Migration: trick to double global income?
Feb 26 2013
Slaves were transported to the US from Africa to work in the cotton fields. Indian indentured labourers and “coolies” were sent to the sugar plantations of Trinidad, Fiji and Mauritius and to the mines of Natal. Australia is virtually a nation of immigrants.
Waves of immigrants from Ireland, Italy, Spain, Poland, Mexico and England created the tapestry of the modern US. They left their homes often with the dream of a better life in a faraway land. They brought with them their ways of life, their exotic cuisine, their soulful music and their DNA.
Some countries and regions are particularly insular and opposed to any form of immigration. They will suffer in the global economy. The modern immigrants or mobile knowledge workers prefer to go to places where they feel safe, comfortable and welcome.
In addition to a cluster of high quality educational institutions like Stanford and Berkeley, the fabric of the Silicon Valley’s eco-system has been woven by its magnet-like ability to draw talent from all corners of the world and indeed from diverse parts of the US.
Its salubrious climate, its tolerant culture and its salad bowl approach of embracing and preserving diversity have combined to attract the brightest and the best. In the Silicon Valley, and more broadly in the west coast, it does not matter whether you are Chinese, Indian or Hungarian by ethnic origin and it is no big deal whether you are religious or agnostic, gay or straight, man or woman — what really counts is your capability, merit, creativity and enterprise.
Consider this: if the US had completely closed its borders to immigrants, many of the great technology companies of today would not have their founders. Apple was founded by Steve Jobs, who was the biological son of a Syrian immigrant. The founder of e-Bay, Pierre Omidyar is of Iranian origin. The founder of TIBCO Software, Vivek Ranadive is the grandson of the firebrand Indian communist leader late B T Ranadive. The founder of Oracle, Larry Ellison was brought up by a foster mother who emigrated from Russia. Andy Grove of Intel was born in Budapest. Sergey Brin, the co-founder of Google was born in Moscow and Jerry Yang, co-founder of Yahoo, came from Taipei. On his visit to Bangalore, the founder of Computer Associates, Charlie Wang narrated to me his fascinating life story and how he had migrated from Shanghai to the US at the tender age of 8. The fastest growing IT services company Cognizant Technology Solutions was founded by Kumar Mahadeva, a Tamil-speaking immigrant from Sri Lanka. And finally, the US would not have its current president if the Senior Obama, who came to study in the US from Kenya, was denied a visa.
Whether it was Mahatma Gandhi or Pandit Nehru, Subhas Chandra Bose, Tagore Swami Vivekananda or Dr Ambedkar — all of them studied or lived abroad for considerable periods and extensively travelled. They hated the British rule, but learnt from the European culture, its democracy and its education and legal systems.
While the west has been clamouring for opening the borders of emerging markets for their goods, they have been, at least in recent times, highly protectionist about the movement of people. Large numbers of people born in emerging countries may choose to migrate, but barriers prevent their emigration. Those barriers, according to economists’ best estimates till date, cost the world economy much more than all remaining barriers to the international movement of goods and capital combined. Michael Clemens of the Centre for Global Development, for instance, believes that if barriers to migration were removed, the global income would double. John Kennan of the University of Wisconsin — Madison has a similar but slightly different proposition. “The estimated gains from removing immigration restrictions are huge. Using a simple static model of migration costs, the estimated net gains from open borders are about the same as the gains from a growth miracle, that more than doubles the income level in less-developed countries.”
The US is embarking on a path of radical overhaul of its immigration system. One key component of the new system is to accelerate the retention of highly skilled and talented people. Hear it from president Obama himself, “Real reform means fixing the legal immigration system to cut waiting periods, reduce bureaucracy, and attract the highly-skilled entrepreneurs and engineers that will help create jobs and grow our economy.”
There is a lesson for India too. Instead of crying wolf over “brain drain”, we should also make our country attractive to global talent — not just those of Indian origin. We are already seeing a large number of managers and scientists who are coming to our shores. In a global market, there is no place for xenophobia. India must also learn to win the war for the best global talent if it aspires to be a leading player in the global economy — a decade from now.
(The writer is managing director of Deloitte Consulting, India. These are his personal views)