Globalizing talent and human capital: implications for developing countries

Includes bibliography

Abstract Human capital flows can take several forms and include the international circulation of scientists, information technology experts, intellectuals, artists and entrepreneurs. The evidence shows that traditional brain drain", say a permanent and irreversible outflow of human capital, co-exists also with cycles of emigration and return of national talent ("brain circulation"). Thus, for developing countries, the emigration of domestic talent need not be always a permanent loss. However, although return rates vary from country to country, poor economies suffer particularly hard from the emigration of domestic talent. The empirical evidence point-out to a very unequal distribution of world resources in science and technology that mimics also large disparities in per capita income across nations. Rich countries spend more (as a share of GDP) in science in technology than middle income and poor countries. However, there are some significant outliers such as China and India whose ratios of spending in science and technology (S&T) to GDP are significantly higher than the international average corresponding to their income per capita levels. These international differentials in resources devoted to S&T is correlated with the observed outflows of scientists and technology experts from developing countries/transition economies to the U.S. and other OECD countries where they find more resources (included better pay) to carry out their scientific research and technology work. Policies to stem the outflow of human capital and entrepreneurship require action at several fronts: national governments of developing countries need to give a greater priority and devote more resources to science, technology and knowledge generation at home recognizing its pay-off in enhanced productivity, competitiveness and long-run development. Less bureaucracy and more friendly policies to business creation helps also to stem the outflow of entrepreneurial talent. Developed countries in turn can increase the transfer of knowledge to LDCs and redefine foreign aid priorities towards science and technology in developing countries. These national and international public sector effort in S&T can be complemented by grants from international foundations to support science and technology in developing countries supporting for example the creation, of centers of excellence among other initiatives. All this would be a powerful signal to stem the outflow of talent away from the developing world."