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Mobilizing Talent for Global Development

by Andrés Solimano

Talented individuals such as students, professionals, information technology experts, entrepreneurs, cultural workers, and others are now more internationally mobile in the world economy as a response to new opportunities (and risks) that are offered by globalization. This trend has been reinforced by the greater information flows on economic opportunities and life-styles in different cities and countries across the globe and by lower transportation costs. 

The project on the International Mobility of Talent undertaken by WIDER in Helsinki in collaboration with UNECLAC in Santiago examined the various dimensions of the international mobility of human talent and its development implications on source nations (often developing countries), recipient nations (often rich countries), and on international development. This article reports results from this project.

Types of talent mobility

There are three broad types or groups of talent mobility in terms of their motivation and development impact, namely, the mobility of (1) entrepreneurs, technical talent, technology innovators, and business creators; (2) scientific and academic talent and international students; and (3) health professionals and cultural workers.

The first group of talent has a more directly productive impact through business creation and application of new technologies on host and source countries, particularly in this era of information technology. The second group is related to the production of science and knowledge in general, although their productive applications for industry, the service sector, and government are more indirect. The third group is related to the provision of a critical social service, such as health services, with some complex impacts on the source countries; the mobility of cultural talent, in turn, reflects both an aesthetic value as well as the manifestation of creativity that can be highly valued by individuals and markets.

The impact on development

From a global perspective, world income should be higher with more mobile human capital, as the marginal productivity of human capital in the world economy increases when talent moves from countries with lower marginal productivity to countries with higher marginal productivity. As a result, there is global efficiency gains associated with an increased international mobility of talent. This analysis, however, has to be qualified as it does not consider the international distributional impact of the costs and benefits of such migration flows between sending and receiving nations. 

Economic impacts in receiving countries

The relation between growth and international migration of talent in the country that receives the migrants can reflect a mutual causality: rapid growth, expanding opportunities, technological discoveries, and land/ natural resource availability in the host country generates a capacity for unskilled labour and for talent as the domestic supply of those human resources may be insufficient to meet the increased demand. Then, growth and opportunities may precede the mobility of talent. Historically this was the case of Argentina, the USA, Canada, Australia, and other countries of the New World at the end of the nineteenth century, which received large contingents of European migration; both of workers but also of people with entrepreneurial abilities. In turn, massive immigration allowed the mobilization of the large natural resources of the receiving countries and was the key engine in their growth process, sustaining and reinforcing the dynamics of growth and prosperity. The immigration of people with entrepreneurial abilities contributed to business creation, resource mobilization, colonization, and innovation—all factors that supported rapid economic growth in the countries of the New World in the first era of globalization (pre-1914).

More recently, in the 1990s, entrepreneurial immigrants from India, Taiwan, and China to Silicon Valley in the USA have provided a valuable human resource in the creation of high technology industries, both in hardware and software in the receiving country. They have engaged in business creation and output growth in the high-tech sector contributing to economy-wide growth. And their return migration has helped to drive the acceleration in growth in recent years in some of these countries.

Economic impacts in source countries

In the source countries an outflow of entrepreneurs may depress innovation and growth. Likewise an outflow of people with high educational levels also reduces the stock of human capital with a potentially negative effect on domestic growth. This is the traditional brain drain effect. However, this is not the end of the story as emigration raises the returns on investment in human capital (under decreasing returns as the stock of human capital is lower) thereby inviting more investment in education with future positive growth effects. In this case, the ‘brain drain effect’ of emigration of talent has to be counter-balanced with the ‘brain gain effect’. At the same time, if emigration follows a cycle and the emigrant returns home bringing fresh capital, contacts, and knowledge we have a positive development effect for the home country. In Taiwan in the 1980s and 1990s, the formation and development of the Hsinchu Science-based Industrial Park (HSIP) benefited greatly from return immigrant Taiwanese entrepreneurs and engineers from Silicon Valley. In fact, several successful Indians and Taiwanese in the high-tech industry in the USA set up hardware and software companies in their home countries contributing to growth in the source countries.

Recommendations

From the previous discussion the following elements of a policy and research agenda on talent mobility for global development can be identified.

First, we need better numbers on the size and direction of the mobility of qualified people and in timely fashion. 

Second, as with financial capital, human capital emigrates when the incentives structure at home are distorted and the value of talent is not properly recognized. The general point is the need for developing countries to reassess their rewards structure for talent. Poor remuneration, lack of recognition, the absence of professional tracks in public administration, and obstacles for business creation and innovation are all factors that lead to the brain drain. National tax systems also affect the international mobility of talent as international net income differentials may reflect differences in personal or corporate income tax rates across countries.

Third, to enable talent circulation for global development may require action on several fronts. Increasing the connectivity among expatriate entrepreneurs, engineers, and scientists with their home country can increase the international circulation and mobility of capital, knowledge, technology, and managerial capacities. For scientists and researchers, increased connections among universities and research institutes at home and abroad is needed. This may involve cooperation in research projects, organization of joint conferences, institutional agreements, fellowship programmes, and other measures. In the cultural sector, international initiatives such as concerts, exhibitions, shows, and cultural exchanges can also promote cooperation and enhance the circulation of talent.

Fourth, the relation between education and talent and its effects on the international mobility of professionals needs further study. From a practical point of view, mobility is affected by the (lack of) international compatibility and recognition of university degrees and professional titles earned in various universities around the world. The integration of higher education would need some common framework that enables the comparability of diverse national education systems (like for instance the ‘Bologna process’ in the European Union).

Finally, the international mobility of health professionals from poor to rich countries requires an adequate and cooperative policy response that balances the human resources needs of the source countries and of the receiving countries, and that acknowledges the individual roles of health professionals. Ethical standards for recruitment and compensation schemes are possible tools to deal with this phenomenon.​

Further reading: Solimano, A. (2008). The International Mobility of Talent: Types, Causes, and Development Impact. UNU-WIDER Studies in Development Economics, Oxford University Press.

Andrés Solimano is Regional Advisor, UN-ECLAC, former Country Director at the World Bank, and Executive Director on the Board of IADB. He is the Director of the ECLAC-WIDER project on the International Mobility of Talent.