The Gift of Global Talent: How Migration Shapes Business, Economy & Society

Innovation and Economic Growth

Article Snapshot

Author(s)

William R. Kerr

Source

Stanford University Press, 2018

Summary

Global talent flows drive innovation and economic growth. High-skilled workers are drawn to destinations where they can work with other skilled workers. Immigration tends to benefit everyone, although it will always be controversial because of losses to those displaced by migration.

Policy Relevance

America should abandon its current hostility to immigration. The H-1B visa program should be reformed to ensure that more high-skilled workers are admitted.

Main Points

  • Talent is our most precious resource, but, unlike a harbor or a coal mine, talent is moveable; talented people come from many countries, but increasingly prioritize a few destinations.
     
  • The productivity of high-skilled workers is enhanced by nearness to other skilled workers, so talent clusters attract even more skilled migrants; by contrast, when many low-skilled workers come to an area, it becomes less attractive to other low-skilled workers.
     
  • Skilled immigrants are admitted to the United States under the H-1B visa program, which firms can use to unlock innovation or lower labor costs.
     
  • Because of talent flows, firms are relocating to a handful of cities like London and Chicago.
     
    • Clustered tech giants could collude to fix wages or prices more easily.
       
    • Layoffs are concentrated in remote facilities far from urban headquarters.
       
  • Some see migration as a zero-sum game, as gains to host areas such as London are cancelled out by losses to “sending” countries like India, but this idea may be incorrect.
     
    • Innovation driven by talent clusters eventually diffuses everywhere.
       
    • Immigrants contact others in their country of origin, creating networks that enable the flow of capital, democracy, and ideas, and integrating the economies of places like China and India with advanced economies.
       
  • Immigration will always be somewhat controversial, but some changes to immigration policy would be supported by almost everyone.
     
    • Most agree that high-skilled immigration should increase.
       
    • The H-1B visa program should be reformed to increase the skill level of those admitted under the program.
       
  • Many workers are being left behind in today’s economy; although the future of work is uncertain, heavy labor regulation is not the answer.
     

 

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