Is the US Losing its Ability to Attract Highly Skilled Migrant Workers?

 
 
New Book: As debates sharpen on the benefits and drawbacks of migrant labor, William R. Kerr's new book explores why global talent flows matter to national economic development and security. Book excerpt and author interview.
  • Author Interview

Interview by Martha Lagace

The migration of high-skilled individuals around the world is shaping our lives and future wherever we live and work, says HBS professor Bill Kerr, a scholar of entrepreneurial management and the future of work. He is the Dimitri V. D'Arbeloff - MBA Class of 1955 Professor of Business Administration.

His new book, The Gift of Global Talent: How Migration Shapes Business, Economy and Society, to be published October 2, focuses on the benefits and pain points of high-skilled migration.

“Globally about half of skilled migrants are female. Countries and firms that want to benefit from global talent need to be able to welcome women”

“We explore why global talent flows matter so much, from superstar scientists to white-collar workers. There are many parts worthy of celebration, but also many parts to critique,” Kerr writes. He aims at providing a foundation for better conversation and information, clearer pathways to knowledge sharing, and more insightful policies.

Martha Lagace: Why do you focus your book on global talent flows?

William Kerr: I focus on the policies and business implications of high-skilled immigration due to the powerful way that global talent connects to our companies and the particular set of policies that govern their admissions. I want to uncover how this part of our business, economic, and social landscape operates and to argue, hopefully in an accessible format, for ways to make this process better.

Some readers and managers may not be aware, for instance, that globally about half of skilled migrants are female. Countries and firms that want to benefit from global talent need to be able to welcome women. Similarly, some managers may not know enough about the key role of firms and universities in effectively determining who can migrate to the US for schooling and subsequent work. These pathways distinguish high-skilled immigration for America from what we see in other countries that have points-based systems, for example.

An important starting point is firms. A firm like Apple or Vodafone is asking questions like: “How are we going to run our latest digital marketing campaign? How will we build the analytical staff for our new operations? Who is going to design and service our chat bots?” There are many particular needs and tasks that companies have when they look to global talent. Companies fight for accessing talent today, and this short- to medium-term business and policy environment is the focus of the book.

We also recognize that, over the long-term, broader migration impacts our talent levels in the United States. No question, the American Dream has always been that someone could arrive penniless and work their way upward by becoming more educated, creating their own business, etcetera, if not for themselves then for their children. I recognize and appreciate these aspirations and goals, but the book spends less time on this front, as policies related to general family-based migration into America are quite distinct from those used by employers for global talent.

Lagace: Not everyone benefits equally, as you make clear.

Kerr: Right. The book brings to the surface both who really obtains the gift of global talent—who benefits the most from this gift—and also who does not benefit or gets hurt. I have a strong opinion, quickly evident to a reader, that overall the migration of talented people around the world has been a big benefit. The ability to match individuals to the best places to use their skills and passions can generate extraordinary economic progress, and we can all connect into and benefit from that growth.

But this potential does not mean everyone shares in the gain. The book points to some easy winners: the wage gains of migrants, the benefits to the companies that sponsor and employ them, and so on. These are easy cases, just like greater innovation. But let’s recognize also that some people are hurt. The book discusses older tech workers who face weaker employment opportunities and slower wage growth due to global talent flows. I also start a chapter using protests against tech companies that erupted in Silicon Valley due to the rising inequality and high cost of living in San Francisco as global talent has crowded in. These tensions have become ever more prominent.

When highlighting pain points, I always try to link it back to the fundamentals: Here are the underlying economics, the business rationales about how firms pursue the visa process, and the policy space that determines what high-skilled immigrants can do when they are being brought into the US. This will help us understand why these outcomes happen. My book is titled The Gift of Global Talent and I am clearly arguing that high-skilled talent flow is a gift. But the gift is far from perfect right now, and there are ways to make it better.

Lagace: The H-1B visa process began with the Immigration Act of 1990, as you explain. What trends do you see?

Kerr: There are several programs for employment-based migration to America. The one that has captured our attention and still retains features from its beginnings in the 1990s is H-1B. Science and engineering was part of it in the early days but was not anywhere near as dominant as today. Any migrant in a specialty occupation, whether as a pastor, advertising executive, or academic, for example, can potentially enter the country on an H-1B. What the book walks through is why STEM work and in particular computer programming have become so important. Today these fields comprise about three-quarters of inbound admissions for firms.

I unpack this process in detail but in essence it is a first-come, first-serve visa, it has minimal requirements and regulations, and it is not a points-based system. Companies have found the H-1B can be a major lever, subject to getting the scarce visa, be they a US-headquartered company or a foreign company setting up US operations. Migrants can work as computer programmers, software designers, scientists, and engineers, or work on outsourcing projects. Because the H-1B program is so flexible, increasingly tech companies and companies connected into STEM work and computer programming have been lining up and taking ever-greater shares of the visa.

"Every country needs to think about what enables this world of global talent and the companies they are connected with to be part of their economy"
At the same time, I point out that individual countries need to think carefully about their position in global talent flows. In finance and trade we have global organizations like the World Trade Organization to debate and guide policies and frameworks, but for high-skilled migration or migration more broadly there is no similar organization. Instead it comes down to how countries operate and, in cases like the European Union, how a regional structure is set up. One of the important consequences is that sometimes in trade policy smaller countries get extra voice, but in migration the choices are made country by country. Thus, policies enacted by the US or China or others can play a disproportionate role.

