As many as 100,000 Indians and an equal number of Chinese will return to their native countries in the next three to five years, a move that will greatly boost their economies and undermine technological innovation in America, a new US study warns.
The study on immigration by a team at Duke, Harvard and Berkeley universities led by Vivek Wadhwa, an Indian-American technology entrepreneur turned academic, says ‘America’s loss is the world’s gain’.
There are no hard numbers available on how many have returned, but anecdotal evidence shows that this is in the tens of thousands, says Wadhwa, executive-in-residence for the Pratt School of Engineering at Duke University and fellow at the Labour and Worklife Programme at Harvard Law School.
‘With the economic downturn, my guess is that we’ll have over 100,000 Indians and as many Chinese return home over the next three-five years,’ says Wadhwa. ‘This flood of western educated and skilled talent will greatly boost the economies of India and China and strengthen their competitiveness.
‘India is already becoming a global hub for R&D. This will allow it to branch into many new areas and will accelerate the trend,’ he says.
‘The US has always had the luxury of being arrogant about immigration because it has been the strongest magnet for the world’s best and brightest,’ but as the study shows ‘there are other strong magnets now’.
‘We are effectively exporting our economic stimulus. Policies like those which the US just enacted which prevents some banks from hiring foreign workers will have the opposite effect from what they intended–they will send jobs abroad and scare away top talent,’ Wadhwa said.
The study released Monday Ewing Marion Kauffman Foundation, based in Kansas City, Montana, indicates placing limits on foreign workers in the US is not the answer to America’s rising unemployment rate and may undermine efforts to spur technological innovation.
The two-year study covered 1,203 Indian and Chinese subjects who had studied or worked in the US for a year or more before returning home.
Immigrants have historically provided one of America’s greatest competitive advantages. They have come to the United States largely to work and have played a major role in the country’s recent growth. Between 1990 and 2007, the proportion of immigrants in the U.S. labor force increased from 9.3 percent to 15.7 percent. Approximately 45 percent of the growth of the work force over this period consisted of immigrants. Moreover, a large and growing proportion of immigrants come with high levels of education and skill. They have contributed disproportionately in the most dynamic part of the U.S. economy–the high-tech sector. Immigrants have co-founded firms such as Google, Intel, eBay, and Yahoo. And immigrant inventors contributed to more than a quarter of U.S. global patent applications.
Since even before the 2008 financial and economic crisis, some observers have noted that a substantial number of highly skilled immigrants have started returning to their home countries, including persons from low-income countries like India and China who have historically tended to stay permanently in the United States. These returnees contributed to the tech boom in those countries and arguably spurred the growth of outsourcing of back-office processes as well as of research and development.
Who are these returnees? What motivated their decision to leave the United States? How have they fared since returning?
This paper attempts to answer these questions through a survey of 1,203 Indian and Chinese immigrants who had worked or received their education in the United States and returned to their home country.
We find that, though restrictive immigration policies caused some returnees to depart the United States, the most significant factors in the decision to return home were career opportunities, family ties, and quality of life.
Keywords: Immigration, entrepreneurship, India, China, workforce, labor migration, policy
Working Paper Series