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Is Indian Brain Drain unsolvable? - Lessons for developing countries

Edited By: Siya Kohli


“Go to Harvard, get a PhD, become a professor there, and live the best life possible. India is for underachievers” - The Indian Uncle.


Every middle class Indian family has, at one point or another, had a dream of making one of their kids an NRI– a weird dream, but valid nonetheless. There is a common (mis)conception among the working class that going abroad and settling there with a well-paying job is the epitome of success. In 2022, more than 770,000 Indian students migrated abroad for studies to countries like the United States, Canada, Singapore and Germany. According to historical patterns, 8 out of every 10 students who go abroad for studies, plan to settle there permanently. India has the largest record of skill emigration in the world, and as shown by the graph below, the emigration gap between other advanced countries in Asia is quite stark and it is only widening.





So the problem is not that bright Indian students find foreign countries to be better places for higher education, the problem is that they find foreign countries to be a better place to live and settle down. Better work opportunities ranging from more challenging work to better salaries, and for some marginalized communities a more favorable culture, incentivizes Indian students to go abroad and stay abroad. But when these bright and ambitious young minds migrate from a developing country like India, they take their brains with them and contribute to an already rich and developed country, thereby widening the gap of inequality between the rich and the poor nations. This phenomenon has been given the name brain drain– when the highly skilled population of a developing country migrates and settles abroad due to better opportunities, they leave behind a less skilled population. This dilutes the demographic composition of the relatively poor country that requires these bright minds more than the rich one.


However, in order to understand this crisis better, we need to critically examine whether the migration of these highly skilled individuals in India is unique to the country, or is a problem faced by every nation in its developing stage. To do that, let’s take a look at the case of brain drain in South Korea in the 1960s and how the government resolved it.


The Reverse Brain Drain of South Korea

When South Korea was a newly emerging economic power, there was a serious case of skill migration in the country. This was driven by doctors, engineers, scientists and aspiring professors migrating to the United States in search of better professional opportunities and money for their skills. South Korea had a very low bar for wages – the majority of the R&D staff in government institutions received less than $50 a month, which led these skilled workers to prefer to go abroad. Seeing this, the South Korean government initiated a concentrated policy framework that instigated the Reverse Brain Drain in the country wherein the state actively intervened into the lives of the South Korean diaspora and made serious efforts to repatriate them. This was done by specifically targeting the non-resident Koreans and developing programmes that were heavily skewed in their favor, sometimes even discriminating against the domestic population. Some of these policies were as follows:


  1. Repatriation of scientists and engineers into the industrial R&D programme (KIST): Korean Institute of Science and Technology (KIST), a multidisciplinary R&D institute for industrial technology, was created under the joint funding of the Korean and United States government. It started appealing to the patriotism and nationalism of its workers via its concentrated efforts to draw them back to Korea under different projects and directives. This led to the scientists settled abroad moving back home to help “develop” their fledgling country due to a newfound sense of nationalism. It was also helped by the fact that these repatriated scientists were given higher level posts and more autonomy over their research and the way they led their department.


  1. Increasing investment in private sector R&D: The Korean government made a concentrated effort to develop a unique brand that could not be replicated by the rest of the world. It did so by investing in risky endeavors that delved into research of newer and more efficient technology. The graph below shows the relative growth of research expenditure in South Korea with respect to the rest of the world.




The upward trend is indicative of why South Korea’s reverse brain drain was successful. Investment in these sectors also meant that these researchers had higher wages which acted as an incentive to innovate more in the domestic economy. Koreans settled abroad were motivated to come back via specifically designed projects that were now better paying and gave more autonomy to the researchers. For instance, a repatriated worker in KIST would earn $250-$400 per month– even if it was almost 75% less than what they would be paid in the US, they would be better off than their fellow less skilled Koreans. This granted them a higher social status that was lacking overseas.


  1. Sponsorship initiatives by private companies: The private sector companies in South Korea, which were heavily controlled by the government, offered sponsorship to the skilled non-residents for them to come back and work in their companies like LG and Korea Telecommunication. They mostly focused on temporary repatriation, but most of these scientists and engineers, at the end of their tenure, did not return to the foreign countries that they had initially settled in and sought to find a permanent job at home. This indicated the success of these state-led strategies that also provided subsidized housing, cheaper medical expenses and even automobiles.


The above interventions are a brief insight into the concentrated efforts of the South Korean government. It also helped that the government in the country at that time was heavily authoritarian. It had strict control over even private organizations, which allowed for the implementation of these programmes to be effective.


