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«Discussion Paper 77-2013 MIGRATION AND INNOVATION – A SURVEY Sheida Rashidi Andreas Pyka Universität Hohenheim | Forschungszentrum Innovation und ...»

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The present paper addresses the question of highly-skilled migration effects. The traditional approach to highly-skilled migration deals mainly with the loss to the emigration countries, namely the issue of brain drain. In this perspective, emigration of highly-skilled results in reduced economic growth for sending countries. However, other approaches are becoming more popular which are likely to be closer to the reality of knowledge-based economies of the 21st century. For example, return migration of highly-skilled emigrants compensates the outflows for sending countries. Although from a neo-classical economics point of view, return migration is the outcome of failed migration, the situation looks different from the angle of social network and transnationalism theory. Here, return migration gains an important role in transferring the local specific knowledge across borders. That is why origin countries potentially benefit from the skills that migrants have gained in the foreign countries. In recent studies the role of diaspora networks appears significant. Recognizing networks formed by immigrants, especially transnational networks in which they keep their ties to their homelands, triggers a shift from brain drain to a brain gain or brain circulation.

Transnational networks provide access to the knowledge and cultural specific know-how available at distant places, due to advances in communication and transportation technologies as well as changes in the competition pattern among countries. In this sense, both sending and receiving countries benefit from the mobility of highly-skilled labor.

Neo-Schumpeterian economics in an evolutionary economics flavor stress the importance of knowledge and innovation for economic development and therefore are the adequate approaches for the analysis of the relation between innovation and migration. In the knowledge based economy the main driver behind economic development is innovation, the more innovation, the more dynamic the economy will be. Heterogeneity in economic agents and interactions between them is the source of idea creation. The mobility of labor contributes to diffusion of tacit knowledge. Cultural diversity is the result of international migration; this constitutes the basic ground for knowledge spillovers. The diversity brought by immigrants in the total workforce has complementary effects to the native labor force.

Diversity is however accompanied with costs due to language barriers and cultural barriers.

The transfer of knowledge occurs in the networks and clusters which migrants form.

Network structures link the diverse knowledge of the agents and facilitate the exchange of knowledge. That is why it is essential to explore the networks and their roles. Finally, it is the design of the National System of Innovation which creates the prerequisites for innovation activities. The extent to which immigrants contribute to innovation depends on the interaction between them and institutions embedded in the National Innovation System.

Most results confirm that innovation is enhanced by the presence of highly-skilled migrants.

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