Lagace: How can smaller countries gain a foothold in global talent flows, their own and other countries’?

Kerr: Every country needs to think about what enables this world of global talent and the companies they are connected with to be part of their economy. While remittances are an important development pillar, it is critical to think strategically about accessing high-skilled talent and its employment aspects, such as recruitment and retention. Do the policies of your country push global companies away? Similarly, it is often hard to spot talent, and rising inequality makes this task even harder for those disadvantaged. It is important to have opportunity for everyone; and from the point of view of “Are we making the most of our talent?” this is a loss.

While emerging economies may not be able to say, “The next Silicon Valley is going to be here” because other places are better positioned, it is important to economically integrate and provide stronger local jobs and opportunities. There has long been a debate that I write about in Chapter 8 about “brain drain” or “brain gain.” The classic “brain drain” narrative was that when a young person went away it meant a loss from her home country. And yet we have many examples of countries clearly benefitting from some of their talent going abroad. That “brain gain” is particularly true when you have an opportunity to integrate in a scientific or business way, including through entrepreneurship, with what is happening globally.

But it is naïve to say that every single country around the world benefits when its talented people go abroad. If a country is small, if there is little reason for people in Silicon Valley, Berlin, or Dubai, for example, to want to integrate in a business and technology sense into where the person is coming from, it is hard to see how enough benefit will accrue or go back to make it truly a brain gain.

“I worry about the gift of global talent becoming less and less and less for the US”
The inspiration of role models may help. Countries also often benefit as people invest in education to possibly migrate, but then choose not to move away. Another way global talent can benefit a home country is by activating the affinity that most people feel to a greater or lesser degree to their home country. It will be a much stronger mechanism, though, if there is a reason why the company employing someone sees great opportunities in his or her home country. The more you are able to reinforce a personal bond with an economic and business logic, the more powerful the connection is going to be.

Lagace: As you write, while the US has benefitted enormously from global talent, it cannot expect to continue indefinitely. Could you elaborate?

Kerr: The recent actions of the Trump Administration have definitely made it harder to use the H-1B visa system. But, a bigger concern for me is the rhetoric surrounding high-skilled migration and the uncertainty this has placed on whether global talent considers America its first choice. What has led to the US still being so successful was that there are great opportunities here and people understood what they were getting into. The visa process was never enjoyable nor user friendly, but at least one understood the process and rules of the game.

I worry about the gift of global talent becoming less and less and less for the US. There were already strong headwinds facing America to retain its special position. We can see, for example, the broad economic development of India and China, the huge, young, educated workforces that are going to be present in emerging markets, the efforts of multinational companies to reach global audiences, and the growth of universities and research areas in other countries. All of these changes can be celebrated because they mean greater global development, but it means more competition for America to attract and retain global talent.

I am not an alarmist in believing that global talent will disappear tomorrow. While America has its challenges, today there is still no other country able to deploy high-skilled global talent at the scale the US does. America can provide cities ranging from Miami to Seattle, and everywhere in between, and has been the world’s leader in immigration for many decades.

But if the US wants to continue being the lead in the global talent space, it needs to make sure it is doing its best to nurture and sustain that role. And, for many years well before the 2016 election, the US has been neglecting this task.

There are important questions, and the book is bringing us up to speed about where things stand to make the future together.

Interview conducted September 20, 2018. Transcript edited for length and clarity.

  • Book Excerpt

The Global Talent Race

from: The Gift of Global Talent
by William R. Kerr

The chapters ahead describe how America came to [its] leading position and its impressive strengths. However, the U.S. has often taken its special position for granted and has done little recently to make itself more attractive. This contrasts sharply with the efforts countries are taking to become more competitive for talent. During periods when the U.S. system has been particularly frustrating, billboards cropped up around Silicon Valley to advertise moving north to Canada!

As the hostility toward immigrants increases in America, Canada is doubling down with new programs like its Global Skills Strategy to lure in innovative companies. Beyond just making visas available, Canada promises employers [that] “a new dedicated team at Employment and Social Development Canada (ESDC) will provide all Global Talent Stream employers with streamlined, client focused service ... [including] faster processing of your Global Talent Stream applications with a service standard of 10-business days ... [and] personalized, high-touch assistance throughout the assessment process.”

Countries that have historically had lower rates of skilled immigration are also exploring how to attract talent. Some efforts are symbolic—Malaysia literally rolled out the red carpet for immigration lines at some airports to signify the importance of talented individuals (a far cry from the heavy-handed shake-down of many immigration queues!). Other countries are aggressively challenging conventional wisdom. Start-Up Chile is a program that pays foreign entrepreneurs $40,000 to stay in Chile for at least six months, only requiring that visiting entrepreneurs participate in local community events that help build Chile’s start-up culture. This is far from a typical use of taxpayer funds, and the program is unlikely to land the next WhatsApp. But it is helping Chile build a global business network to foreign talent.

Migration patterns are not immutable laws of nature, even with America’s enormous head start. Through these and other programs, countries are seeking to close the gap bit by bit and become more attractive to talent migrating locally in their own parts of the world. Skilled worker migration is the outcome of a complex process that involves firms, universities, and national governments. Not everyone gets their first choice of country, and many countries likewise don’t get their first choice of talent. To make progress, let’s start with the migrants: Why do they move?

Excerpted from The Gift of Global Talent: How Migration Shapes Business, Economy & Society, by William R. Kerr, (c) 2018 by the Board of Trustees of the Leland Stanford Jr. University. Forthcoming from Stanford University Press in October 2018.

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