The Hindu Business Line : Brain drain — oxymoron in a global workforce

Should we bother about brain drain when the flow is moving in all directions in today's global economy, wonders Alok Ray, and cites the increasing movement to India of quite a few established professionals from countries such as the US to take up jobs, especially in the IT, aviation and pharma industries .

THERE WAS a time when people used to worry a lot about the "brain drain" from India. The apprehension was that the Indian state was spending a huge amount of resources to train doctors, engineers and technicians who were then emigrating to other countries and not contributing anything to India's national output.

There was talk, even in responsible circles, of closing the doors, while keeping the windows open. Though some economists, even at the height of the debate, pointed to benefits in the form of remittances from Indian workers abroad, in addition to emigration providing a safety valve for frustrated unemployed or underemployed educated workforce, the general public opinion in India was decidedly against the brain drain.

Things have changed much since, particularly for India. In India, despite the so-called brain drain, there is no appreciable shortage of engineers or researchers as yet. The shortage of doctors in villages continues to be a big problem but it is highly doubtful whether stopping migration of highly qualified doctors (who have the necessary expertise for migrating to North America or Europe) would have mitigated this problem.

On the other hand, the huge remittances by Indian professionals, initially by workers from West Asia countries and then increasingly by IT professionals from the US, have largely contributed to solving our decades-old balance of payments problem. The resentment against the brain drain phenomenon has consequently reduced. This may also be partly due to the fact that most families have some relatives working abroad.

The brain drain, the way it has happened, has contributed in other ways too. International migration of professionals, instead of being a permanent brain drain, has, in many cases, resulted in reverse migration of people after training abroad. India has gained from the higher productivity of these workers. This would not have been possible if India did not allow its students/professionals to go abroad for higher studies or training. The Chinese did follow a closed-door policy during the Maoist time and paid the price for it. Now they are trying very hard to make up for the loss.

In recent times, there has also occurred a significant rise in work-related temporary migration from India to provide services in other countries (look at the thousands engineers of TCS working temporarily all over the world). Should this be considered brain drain? India's current advantage in the area of services exports (including software, medical services and R&D) is largely due to our past open-door policy towards higher education abroad. Though some Indian IT professionals decided to stay back in Silicon Valley in the US, they started companies that created a market for software developed in India. In addition, they indirectly contributed by creating a good image about the competence of Indian IT professionals.

Notwithstanding these positive fallouts, even now there is a good deal of talk about how to lessen the damage caused by brain drain. Prof Jagdish Bhagwati, in the 1970s, proposed a brain drain tax which would partially compensate the country of emigration for the education subsidy which these professionals received. The idea of a brain drain tax has not totally vanished from the minds of some policy-makers and academics. Other suggestions floating around include granting, like the rich nations, only time-limited visa which would force the emigrants to go back to their country with their expertise and savings after working for a few years abroad. But, then, in today's increasingly globalised market place, should we try to stop this flow of human resource? If capital can move freely across national boundaries, why not labour?

One argument for stopping labour migration is that the developed countries are allowing only the highly skilled workers to move in. This is increasing the income gap between high- and low-skill workers and consequently worsening the income distribution in countries such as India. By the same token, the disparity in income between high- and low-skill workers in a country like the US should be low as result of migration of cheaper (relative to the US) skilled workers from India to the US. That way global inequality may not necessarily go up as the income of poorer skilled workers from India are moving closer to the income of richer skilled workers in rich countries.

In fact, technology has changed in such a way that everywhere the income gap between skilled and unskilled workers is widening. The demand for low-kill workers is going down all over the world. But there the primary blame should be more on the nature of technological progress, rather than migration.

Very recently another new trend has emerged. A global pool of high-skill human resource is emerging and employers in countries at different stages of development are all trying to draw from this global pool. Some regard this as the third phase of globalisation. In the first phase, goods moved globally, in the second stage, capital, and now it is the turn of skilled labour. Moreover, it is no longer restricted to a movement from less developed to developed countries as in the early phase of brain drain. Quite a few of the established professionals are now moving from countries such as the US to take up jobs in India.

This is due to a number of factors. One, the compensation package offered to these people (when considered in terms of the standard of living they can buy in India) is better in India, compared to the US or Europe. In any case, the emergence of a global culture and the ease of international travel and communication have hugely reduced the role of the residency factor in a person's life. Second, some of these professionals feel that they will be able to make better use of their expertise and contribute more in newly-emerging economies such as India. An example: New start-up low-cost airlines in India are hiring professionals from abroad who have experience in running such a business in other countries.

Three, as more and more companies are going global, often by acquiring production facilities in other countries, employing local managers and professionals to run the ongoing facilities have certain advantages. Even Japanese and Korean companies who so far stuck to their age-old practice of having only Japanese or Korean CEOs to head their subsidiaries abroad, are now changing in response to the new global trend. Transnational companies want to employ workers from many different cultures as an essential ingredient for successful global operations. To top it all, even entry-level engineers from countries such as Australia have started to take up jobs in India, as the job situation is becoming increasingly tight in their own countries. What is still now just a trickle, may increase significantly in volume over time.

Finally, do not forget that even migration of world-class academics or scientists from India is not a loss as it has led to greater contribution to the global pool of knowledge from which India has also benefited, along with other countries. For example, the work by Amartya Sen or Jagdish Bhagwati on Indian economy conducted abroad has advanced the understanding of Indian economy more than much of the work done by Indian economists in India. Then, should we bother about brain drain when the flow of brain is moving in all directions in today's global economy?

(The author is Professor of Economics, Indian Institute of Management, Calcutta, and Visiting Professor of Economics, University of Rochester, US. His e-mail: alokray15@yahoo.com)