Columbia Business School

Reversing the Brain Drain

Presented by Columbia Business School

businessman jet setting

To an outside observer, highly skilled workers and entrepreneurs who globetrot between the United States and their home countries may appear enviable.

“Why wouldn’t someone who can straddle two cultures, who is familiar with both the local context of his home country but also brings new skills, resources, and networks acquired abroad be better off than his peers?” asks Professor Dan Wang, whose research in management and sociology focuses on social networks, international migration, and globalization, especially as they apply to venture capital, private equity, and entrepreneurship in emerging markets.

Wang viewed returnees as potentially powerful brokers of knowledge and innovation, able to move amphibiously between nations and firms. Yet, while interviewing Chinese returnee entrepreneurs for one of his research projects, Wang began to hear a common refrain. “Instead of being welcomed back home after working in the United States, Chinese returnees reported experiencing dual discrimination; they were seen as unfamiliar and even foreign while at the same time they were viewed as turncoats. Many returnees, initially attracted by economic opportunities back home, told me, ‘If I could, I would have stayed in the United States.’”

This is not merely a question of individuals’ career satisfaction. The US Department of State’s mandates for short-term visas explicitly codify knowledge transfer as one rationale for extending work visas to foreign nationals. But many countries have lamented the stilting effects of so-called brain drain on their own economies and development when talent is lured to the United States. For developing nations in particular, knowing the barriers and facilitators of knowledge sharing could help them make the most of returnees’ work abroad.

Research about knowledge transfer across organizations and countries has usually focused on technology — for instance, whether software techniques and patent technology are widely cited or licensed across nations and firms. “That focus overlooks the critical role of individuals in spreading ideas,” Wang says. “Individuals in organizations, not the organizations themselves, spread ideas, techniques, and methods across borders.” Rather than exclusively studying the firms for which returnees work to assess how management practices, techniques, and technical knowledge spread, Wang looked at the experiences of individual returnees who had worked in the United States and subsequently returned to their home countries. With a series of extensive interviews and survey responses from among more than 4,100 returnees from over 90 countries, he constructed a picture of just how much — and how easily — returnees are able to share knowledge when they return home. In particular, Wang wanted to understand which country-level, cultural, and organizational influences actually lead to ideas being picked up — or left behind. What he found often surprised him.

Organizations with only a single returnee were much more likely to adopt knowledge from her than organizations with multiple returnees. Why would this be the case? “Let’s say that you are at a party where you are the only person from IBM. You can say whatever you want about IBM, because you’re the expert,” Wang explains. “But if there’s another person from IBM there, you might actually watch what you say a little bit. This kind of interpersonal process appears to put a big damper on knowledge transfer.”

At the country-level, Wang found that workers with stronger ties to the United States fared worse if they returned to a xenophobic home country, as measured using the World Values Survey’s questions on attitudes toward foreigners. In order to overcome their home country’s cultural distrust of foreigners, returnees need to maintain exceptionally strong local ties, which are easily lost working an ocean away.

female manager checks in with her team at the computerLess surprisingly, cultures that are open and organizations that have systems in place to help returnees reintegrate do well. “Some companies understand this,” Wang says. “They send managers abroad but have programs to speed up their reintegration on their return home, even helping families do the same. And there’s research showing that training prior to going abroad can help prepare people for reverse culture shock.”

In his many interviews with returnees, Wang found that many did not go abroad with the expectation of returning home to cross-pollinate organizational knowledge. The most common scenario was entirely different: a new returnee would see an inconsistency with how they had worked in the United States and suggest an adaptation based on their US experience. For example, large US software firms have systemized ways of reviewing code that are consistent across firms, but in some nations, firms are reluctant to add a quality control layer that might slow the production cycle. When software engineers return to their home countries and find no systematic practices in place, their knowledge might come into play. “Knowledge transfer is not like a fire hose,” Wang emphasizes. “You don’t absorb everything, go home, and turn a spigot to spout everything you’ve learned. It’s fairly strategic and selective.”

Somewhat surprisingly, Wang found that those returnees who were most successful at transferring knowledge were also the most likely to report that they wanted to come back to the United States long-term. “They are great at transferring knowledge, but their network in the United States is very dense and rich — the same thing that provides them with a path to success in their home countries also pulls them back to the United States,” he says.

Wang found that many developing countries were among the least friendly and successful at welcoming returnees back. Brazil, China, and Russia, for example, while quickly developing infrastructure to support international business, have not yet developed a global perspective that would be more welcoming to returnee knowledge. In contrast, European nations tend to benefit from returnee knowledge transfer because Europe is culturally and institutionally more similar to the United States.

group of colleagues strollingWhile, as noted above, knowledge transfer is less likely to happen when a firm employs more than one returnee, those with explicit international links, such as subsidiaries of multinational corporations, do better at capturing knowledge transfer. Programs that send employees abroad with the intention of having them come back work well because the firm creates an explicit expectation that the individual will share knowledge gained. “For the same reason, it’s important for firms to form partnerships across country borders,” Wang says. “Those types of firm-to-firm partnerships can also boost a skilled immigrant’s commitment to the organization across country borders.”

But most people who go abroad to work are free agents, left to reintegrate back into their home countries on their own. That underscores the need for organizations and countries to support an increasingly mobile workforce, Wang says. “The trick is to retain knowledge while making sure people remain mobile. That probably means building organizational links.” And, it is especially important for managers to understand the barriers for returnees, Wang says. “Without institutional support or support from an authority figure, it’s difficult to introduce and implement new ideas.”

Read the original piece on Columbia Business School’s Ideas and Insights blog. 

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