Brain-Drain: Nationalism Fighting Globalization

Dec 2, 2022

India’s qualified professionals have chosen to emigrate to the Western hempisphere for years, seeking better employment, competitive incomes, and a higher standard of living, and millennials are eager to follow the same path.

According to the Oxford Dictionary, ‘brain-drain’ can be defined as ‘the movement of highly skilled and qualified people to a country where they can work in better conditions and earn more money.” Essentially, it is a movement of assets leading transfer of financial capital. The word ‘brain-drain’ was coined through witnessing the emigration of various technologists, doctors and scientists from the so-called ‘third world’ and developing countries to more ‘first world’ and developed nations, such as the United States, the United Kingdom, Germany, England, etc.

Several factors can cause brain-drain, namely a country’s political unrest, lack of economic opportunity, the standard of living or personal reasons. In every part of the world, there is a need for qualified professionals. Better living standards and quality of life, higher wages, access to sophisticated technology, and more sustainable political environments in developed countries, however, tend to attract professionals from lesser developed countries.

Brain-drain can be termed as ‘human capital flight’ since it is similar to capital flight through the involvement of massive financial capital displacement. It is typically seen in terms of economic cost, because emigrants generally take with them their government-sponsored education, or training from other resources. India is facing a shortage of skilled labour, particularly in crucial fields like the healthcare sector and engineering. At the same time, for higher education and jobs, a large number of trained staff emigrate each year. The trend of brain drain has an obverse impact on the host country, and another nation’s brain drain becomes a brain benefit for the receiving country.

Most developing countries, including India, one of the major nations impacted, suffer from brain-drain, and developed nations such as the United States of America have benefited from this phenomenon. In fact, migration to the US from India grew by 225% between 1999 and 2015.

As of almost four decades ago, a major accomplishment for Indians was that people and specialists had migrated to different countries in pursuit of lucrative careers and world-class educations. In 2014, a UN report named India as having the largest ‘diaspora’ population in the world with more than 16 million people from Indian origin living abroad. Indian diaspora is a geographically diversified diaspora, spread across as many as 110 countries.

The Government of India estimates that there are 30 million people in Indian diaspora spread across the world. In 2010, India, with an estimated stock of 11.4 million emigrants, was the second emigration country in the world, behind Mexico (11.9 million). In absolute terms, India is among the countries which lose the most highly skilled workers to foreign markets.

The people who migrate legally from poorer to richer lands are the very ones that third world countries can least afford to lose, the highly educated and skilled. Since the great majority of these migrants move on a permanent basis, this perverse brain drain not only represents a loss of valuable human resources but could also prove to be a serious constraint on the future economic progress of third world nations. The situation of emigration can make it difficult for a country to maintain a high intellectual standard, as many of its educated and most intelligent people leave. Educated people are key to creating a more educated and professional society. The shortage of rural doctors and specialists is well recognized by state health departments in India. Since health is a ‘state subject’, the state government recruits doctors (and other health workers) in the public sector.

The emigration of health professionals has negative effects on India, especially in rural areas where the density of doctors is lower than in urban areas. Despite increasing internal demand, India still has a very low density of doctors (0.6 per thousand people in 2004) compared with 3 in the US and 2 in Canada. Compared with other large origin countries, India records a higher expatriation rate of doctors at 8%, while the expatriation rate of Chinese doctors is about 1%. Indian physicians are estimated to be the largest “émigré physician workforce” in the world. A study, triangulating data from both within and outside India, found that over 100,000 doctors trained in India were working abroad, with the largest proportion (about half) employed in the United States, followed by the United Kingdom, Canada, and Australia.

In the 1970s and 1980s, the departure of the IIT graduates was seen as a brain-drain. Their decision to remain overseas after finishing their studies was equated to nonstop economic drainage endured by India to the advantage of developed countries. It was suggested that brain-drain deprived India of workers with scientific and technical skills crucial for its economic growth, modernization, and development.

The 2001 Human Development Report of the United Nations Development Programme estimated India’s loss from the migration of software professionals, many of whom were IIT graduates, to be as much as 2 billion USD per annum.

In a study, one IIT student settled abroad wrote, “students from IITs serve the world, but not India.” Another student noted, “most of the good students have settled abroad. They lead to brain-drain.”

At the end of the 1990s, the USA contained around 30% of the Indian software labour force. Many of these workers had been educated in Indian institutions, which were subsidized with public money, but then drained to the US due to a lack of suitable opportunities and working conditions at home. In 2000, while more than 45,000 highly qualified Indians depart India each year, around 1,500 returned from the United States. There were numerous media communications describing the successful return of several Indian entrepreneurs. These Indians established subsidiaries or even entire companies in India, but statistics revealed that only a small portion of the skilled migrants actually returned at the very beginning of the twenty-first century. However, the majority of the Indian diaspora maintained remote links, becoming drivers of knowledge and capital flow to India. The Indian government has contributed to the emergence of these links through legislative and tax rules that encourage remittances and investment from Indians residing abroad.

India was experiencing serious, worrisome brain-drain during the mid to late twentieth century. The qualified workforce left the country in large cohorts and went to the west, in particular to the United States. However, this trend has now reversed — many Indian experts, trained in the US, have returned to India bringing with them knowledge and practical experience. This particularly applies to major cities like Bangalore, Delhi, Hyderabad, and Mumbai which have received a large number of returning professionals in the IT, finance and management fields. In today’s knowledge society, in which globalization is becoming a formidable force, the flow of the workforce between markets has become normal. In fact, this concept of ‘brain-circulation’ is a vital process that contributes greatly to the development of a country.

The World Bank’s December 2018 Migration and Development Brief puts India as the largest recipient of remittances in 2018. Inward remittances to India were estimated at $79.5 billion (ahead of China’s $67.4 billion), accounting for over three-fifths of officially recorded remittance flows to South Asia, around 15% of flows to low and middle-income countries, and 11.5% of global flows. India’s remittances grew at 15.2% in 2018, surpassing the average growth rate of 13.5% in South Asia. Since liberalization in the 1990s, remittances have played a crucial role in improving India’s macroeconomic health. In absolute terms, such flows have exhibited about a 40-fold growth since 1990. Remittances currently account for 2.8% of India’s GDP, and the share has remained remarkably stable over the years.

A highly educated diaspora is a potent force for developing the local economy through remittances, trade, foreign direct investment (FDI), and knowledge transfers, with the experience of India’s setting up of technology firms as a result of Silicon Valley diaspora a prominent example. Economists have also emphasized that the possibility of migrating may spur human capital accumulation, potentially leading to a net increase in the education levels of those in the home country.

Only recently does the brain-drain trend seem to have undergone a significant reverse. There is anecdotal evidence that Indian professionals are returning to their home country in increasing numbers, with the plan of taking advantage of the new growth and employment opportunities. Some of the world’s biggest companies, such as Google, Microsoft, and Yahoo! are setting up production and offices in India. Therefore, in conclusion, it can be seen that historically, brain-drain has been a major concern and hindrance to the development of India, but the more recent brain-circulation due to globalization has proved to be rather useful to India.

The objective of a ‘Think Article’ is to bring knowledge about policies in the sphere, in context to the youth of India and, if possible, influencing the policy process. The article has no motivation to pass any political judgments.


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