Over the past several decades, many talented professionals and business leaders made their way to the United States, and Silicon Valley in particular, building companies that drove a range of new technologies and innovations into the market. However, that influx of talent is sputtering and reversing itself. Should we be concerned?
Many members of the incoming generation of talent see their home turf — particularly China and India — as the place to stay and make their marks. Vivek Wadhwa, a brilliant entrepreneur and academician, recently voiced concern in an article in TechCrunch about the growing “reverse brain drain,” in which talented people drawn to Silicon Valley are increasingly flowing back to their countries of origin.
Last year, he and research teams at Duke, Harvard and Berkeley polled 1,203 returnees to India and China and found emerging economies such as India and China now have a strong pull for the same talent that helped make the US the innovation powerhouse of the world. Wadhwa’s team also surveyed 1,224 foreign students within the US, and found that only six percent of Indian, 10% of Chinese, and 15% of European students planned to settle in the US long term.
While on the surface, it may appear to some that having foreign-born talent leaving the country frees up employment for domestic workers, the opposite may occur. There may be a diminishing of opportunities as a result of a reverse brain drain. Wadhwa points to statistics that show that more than 52% of Silicon Valley’s startups during the recent tech boom were started by foreign-born entrepreneurs. In addition, he adds, “foreign-national researchers have contributed to more than 25% of our global patents… foreign-born workers comprise almost a quarter of all the U.S. science and engineering workforce and 47% of science and engineering workers who have PhDs.”
He recounts an eye-opening experience from a couple of weeks ago:
I spent Columbus Day in Sunnyvale, fittingly, meeting with a roomful of new arrivals. Well, relatively new. They were Indians living in Silicon Valley… When introducing the topic of skilled immigration, the discussion moderator, Sand Hill Group founder M.R. Rangaswami asked the obvious question. How many planned to return to India? I was shocked to see more than three-quarters of the audience raise their hands. …the generational difference between older Indians who have made it in the Valley and the younger group in the room was striking.”
In his research (accessible here) Wadhwa says that the workers returning to Asia tended to be highly educated, specializing in management, technology, and science. He says there are several reasons why skilled professionals are opting to go back home:
Perceived quality of life: “And while they make less money in absolute terms at home, most said their salaries brought a “better quality of life” than what they had in the U.S. (There was also some reverse culture shock—complaints about congestion in India, say, and pollution in China.)”
Family values: Wadhwa says “67% of the Chinese and 80% of the Indians cited better ‘family values’ at home. Ability to care for aging parents was also cited, and this may be a hidden visa factor: it’s much harder to bring parents and other family members over to the U.S. than in the past. For the vast majority of returnees, a longing for family and friends was also a crucial element.”
Prestige and career advancement: With a US education or US-based experience under their belts, these professionals found immense career opportunities on their home soil. “About 10% of the Indians polled had held senior management jobs in the U.S. That number rose to 44% after they returned home. Among the Chinese, the number rose from 9% in the U.S. to 36% in China.”
General economic health: Only seven percent of Chinese students, nine percent of European students, and 25% of Indian students believe that the best days of the U.S. economy lie ahead. Conversely, 74% of Chinese students and 86% of Indian students believe that the best days for their home country’s economy lie ahead.
Where does the United States have an edge for these professionals and students? Salary and compensation are considered better in the States, but, ironically — considering the raging debate now taking place — healthcare is also considered better in the US than that provided within their home countries.
India and China have come a long way from just a couple of decades ago, when they were impoverished and mainly agrarian nations. They have become exciting hotbeds of innovation and growth. It’s only natural that the talent that arises in these countries see more reason to stay or go back, so some of the reverse brain drain is unstoppable. But companies and policymakers need to focus on ways to make the US more attractive again to foreign-born talent — the country that attracts the best and brightest from around the globe is the country that stays the most competitive in the global economy.
Clearly, more efforts need to be made to nurture and develop North American talent domestically as well. Young people need to be encouraged and financially supported to attain the highest educational levels possible. The entrepreneurial and innovative spirit that fuels places such as Silicon Valley — and can revitalize industries in other cities — needs to be unleashed and cultivated. In addition, the global nature of today’s organizations — with lightening-speed connectivity between any points on the globe — provide ways to tap into talent even if they do return to their home turf. Remember, this flows both ways — businesses from other parts of the globe need North American talent as well.