
Creation: Example from Belarus
•
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: 3500 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)
Impact on local innovation clusters and
university: Tomsk, Russia
• Tomsk, a city in Western Siberia (2000 miles
East from Moscow), known for its technical R&D
and universities
• In the 90’s, about a half of graduates of Tomsk University of
Radio -electronics (TUSUR) leave the country
• The best come to Silicon Valley and become managers and
owners of start-ups. They form Alumni association from
TUSUR in Silicon Valley
• Members of this alumni association help to establish student’s
business incubator; bring Tomsk’ talent to their firms for
internship, finance R&D laboratories
• Impact on TUSUR and technology commercialization in Tomsk
Hierarchy of Diaspora Impact
Institutional
Reform
Knowledge & Innovation
Investments
Donations
Remittances
Four Scenarios for Skills
•
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
Common Mistakes
•
Focus on the return of skills (physical
reallocation to home countries):
unrealistic for CIS countries
•
Focus on scientists
Instead:
Create joint projects with skills abroad –
leverage brain circulation
Focus on business and technical talent
Policies for Engagement with Diasporas
• In the long run: need for good
business environment (investment
climate). It is desirable but rarely
present
• In the short and medium-run: focus on
dynamic segments of the economy.
Engage diasporas with these better
performing dynamic segments of the
economy (examples of Belarus and
Tomsk)
How does the diaspora engagement occur?
Multiple Incremental Contributions from diverse points
Focus on exceptions first
Exceptions form search networks
Some sort of a critical mass
emerge
This critical mass becomes an Archimedian
lever to promote further change
Institutialization of search networks is the major issue
©Knowledge for Development, WBI
Example: ACRA, Armenia:
Creating a credit reporting agency
• American-American real estate businessmen
• Business opportunity seen by others, but no investment
had taken place yet
=) Need for cultural intermediation and use of search
networks
2004: ACRA Credit reporting LLC is founded:
Involvement of WB, KfW, and Diaspora members in
ACRA’s advisory board, foreign-educated, local
management team
• 2005: Outside, private Investors get involved in ACRA
• 2007: Online reporting launched
Similar Experience possible in Post-Conflict State: Bosnia
How to trigger brain circulation?
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? Armenia
Armenia: huge diaspora providing significant
remittances and large philanthropic
contributions
Yet contribution to the institutional
development in Armenia has been modest
Armenia Innovation and E-society project:
early stage venture capital fund. Diaspora
‘overachievers’ will be critical for its creation.
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, Russia (particularly sub-national level)
Policy Implications
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
Tension Between Individual Creativity and its
Organisational Support
Organizational support
Top-down
impulse
Living dead
Capture or stifling
by vested interests
Hit the wall
Useful but tiny
Guided serendipity
Elusive synergy
Organizational
support of projects
Heroic success
Talent moves walls
(Not replicable
by definition)
Individual initiative and creativity
Bottom-up
impulse
Policy Implications
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 actors to leverage
diaspora members for long-term projects. Examples:
Russia, Mexico
 Russia: Recent (2009) initiative of Ministry of
Education and Science to engage scientists from
abroad
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
Thank you
Yevgeny Kuznetsov
[email protected]