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Brain drain in US as immigrants head home

By Cai Hong (China Daily)
Updated: 2009-03-11 07:49

WASHINGTON: The United States is facing a brain drain and can no longer take for granted its ability to attract the world's top talent, according to a new study.

The Kauffman Foundation, a non-profit organization, surveyed 1,203 Indian and Chinese immigrants and found that skilled immigrants are leaving the US to return to their home countries in greater numbers. It released the study - America's Loss is the World's Gain - conducted by Vivek Wadhwa of Harvard University last week.

"A substantial number of highly skilled immigrants have started returning to their home countries in recent years, draining a key source of brain power and innovation," said Robert E. Litan, vice-president of Research and Policy at the Kauffman Foundation. "We wanted to know what is encouraging this much-needed growth engine to leave our country, thereby sending entrepreneurship and economic stimulus to places like Bangalore and Beijing."

The study said all respondents had either studied or worked in the US and subsequently returned home. Most cited reasons like a growing demand at home for their skills, better opportunities for professional growth, the need to be closer to family and friends or problems adjusting to life in the US to return.

The respondents were young with the average Indian being 35 and the average Chinese being 37 years. They were highly educated with most holding a master's or Ph.D degree in management, technology or science.

According to the study: "These returnees are at the very top of the educational distribution for these highly educated immigrant groups - precisely the kind of people that make the greatest contribution to the US economy and business and job growth."

"Sadly, given the political climate and the economic crisis, we're likely to lose even more of this human endowment."

The outflow of this talent is likely to pose a threat to US' competitiveness. Historically, immigrants have proven to be one of US' greatest competitive advantages. Between 1990 and 2007, the proportion of immigrants in the US labor force increased from 9.3 percent to 15.7 percent.

Immigrants started 52 percent of Silicon Valley technology companies and contributed to more than a quarter of America's global patents, Wadhwa wrote in a recent Business Week article. They have contributed disproportionately in the most dynamic part of the US economy - the technology sector.

In 2006, US companies founded by immigrants employed 450,000 people and reported $52 billion in revenues.

The Kauffman Foundation study said it was worrisome that up to a third of the returnees hold permanent resident status in the US or are American citizens.

Nearly half of the returnees are planning to start businesses in their home countries - for which they foresee a better success rate at home than in the US.

Interestingly, one-third of the Indians and one-fifth of the Chinese said visa issues were a strong factor in their decision to return, which indicated that placing limits on foreign workers in the US cannot be the answer to the country's rising unemployment rate.

For instance, the stimulus bill imposes tough new restrictions on H1B visas for highly skilled workers hired by companies getting bailout money - a sign that the country is turning inward, despite the cost to America's long-term competitiveness.

"While some have tried to associate the increase in foreign workers over recent years with the economic problems that have plagued the country, this data verifies the opposite effect," said Wadhwa. "If the US government and the business community could find better ways to offer good jobs in tandem with less restrictive visa policies for talented immigrants, the US might be able to recapture many of these immigrants and their potential to help grow the US economy."