The Case of India and Its Inability to Imitate Precedent

It would be presumptuous to state that the reverse brain drain policies of South Korea can be exactly imitated in India in order to produce similar results. India is different in terms of diversity, culture and style of governance. Domestic citizens would not just sit back and watch if the government suddenly declared that its going to incentivize NRIs to come back home by giving them higher paying positions, subsidized houses and free healthcare.


One of the reasons why India is unable to retain these highly skilled students is because the opportunities provided at home are not good enough compared to abroad– why would an IIT graduate choose to work in a globally unknown startup in Bangalore if they were offered a job in Silicon Valley? The Indian mentality to be the best, and one-up their cousins/neighbors/friends, precedes any sense of nation-building, and attaining NRI status is the best way to do so. The reason why brain drain is specifically a problem in India is because the country goes to great lengths to highly subsidize university education. The below graph showcases government expenditure on education.- Despite being lower than that of high-income countries, it is indicative of why students go abroad in search of higher quality education.





Students attain this subsidized education, and choose to go abroad and contribute their home-attained skills to a country that has not invested in them at all. This essentially makes government expenditure on education to turn out to be a bad investment, because the best of its returns is being contributed to a developed country like the United States that is already miles ahead of India. This is proving to be a domestic problem as well, because now employers have to fix highly inflated salaries in order to retain the highly skilled, but these benefits are being reaped by the relatively less skilled population, despite their lower average productivity.


Globalization has blurred the boundaries between nations and appealing to the patriotism of NRIs may not be effective anymore. Additionally, the government does not seem willing to put a huge amount of money and effort on these bad Indians and openly discriminate in favor of the good ones who stayed at home, contrary to South Korea.


Policy Suggestions in Research- are they feasible?

The Bhagwati Tax proposal (Bhagwati and Dellalfar, 1973) was suggested in order to offset the repercussions of the brain drain for developing and industrialized countries- a tax policy that compensates developing countries for their loss of manpower, while discouraging further emigration of skilled labor by imposing a special income tax. In the late 1970s, researchers Bhagwati and Dellalfar calculated that a uniform tax rate of 10 percent on migrants from the 1960s would lead to a tax collection figure of over $62 million. When other countries in North America, Europe and East Asia were included, their yearly sum came out to over $150 million. An updated estimate today would probably yield over $1 billion. However, this is easier suggested in theory than implemented in practice– papers examining this proposal have shown that this would be successful only in retaining the lower- to intermediate-skilled workers while the best professionals continue to emigrate (Miyagawa, 1991).


Swades-ification of skilled Indian emigrants - why is it not working?

The 2004 hit film Swades brought the topic of repatriation to the forefront– Mohan, a successful scientist at NASA, comes back and decides to stay in India and work on developing his native village. This is a highly romanticized version of repatriation– reverse-brain drain policies can’t be made depending on the altruism of highly paid NRIs. Very rarely do Indians settled abroad return home- and in most cases, when they do, they are aged and most of their productive years have been spent abroad. A growing hostile political environment has also made some Indians averse to their own culture– minority communities seek to go out because they feel unsafe, and liberals want to go out because India is not woke enough for them. All of these factors combined makes the Indian work and study environment hostile and contributes to The Great Indian Brain Drain.



Conclusion


Maybe adaptation to this crisis is the way to go forward; The Indian diaspora has accumulated a lot of additional skills and adapted to the technological frontier much better than domestic citizens. If the government designs more comprehensive programmes that work towards collaboration between highly skilled Indians living abroad and the domestic citizens, there could be a formation of a potential brain bank (Agrawal, 2011) among the Indian diaspora. We also need to realize that in the current context of rapid globalization and interconnectivity, transnational living does not immediately mean betraying one’s country.


The tech sector is ever-growing, and incentivizing people to work in the research sector for newer and more efficient technology would not only increase India’s technological scope, but also be detrimental in creating our own local brand. Tech interfaces like UPI, IndiaStack, evolving e-commerce portals, and Jio are examples of brands unique to the country because they were started with low manufacturing costs and the product of Indian brains. Higher investment in Special Economic Zones that promote Multi National Companies to set up offices in India could attract the skilled labor and incentivize them to stay instead of moving abroad in search of the same job. Granted, the retaining of skills is extremely important to development via the generation of non-rivalrous ideas, it must also account for the changing geopolitical scenario, and developing countries like India should also keep the policy of adaptation handy.


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