2003 October 25 Saturday
Brains Drains, Brain Gains, And Immigration

Michael Woods has written an excellent article about scientists who leave Europe to work in the United States. (same article here)

Measured in numbers, the trans-Atlantic brain drain is small. Only 4 percent of European scientists -- 400,000 of 11 million -- work in the United States. But they are the creme de la creme, ranging from brilliant young students to world-renowned superstars.

"Real innovation in science depends less on the many 'worker bees' in the enterprise than on the presence of a decent sprinkling of the very best minds," noted William Zumeta and Joyce S. Raveling of the University of Washington in a report they wrote last year for the Commission on Professionals in Science and Technology.

The contention that we are preferentially getting Europe's very best scientists is backed up by the fact that while one seventh of German science doctorates end up in the United States three quarters of German Nobelists are here in the US.

Many advocates of very large scale immigration cite immigrant success stories to defend their position that immigrants are a net benefit. But as illustrated by the quote above, differences in ability vary enormously. If the goal of immigration policy is to maximize the benefits for the receiving country then the goal of immigration policy should be to emphasize quality over quantity. In a world in which American industry faces intense and escalating competition from huge numbers of Chinese and other foreign engineers and scientists it makes no sense to have an immigration policy that has resulted in the current condition where twenty-five percent of foreign resident adults who are eligible for US citizenship have less than a ninth-grade education. What we have currently is an incredibly foolish and short-sighted immigration policy that will prevent the United States from successfully competing against China, India, and other emerging competitors.

The United States ought to focus on recruiting highly talented people whose skills are being poorly utilized in their home countries.

Perhaps most galling to young Italian researchers is what many describe as an anachronistic system of distributing jobs in research. It's who you know, not what you know, that counts, say several who have left the country. Applying for research positions abroad comes like a breath of fresh air.

"The most important thing here is that you are considered a good researcher," Bruni says of Britain. If you want to find a position in Italy, he says, you have to take a different approach and adapt to the hierarchical structure. That often means garnering support from a single research director who can make or break a younger scientist's career.

Here is an interesting sampling of foreign academics who moved to Carnegie Mellon University and the University of Pittsburgh which the Pittsburgh Post Gazette trumpets as a "brain gain".

Intel Corp. CEO Craig Barrett says we should stop sending foreign brains home after we train them in our colleges and universities.

The end result of the current educational system was a shortage of US talent and a situation where 50 per cent of all advanced degrees were awarded to foreign nationals, he said. US-funded colleges paid to educate them.

"And then we send them home and the jobs follow them," Barrett said.

To reverse the brain drain, Barrett said the US should "staple a green card to every diploma. [That] would do wonders for the US economy." While he said the ratio of domestic Intel employees has remained constant at 60 per cent during the past decade, increasing competition from US-trained IT professionals in Russia, China and India and the "dwindling number of IT graduates in the US" could change that.

"There is huge competition coming for jobs," he said.

The very smartest scientists and engineers come up with the innovations that lead to new products, new markets, and lots of jobs. A national strategy designed to deal with the competition of cheap smart engineers in China and India should be to increase the number of the very brightest and most productive innovators in the United States.

Barrett's comments follow on the heels of ominous warnings by Intel co-founder and chairman Andrew S. Grove that the United States is going to lose its lead in the software industry to India and China.

He predicted that the software and services industry is about to travel the well-worn path of the steel and semiconductor industries. Steel's market share dropped from about 50 percent to 10 percent in a few decades. U.S. chip companies saw theirs shrink from 90 percent to about 50 percent today. Now the writing is on the wall that software could suffer the same fate, said Grove, whose 1996 bestseller was titled ``Only the Paranoid Survive.''

``It would be a miracle if it didn't happen in the software and services industry,'' said Grove, noting that he was speaking on National Depression Day.

It is great that Andy Grove and Craig Barrett are speaking out on this subject. As Grove points out, US leaders are ignoring the problem.

Grove chided U.S. policymakers for all but ignoring the problem.

"What is the U.S. public policy?" he asked. "I am hard put to find a document" outlining a policy strategy.

He said he had detected no recognition of the problem from any of the presidential candidates.

While European governments are concerned about their own brain drain national governments are not the only level at which brain drain concerns can be heard. In quite a few local communities in the United States "brain drain" as an issue is attracting quite a bit of discussion. Take, for instance, a recent report released by the Greater Boston Chamber of Commerce and the Boston Foundation which expresses worries that half of higher education graduates from the Boston area leave the state.

The report, "Preventing A Brain Drain: Talent Retention in Greater Boston," indicates that 50 percent of graduates in 2003 who received associate, bachelor's, or graduate degrees from 10 institutions in the metropolitan area left the state.

Where the most skilled and talented people move to will determine which parts of which countries thrive in the future.

The Boston area is losing more youth than the nation as a whole.

  • From 1990 to 2000, metropolitan Boston lost 15.8 percent of its young people between the ages of 20 and 34, at a time when that demographic group declined nationally by just 5.4 percent.  Furthermore, during the same period, Massachusetts – which had been ranked among the leading states in expanding their educated work forces – fell below the national average;
  • Fully half of Greater Boston’s graduates leave the area after receiving their degrees.  Yet four out of five graduates who leave are “avoidable departures,” making a voluntary decision to live elsewhere;
  • Approximately half of these avoidable departures leave the Boston area for cities they have never lived in before.

The full text of the report is available in PDF format.

