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Accumulating human capital

The second priority is the accumulation of human capital, which can offset the negative lost-labour effect through an increase in specific skills. Instead of fighting brain drain, which in most circumstances has proved to be difficult and ineffective, policies should turn towards brain circulation (Johnson and Regets, 1998). To maximise the contribution of high-skilled migrants to the development of the home country, policy makers can promote the temporary or permanent return of high-skilled migrants as well as the participation of scientific diasporas in transnational networks or research projects.

Permanent return is a delicate issue, above all for high-skilled workers, who may experience difficulty finding employment opportunities matching their skills and interests. However, developing countries can encourage returns by giving loans instead of grants to students willing to study abroad (OECD, 2007a). In cases where students benefit from a grant and thereafter stay permanently in the host country,11 the state loses its investment; with a loan, students have to pay the money back and the state is guaranteed not to lose. However if students decide to return home, the state can forgive loan repayments, turning the ex ante loan into an ex post grant.

Some countries have succeeded in attracting back talent by creating favourable conditions for returnees, for instance by recognising foreign diplomas and offering a wage premium to high-skilled returnees, particularly for public service. China, for example, adopted in the 1990s a series of preferential measures for returnees, such as elevating their professional titles, allowing them to work in cities other than those from which they had emigrated and increasing support for higher education and scientific research (Zweig, 2006).

But, for most countries, it is easier to promote brain circulation by encouraging high-skilled workers to return for short-term visits and to teach or take part in co-operative projects. This generates positive externalities through transfers of technology and information.

Human capital strategies also rely on the capacity of public authorities to consolidate scientific diasporas and mobilise both human and financial resources (Kuznetsov and Sabel, 2006). High-skilled expatriates can co-operate on research projects of interest for the development of their countries of origin. The rapid improvements in telecommunications have enabled the expansion of transnational networks, strengthening the links with members of the scientific community abroad (Meyer, 2010). Expatriate talent can also help transfer technology and knowledge, even when the conditions at home are not necessarily optimal. Despite the lack of a real innovation policy in India, the diaspora invested in the software industry, thus creating the basis for high-tech development (Devane, 2006).

It is also possible to link productive return and transfers of knowledge and technology through a training policy oriented towards immigrants and based on the technological needs of developing countries. Trained immigrants can go back to their countries and work in firms that benefit from technology transfers, for instance in the information technology and solar energy sectors. In Sweden the Solar Energy Foundation supports a project called Solartech that provides training on solar energy to African immigrants who have the opportunity to go back to their home countries and work in firms that benefit from the transfer of technology provided by the foundation's programme.12 These types of initiatives foster not only the reintegration of returnees but also local development.

Finally, a push for regional brain circulation would yield a more efficient allocation of human capital between developing countries. Such a policy could focus on the following three points:

  • • Student mobility: the lack of financial resources in universities in developing countries can be overcome through the creation of specialised academic clusters. Reinforced by scholarship-supported mobility, this would have the benefit of attracting students from other countries in the region.
  • • High-skilled workers: creating and improving conditions so that experts and qualified labour can access quality jobs in the region. These conditions should be adapted to both short and more structural, long-term demand.

• Transnational scientific networks: supporting scientific co-operation through the development of regional projects while incorporating communities in the diaspora.

 
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