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03 March, 2009

Tracking a reverse brain drain to India, China

News feature
New America Media

Editor's Note: Vivek Wadhwa has been tracking the effects of globalization on labor markets as a professor at Duke University's Pratt School of Engineering and Harvard Law School's Labor and Worklife Program. A survey he authored with the Kauffman Foundation and released today polled more than 1,200 Indian and Chinese high-skilled immigrants and found a reverse brain drain back to their home countries. NAM editor and New America Now radio host Sandip Roy spoke with Wadhwa about the trends and future of labor markets.

Vivek Wadhwa, so who is going back? What's the typical profile?

The typical profile is that they are 35 years of age, they are highly educated, the majority of them have Master's and PhD’s, and all of them have been successful here and they are doing better back home.

On average, how long have they lived here?

Apparently five to 10 years. We didn't actually ask that question in our hour interview. It varied.

What kind of numbers are we talking about in terms of the numbers of people going, is it too early to call it a “reverse brain drain”?

This is where you have to get into estimation mode, because there is no data available, because no one keeps track of how many people go back as tourist or who go back to work and so on. But based on all the research I've done, my guess is over the last 20 years you've had 50,000 each going back to India and China. Before I used to say that 50,000 more will go in the next five years. Based on the economic downturn, my prediction is that 100,000 skilled workers will return, both to India and to China, over the next five years or so. I call this a reverse brain drain.

You found these people for your survey using something like LinkedIn?

Yes, in fact what we did was we tried many ways to get in touch with returnees, and what we found was that the vast majority that are going back from here, still stay connected through their colleagues here, and LinkedIn happened to be a good source for tracking them down.

Many of these immigrants came to the United States for professional reasons or for education, and then they stayed on. What's pulling them back now? Are they unhappy with their lives in America or just impressed by what's going on in India and China?

It's been changing over the last decade or so. Initially they were going back for family reasons: they felt homesick, they had relatives back home, and they had obligations to their families. A lot of people went back home because of family reasons. Over the last five years or so, many people have gone back for two reasons, number one, they see huge economic opportunities back in China and India, number two, they are having visa problems over here.

The separate discussion is the visa backlog of skilled immigrants in the United States. Right now there are over one million skilled immigrants and their families in the USA, waiting for green cards. They are stuck in immigration limbo, and if you're an Indian in particular, there are probably about 350-400,000 Indians waiting for green cards. Only 8,400 per year are given, which means you could be waiting a long time for a green card. When you look around and see how well you're friends who return to India are doing back there, why would you put up with the abuse of having to be stuck in the same company, making lousy wages when you can be a superstar back home? That's the mindset of a lot of people.

And are they really ending up being superstars back home? Are the streets really paved with gold?

Well, for example, in our sample, what we found was that 10 percent had senior management jobs in the U.S. and when they went back to India, 44 percent were promoted to manager. When you ask them how they are doing relative to how they did over here, about 60 percent said they are doing much better back home than they did over here.

Did the people you surveyed see any advantages to living in the United States?

The funny thing is the only thing they gave the U.S. higher marks for was health care benefits. Almost every other dimension, the returnees say they were better back home. In China and India, they found that the education was much better; the children were much better off. The Chinese were not that optimistic about education back home, but other than that, the majority reported that things are better back home than they are over here.

But did they have issues about readjusting back to India? I went back to India recently and met with some people who have returned. They were saying they trying not to be the typical returnee and complain about traffic and pollution, but they couldn't resist doing that either.

Yes, about a fifth of the people I sampled complained about issues like pollution, traffic, corruption, all the hassles you have when you go back home. Again, this is not in our research, based on my personal interviews, my guess is about one fifth of the people who go back to India, and apparently a third of the people who go back to China, will want to come back to the United States again, so they would become re-returnees. So, they are not all lost.

Is there a difference in how these returnees are being received in India, compared to China?

Yes, big difference. China is dependent on returnees to fuel almost all of the research and development that is happening over there. Almost all of the ranks of middle management are being filled by western-educated and western-trained returnees. In India, it was like that five to seven years ago. Today, India couldn't care less about the returnees because what they've done is they've improved their own workforce. They would rather hire domestically trained managers and R & D specialists than people from the West, who come back with an attitude thinking it's like it was 20 years ago when, in our eyes, non-resident Indians were the kings and the superstars.

But the recession that's currently underway is affecting India and China as well. How do you think this will affect these reverse-immigration trends you've been tracking?

China's growth rate is now 8 percent. India may be down to about 7 percent. That's hardly a recession. So, the opportunities are still over there. What's happening is, as people get laid off over here, if you're on a H1B visa here, or you can't get another job, you have no choice but to return home. So these people will go back home and they will be able to get jobs there, because there are plentiful jobs over there, still with the recession.

What's going to be the impact of this on the already down American economy? Right now many companies are probably kind of relieved to lose some workers.

Here's what the troublesome thing for the United States: When we lose this level of skilled talent, they are going to go home and start companies there. These people are starting companies in India and China. That's where a lot of the future innovation will happen.

The other part of it is, as the Citi banks and JP Morgan's and all these large companies start laying off employees in the United States, they are returning back home. The economy recovers. If these banks can hire the same people who were working for them over there, for a fifth of the price that they can in the United States, why would they hire them in the U.S.? What's going to happen is outsourcing is likely to gain tremendous momentum over the next couple of years, because a lot of skilled talent is now available there, much more cheaply there.

Do you see something like a Silicon Valley now really taking off in India?

Go to New Delhi, go to Bangalore, go to even Bombay and other outposts and you'll see tremendous activity in start-ups. There is a lot of energy there, a lot of optimism there. It's like Silicon Valley used to be in the late '90's. A lot of excitement about the future and the sad thing is, in the United States, we are depressed right now, basically demoralized right now. They are very upbeat in India and in China right now.

Transcription by Laurie Simmons.

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