Other recent examples of brain drain worry editorials in the United States include one from the Chronicle-Tribune of Grant County Indiana entitled Let's turn brain drain into brain gain and another from the Salisbury Maryland newspaper The Daily Times entitled How do we stop the brain drain? and a Christian Science Monitor article on efforts by Iowa's government to stop brain drain. At the local level commentators and business and civic leaders recognize the importance of keeping around the brightest and most skilled workers. If only the national level politicians could be so practical we'd all be a lot better off.

The recognition that smart people are critically important is not translating into smarter policies at the national level. Immigration policy should be shaped toward raising the average level of talent of those who immigrate. Less skilled people should be kept out while we make it easier for the most skilled to come and stay. Another smart policy would be to accelerate the education of the brightest kids and get them into the workforce years sooner than is the current practice. This would result in young bright minds being able to use more years of their youthful brilliance producing new innovations and developing more better designs and ideas over their working lives. It would also reduce the cost of education while simultaneously increasing tax receipts.

For demographic reasons US power has peaked. An aging population is going to require tax increases to support them in retirement and those tax increases will have the effect of robbing the economy of its vibrancy. Increasing numbers of people in other parts of the world are pursuing scientific and engineering training. US industry is going to lose leadership in critical industries. Really wise national policies across a long list of policy areas could reduce the extent of the relative standing of US power and also produce much higher living standards for all Americans.

Share |      By Randall Parker at 2003 October 25 12:38 PM  Immigration Brain Drain


Comments
razib said at October 25, 2003 5:09 PM:

boston's brain-drain: boston has such a high concentration of great & good schools that crank out so many graduates who come from other parts of the country that i think it makes sense that the local economy can't support every engineer coming out of MIT or lawyer graduating from Harvard Law School.

innovaters vs. worker bees: worker bees are important too-after all, most "scientists" in the united states are engineers with undergraduate levels of education.

Randall Parker said at October 25, 2003 5:12 PM:

Razib,

But Boston has been losing more than have been coming in to go to school.

Worker bees: But there is no shortage of them.

Jake said at October 26, 2003 6:07 PM:

There are two factors which will always make the US a haven for the best and the brightest unless our government does something stupid:

1. The best and the brightest are going to the countries and states with the lowest tax rates.

2. Europe has very little venture capital available so that the best minds have trouble finding challenging and exciting work. Here in the US we have a surplus of venture capital that is a drawing card for the best and the brightest to come to the US.

"Real innovation in science depends less on the many 'worker bees' in the enterprise than on the presence of a decent sprinkling of the very best minds," noted William Zumeta and Joyce S. Raveling of the University of Washington.

This is a fact that is very important. All we need to do is attract relatively few of the best and the brightest. I am not worried.

Randall Parker said at October 26, 2003 6:31 PM:

Jake,

1) The United States has lower tax rates than Europe but there are other countries that have even lower tax rates.

2) The difference in tax rates between the US and Europe accounts for a very small portion of the difference in scientist salaries in the US and Europe. The European governments could, at least in theory, spend the money to raise salaries of their best and brightest who would in academia and in research institutions.

3) The demographic pressures of an aging population will probably cause an increase in US taxes. The same will happen in Europe of course. But there are other countries that have lower taxes and less pressure to raise them.

4) The venture capital situation in Europe has improved considerably and probably will continue to do so. Still, they are likely to lag the US on that score for many years to come. But Britain is in third place for VC money after the US and Israel if memory serves.

5) There are countries which are currently sources of bright immigrants to the US which are undergoing rapid industrialization. As living standards rise in those countries the allure of America will fade somewhat for those folks.

6) We are not getting as many of the brightest as we could. We could change our immigration law to get more of them.

I don't think complacency is a good idea. The competition from China and other countries is rising. The US fraction of the production of semiconductors and other high tech products is trending downward just as has happened with steel.

Dave Sheridan said at October 28, 2003 12:04 AM:

There are a lot of reasons foreign nationals are attracted here, but in my view they all arise from the same set of things. We have more, and more interesting, opportunities for the best from abroad because:
a) We have a record of sustained economic growth that is appreciably higher than elsewhere.
b) Our economic policies (vis a vis the rest of the world) have produced a high standard of living.
c) Our growth tends to be driven by knowledge-intensive industries (and knowledge-intensive elements of more basic industries), salaries and challenges for bright scientists and engineers are high.

In short, we provide a high standard of living, a culture that rewards success, and a sustainable demand for highly-skilled scientists and engineers. Other economies provide some of these advantages, but none to the same extent we do. There are places with higher real growth, but with lower standards of living. Others can provide high salaries, but with correspondingly high taxes.

Economic stagnation leaves Europe, for example, in a bind. Its educational systems produce more qualified graduates than its economies can fully utilize. Part of this can be attributed to lower real growth rates, and part to the fact that European industries are on average less research-intensive. While European companies could certainly raise salaries to compete with American companies, their unwillingness to do so says something about the value they place on the resource. I don't think access to capital, particularly in developed economies, is the problem. Capital will flow to Europe, for example, as funding opportunities emerge.

To address taxes, they matter in that they influence growth, and to an extent determine the economic return to research-intensive activities. Between countries, all else equal, lower tax regimes can generate more economic growth than can high-tax regimes. Among states within the U.S., relative business climates influence where new investments are made. Taxes and regulatory costs are big components of business climates. California, where I live, is a case in point. We've been perennially able to attract top talent despite prohibitive real estate prices and a generally higher cost of living than elsewhere (Boston and New York excepted.) We've become uncompetitive because our business climate has ceased to be attractive to new businesses, or to the expansion plans of existing businesses.

I'll also endorse what Randall says above. There is no place for complacency. China and India should be expected to compete far more effectively to keep their 'best and brightest' in the years ahead. What matters is what is happening at the margin.


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