Thursday, October 28, 2010

Organized brain drain?

Yesterday I was chatting with a friend of mine who works with an IT firm in Bangalore and he stated that most of the people from our batch of engineering 2002, are now working abroad.

The increasing debate about outsourcing needs to also look at another dimension of this business model which is the loss of qualified people from India to the western economy. It is understandable that with an unemployment level close to 9% in US, there is going to be strong political pressure on the government to use all possible ways to reduce loss of jobs but that cry doesn't imply that outsourcing has only given economic dividends to India. Its not that one party's loss has been the other party's game alone. The net result has been a mix of wins and losses for both the countries. It therefore depends upon what you see and what you don't want to see.

This is how it has worked in India so far. People complete their graduation from Indian universities. Once they are through with it with all their hard and soft work, they adopt two routes to enter the developed world:

1. Go for higher studies. Once they are there, they fall in love with the culture, work environment, opportunities, money and decide to trade it with the possibilities of coming back. Many a times the higher studies is in such a niche area that it may be difficult for the person to come back to the native country.
2. Work in an IT company. Wait for an 'on-site' opportunity. Seek a better opportunity and stay there
3. Seek a work opportunity in US directly. This is a difficult possibility considering that there are employable people out there in US looking for jobs

Personally speaking its a complex sentiment to have towards seeing people from your batch settling well at the same time you realize that for ones own country, its really not that great a news. We are free to make our choices whatever they are as long as we don't intend to do any conscious damage in the process. The point is this otherwise innocuous way of going to the western world- which is primarily 4 to 5 countries (US, UK, Canada, Germany majorly come to my mind ) has lead to phenomenal loss of trained and capable human resource which could have otherwise tempered employability debates that we read in our newspapers on a day to day basis. The fact that only 4% of our graduates are good enough for working in IT product based companies while Microsoft office of Redmond has a major chunk of people from India etc. Or for that matter the number of doctors from Indian origin in UK while our rural hinterlands languish due to dearth of health care facilities. Yes, government has a lot to be blamed for this too.

The reason it deserves significance is that the IT industry which has brought tremendous glory to the country is now going to be very much part and parcel of the way we live and move. Thus the silk route from India to the US is not a distant possibility or a matter of chance. Its an 'organized emmigration route' which is much lauded by one and all.

There can be few reasons for lack of concern on this front:

1. The boost in economy as a result of remittance of people settled abroad (though i am not sure what that value is)
2. Lack of efforts in the direction of research on this subject in the country. It is likely that someone in some foreign university may do a PhD in understanding the impact of outsourcing model of IT sector on brain drain.
3. The Indian economy is doing well and hence we don't mind this leakage of intellect. Thankfully this has lead to some reverse brain drain but I am still not sure to what extent has it been able to check the flow of talent.

Immigration into areas of better opportunity and living has been a trend since atleast past few centuries since transport across sea routes became easy. Which was around 17th century.

History has instances of Britishers getting enamoured by the excellent weather conditions and highly favourable land vs people ratio of US and bought huge tracks of land over there to settle down forever. Records state that around 175000 people migrated from British to Colonial US during 17th century. The rule of communism in Eastern Europe lead to a huge migration of people from these countries which has enriched US economy like anything. The US government realized the value in opening its doors to immigrants after seeing the value that they bring to the table. In fact poor governance in other third world countries has immensely helped US and its economy. Secondly the culture of the country which is based on the principle of individualism and libery gives ample space to whosoever wants to enjoy a comfortable life. The moment you move from a repressed culture or economy to an open one, you are bound to fall in love with it.

The point is, whose problem is it? Is it India's? What is India if not its people? Which implies when both government and citizens are happy, would anyone want to even consider it in the light of an issue worth reflection?


Ankur Chandra said...

If I am not wrong, number of IT jobs in India is currently between 2 to 3 millions. People going onsite is may be 10% of this number only. So, its just a business model which is doing wonders for India.
Though I understand the intent of your article, I feel that IT is probably not the right example here.

Ujjwal said...

Ankur, I am talking about IT not as an example but a subject to be looked at from the point of view of how it has both benefited the economy and individuals and at the same time encouraged brain drain. Another grey area.

Its about sociological implications of two phenomenan- Globalization and the Global Delivery Model of IT industry.

According to me a steady loss of people over a period of time is a point of concern. 10% of the 2 to 3 millions is around 20000 to 30000 people per year. Any nation with a sense of value of talent cannot afford to ignore that number.

Can we deny the trend?

Nitin said...

I just want to present some facts

1) NRIs remitted $53 billion last year. That's just the remittance not the money people spend when they visit India to get their children married etc.

2) Just Opening up the economy is not enough. NRIs are acting as brand India ambassador around the world to tell the story and the possibility of ties with India. NRIs work as marketing agents for India around the world.

3) NRIs provide critical mass for cultural sharing. Any artist or fund raiser wouldn’t be able to conduct a show abroad if NRIs don't provide the critical mass. This opens enormous opportunity for sharing.

4) A large number of NRIs in developed country can also influence political decisions in favor of the country.

5) When people move to new places, others related to them are also able to see a different world, different ideas and that opens door for other creation/imitation.

6) China is sending more than double the people India sends to the US every year for a number of years. I don't think that US china ties would have been the same if there were not so many Chinese people in the US.

7) It is very difficult to calculate the net loss. For example if 50,000 people leave the country every year. They create 50,000 vacancies which are filled by other people. Economically net loss is much lower. It is tragic for any country to lose people but this could be debatable for a country with 1.1 billion people and limited resources.

Ujjwal said...

Thanks for the detailed thoughts, Nitin. Based on data as ever :)

We surely can't deny the fact that people settling in the west has benefitted to a significant extent.

Whenever i read about people like Vinod Khosla and several others who are now noted professors like Jagdish Bhagwati, Raghuram Rajan etc I feel the value that these people are adding is phenomenal.

I have never seen economic value as a be all and end all of value of human existence. We all are worth that and probably much more as well. I would say solving key problems of society, starting of institutions etc is where human mind is needed urgently.

Particularly talking about the last point on 50000 jobs getting created, please note that there is a clear scarcity of skilled human resource in variety of industries in the country today including IT. Be it education which always finds itself short of talent (implementation of RTI is short of few lakhs of teachers), manufacturing sector, starting good schools, product companies etc. Not stating that people who are going to the west are anywhere responsible but the fact of the matter is that there is no dearth of work.

Even if talk about exodus of semi skilled labour, then Kerala will be a good example where there is acute shortage of people on account of steady flow of people to the gulf since decades. Kerala's economy is jokingly termed money order economy primarily because 20% of the GSDP depends on remittance.

Thus though there is great value in cultural interchange, branding of one's country, I really don't perceive that they are hard benefits per se but yes, benefits they are undoubtedly.

Starting one hospital like Arvind Eye Care or Narayana Hrudalaya is where the western experience can be ideally ploughed back.

Till then the payback would be more secondary by nature. Like spending on wedding. Yes, the economy benefits. But as a by product just like it benefits when tourists come to see Taj Mahal. But we can't expect anything mroe from the tourists either. They don't belong to the visiting nation. They are guests.

Similarly the amount remitted by people back is great but still we can't say how much value they would have generated had they decided to plough back that money or skills in starting something of lasting value.

Its really a mixed bag i feel.

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kiran said...
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kiran said...

Government can play a crucial role by creating polices to attract NRI to come back to India to set up industries/companies/institutions and cater to the need of India. Already many NRIs are coming back to India due to the fast economic growth. I think best thing for India would be to attract brains back rather than curbing brain drain.