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Read African based startup Caspar Coding’s take on the “Brain Drain” phenomenon, its misconceptions, challenges and opportunities.
The opinions expressed in this blog are those of the authors.
The concept of ‘Brain Drain’ refers to the extraction of highly-skilled workers from low-income by high-income countries. Conventional belief suggests this has detrimental effects for low-income countries as they are ‘robbed’ of their most talented people. Instead these people could have been future leaders, scientists or physicians of their country of origin, leading it to prosperity. As of today, the rate at which ‘Brain Drain’ occurs has increased in the last decades as a consequence of globalization. But is this a bad thing? What if a more positive narrative helped understand the linked opportunities?
Consider the countries of Malawi and Japan: Japan has around twenty-one physicians per ten thousand people, while Malawi has only one physician for every fifty thousand people. This radical inequality in medical skills has bad consequences for health. People born in Malawi will live, on average, thirty-two years fewer years than their counterparts born in Japan. These facts are troubling in themselves. To make matters worse, it is not that the citizens of developing countries have no interest in becoming physicians or a lack of opportunity for medical training. In fact, many developing societies spend a great deal of money training new physicians. The reason for the low numbers of physicians has much to do with what medical training provides: namely, the opportunity to leave the developing society and enter into a more developed one.
As all of the above may sound very bad (and to a certain extent it is). However, it provides a distorted view on the concept of ‘Brain Drain’.
A few decades ago the above was considered as one of the foremost reasons why low-income countries were held back in their development, but the concept of ‘Brain Drain’ and its detrimental effects have become obsolete in the era of the internet. Internet-Age emigration is fundamentally different from all of the preceding eras of emigration, due in large part to transnational societies that emigration engenders today. Transnational societies are those in which imagined communities straddle borders, and citizens not only possess intimate emotional attachments to multiple societies, but they engage with more than one society materially in a dynamic fashion. I hope everyone reading this agrees with me that ‘Brain Drain’ resolves around human capital and that the concept of human capital is only different from financial -and physical capital in the notion that it cannot be separated from its owner. But is it really nowadays? Obviously I do know that you are not physically capable of separating your body from your mind, but we have to agree upon the fact that through technologies the concept of human capital as described by Adam Smith in the 18th century doesn’t fit that well anymore.
So if the concept of ‘Brain Drain’ is obsolete and irrelevant today as a result of the growing interconnectedness of people, societies and countries, what do we observe nowadays?
1. Entrepreneurial spirit
First of all, in many low-income countries, lack of access to credit is a severe constraint to entrepreneurship. Emigration enables credit-constrained individuals to acquire savings to set up businesses once they return. In particular, when unemployment in the home country is high, small and medium-size enterprises can provide jobs and reduce poverty, making entrepreneurship an engine of growth. For example, in 2007 return migrants accounted for one-third of the start-ups in Taiwan’s Hsinchu Science-based Industrial Park and accounted for 10% of exports. Half of the leading software firms in India in 2000 were founded by Indian return migrants from the US. Returning migrants can be a major source of entrepreneurship, technology, marketing knowledge, and investment capital
2. Higher productivity leads to higher wages.
Migrants acquire skills abroad that allow them to earn higher wages than non-migrants when they return. Returnees in West Africa experience a substantial wage premium, but only for migrants returning from an OECD country. Similarly, Egyptian highly educated return migrants earn on average 24% more than non-migrants.
3. Increase in democracy and institutional strength.
Migration and the return of migrants to their home country also result in the transmission of knowledge, ideas, and social norms, which may benefit the home country. When migrants move to another country, they are exposed to different cultures, social norms, and political ideologies. Return migrants can transmit to their home country ideas about the quality of political institutions, raising awareness and demand for political accountability and increasing direct participation in the political system. For example, a seminal study based on a comprehensive panel data set of foreign students worldwide over 50 years found that foreign-educated returnees bring about democratic change at home if they acquired their education in a democratic country. Many leaders of developing countries were educated abroad and have returned to strengthen political institutions in their countries of origin. The benefits of this circular migration should be better promoted.
4. Remittances
On average an estimated two migrants in five will leave the host country within five years of arrival (OECD, 2011). This number is considered to be growing substantially as people feel more connected with their home country than a few decades ago due to technological developments. They are able to stay in touch with their loved ones, as with the developments in their country of origin. It is easier, cheaper and faster to visit the country of origin than it was forty years ago. The feeling of connectedness to the country of origin has grown. But if they don’t return migrants do still contribute to the economy in their home country: Remittances can support the diffusion of technology by reducing the credit constraints of receiving households and encouraging investment and entrepreneurship.
This still raises the question why Malawi then has just one physician for every fifty thousand people and Japan twenty-one for every ten thousand? Ultimately, this is a consequence of the fact that physicians are still leaving their low-income country of origin (such as Malawi). This is in line with the old reasoning related to ‘Brain Drain’ in which multiple scholars argued an outflow of educated workers can inflict a very high level of harm in the long run by reducing a country’s growth rate.
However, this line of reasoning assumes that if all skilled persons stay in a dysfunctional country, that country will somehow get better.
Considering Venezuela, one of the few countries which is suffering a “drain” of people, well-educated or not, demonstrates the short-sightedness of that assumption. It is precisely the country’s dysfunction and economic collapse that has driven its people abroad, among them around a third of its doctors.
Started in July 2018, Caspar Coding is an African tech startup, with offices in Kenyan and the Netherlands, specialized in connecting talented software developers to tech companies in Europe & Canada.
Website : www.casparcoding.com
LinkedIn: www.linkedin.com/company/caspar-coding