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Saturday, November 26, 2011

 

Economics: Brain Drain, Brain Gain and Brain Circulation

For economic growth a company or a country as whole need human capital. More importantly, skilled workers are engines of the innovation that allows a company or a country to stay competitive; not only nationally but also internationally. A couple days ago I was reading news on the internet and I came across an interesting topic in one of UK newspapers Telegraph. The story was by Rebecca Smith “African Countries Losing Doctors in the “Brain Drain.” Building on thought of freedom of movement and pursuit of happiness the topic raised many questions in mind that enticed me to read further. In my readings, I found that not only there is a brain drain, but also “brain gain, brain circulation. The question is what does this mean on economic perspectives.  In his book:  “Naked Economics, Undressing the Dismall Science, Charles Wheelan wrote: “Human capital is the sum total of skills embodied within an individual: education, intelligence, charisma, creativity, work experience, entrepreneurial vigor, even the ability to throw a baseball fast.” (Wheelan 127).
It should be noted that no matter how developed a country’s economy is, there is always a shortage of skilled workers in various fields such as medical, engineering, management - just to name few and this is a shared burden across the world but dynamics are of course different. Talking about professional migrants from developing nations such as those from Africa or Asia, they do so for various reasons.  Some decide to leave their home countries to the west in the hope that they will get a better life, better job and better prospect. According to Dr. Harley Balzer, Associate Professor of Government and International Affairs at Georgetown University - audio presentation at the Center for Strategic and International Studies of April 14 2010, “People migrate to other countries in response to economic conditions and try to maximize their options.” He continued saying that there is an estimate of 35-40 million Chinese who live abroad and this exodus started in 1978 (not all of them are skilled professionals).
 Hence, while the migration of skilled human capital is still debatable on who benefits and who loses, some would argue that people have the right to move and live wherever they want (when applicable). However, when it comes to brain and drain, Ms. Smith asserts: “In total the nine sub-Saharan countries in the study lost the equivalent of $2billion as doctors left the continent to work overseas while the UK benefited by the equivalent of $2.7billion and America benefited by $846million.” Also, the brain drain might be true when you read the following segment of the World Bank report on Sierra Leone  on the htt://irinnews.org/report.aspx?reportid=82755 :  “In Sierra Leone, for a population of more than five million there are 75 state medical doctors as of February 2009, according to the Ministry of Health.”
Clearly, losers are countries where skilled professionals are coming from. First, in many circumstances political unrest, civil wars and poor governance do not give much of options to skilled human capital other than leaving their home countries. In quoting Mr. Gary Becker speech, Wheelan, wrote: “While all forms of capital-physical capital, such as machinery and plants, financial capital, and human capital- are important, human capital is the most important. Indeed, in modern economy, human capital is by far the most important form of capital in creating wealth and growth” (Wheelan 134).
Conversely, the brain circulation also exists. For example some people may go back to their countries after studying in developed countries. Dr. Balzer contended that a good fraction of some Chinese who studied abroad return back to their countries to apply acquired knowledge.  In this light, China and India have recognized the importance of investing in human capital by putting more focus and effort in education. According to Uttara Dukkipati, “The growth of China’s higher education sector provides a good example of how private investment can be used to improve the status quo.” He added saying that “According to Venture Intelligence, in 2000, the Chinese tertiary enrollment ratio was 6 percent and the regulation on for-profit participation in higher education was murky. In 2002, the government issued a law permitting for-profit participation in the higher education sector. China’s higher education enrollment increased from 14.7 million students in 2002 to 23 million by 2006.”
The aforesaid examples indicate that there is a striking correlation between a country’s level of human capital and its economic well-being. As long as the unrest, poor governance, lame economic growth and political instability continue, people will always try to maximize their options and try to respond to their economic conditions.

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