Forget Brain Drain. The Truth Is Israel Gains When Talent Goes Abroad.
The much-deplored ‘escape of the brains’ has actually brought closer ties with Silicon Valley, India, and even Taiwan
Last week I received yet another email from Israel’s National Brain Gain Program, the government initiative devoted to reversing what has been coined in Hebrew brichat hamochot—literally, the escape of the brains. Both the concern over the departure of highly educated and skilled nationals to other countries and the initiatives to encourage their return are not unique to Israel. The latest panic over the bricha seems to have reached new heights, triggered in part by a new report from the Taub Center for Social Policy Studies showing that the emigration rate of Israeli academics is among the highest of Western countries and that Israelis are disproportionately represented in academic institutions abroad.
The figures are striking: The number of Israeli physicists on top-40 American faculties is a 10th of the entire corps of physicists in Israeli research universities, and top Israeli chemists in America represent an eighth of the entire discipline in Israel. In philosophy that percentage nearly doubles. But the most alarming statistics lie in economics and computer science, where the number of Israelis teaching in the United States is roughly a third of those who remained at Israeli universities in each discipline. “Some of the leading U.S. departments have no less than 5-6 Israelis each,” the report said. These figures appear to be far higher than in any OECD country’s parallel migration of researcher to the United States and prompted Finance Minister Yair Lapid to speak out against those “who are prepared to throw away the only homeland the Jews possess simply because life is more comfortable in Berlin.”
But how concerned should countries like Israel—nations that invest heavily in education only to see graduates move abroad—actually be? Not very, it turns out. In a report I recently co-authored for the United Nations Industrial Development Organization, one central insight emerged: For these nations to thrive, they must encourage and facilitate their international knowledge networking capacities. Economic geographers call this concept “brain circulation”—the flip side of the dreaded brain drain. A country’s connectedness, it turns out, directly influences its economic development in a multitude of ways. One example is that skilled emigration is significantly and positively correlated with foreign investment in the country of departure.
On a global scale, the human capital pool has become key to understanding the challenges of development. An enduring puzzle for development economics has been why similarly situated countries diverge so significantly in their rates of growth—but economists now understand that far beyond the mere raw access to capital and labor, the availability of local knowledge and human capital are crucial for a nation’s success, and regions that both encourage open circulation of talent, and compete most fiercely to keep talent, win the most.
In the Israeli government’s own brain-drain figures, there is a certain battle of numbers in play. The national statistics bureau counts as migrants any Israeli living abroad for over a year. But so many of those living abroad stay for just several years, and, when looking at the actual evidence per year, the numbers of returning Israelis is not all that much lower than the number of those moving abroad. Nevertheless, in 2012, Israel ranked 30th on the list, a drop from its rank of 23 a year earlier that stemmed more from an increase in connectedness for other countries than from a change in Israel’s ties—a sign that policymakers around the world are putting in deliberate effort to increase the knowledge networks and ties through collaborative research efforts and information exchanges.
Many entrepreneurs, much like academics, boomerang frequently. They spend some years abroad, return, and then repeat. Most notable among these brain circulations, both in academia and high-tech industries, are the back-and-forth travel between the United States, Japan, China, Israel, and India. It was these inter-regional hoppers that brought the model of high-risk venture capital investment in early stage start-ups to Israel in the early 1980s. The founders of Check Point, Israel’s premier network security company, followed this pattern of circulation, and, more recently, so did the founders of Waze—the traffic app that was acquired by Google this year in the biggest deal yet for an Israeli technology company.
Indeed, Waze is a good example of the importance of transnational human capital. We know that in regions with dense professional networks and rich human capital, like California’s Silicon Valley or Israel’s so-called Silicon Wadi, each inventor becomes more inventive, which has enabled technology and biotech industries to grow exponentially fast—and it is specifically the cross-fertilization of creative people that drives the phenomenon. Even in the age of Skype and Dropbox, a great deal of knowledge transfer continues to rely on direct human communication. Many of the most important innovations and scientific breakthroughs are frequently difficult to transmit by sitting on a conference call—or simply by reading a patent application document or a scientific journal. Important knowledge remains tacit rather than codified.
Waze operated in a Silicon Valley office, which included the company’s co-founder and president Uri Levine, long before the Google offer. Perhaps not unrelated, though separated from the actual Waze deal, Google chairman Eric Schmidt’s private investment fund, Innovation Endeavors, is managed by Dror Berman, an Israeli who came to Stanford after his military service at the IDF. Rather than looking at these talent flows as a net loss to Israel, taking a brain circulation perspective often points to an overall gain. The real analysis of “brain drain” should take into account not only the costs of skilled nationals living abroad but also the benefits of diaspora networks.
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