Diasporas and Technology Transfer

Nearly two decades ago, an important concern of development thinking and international public policy centered on the movement of individuals with high human capital from low income countries to higher income countries — a phenomenon know as ‘reverse technology transfer’ or the ‘brain drain’. Subsequently the issue dropped out of sight, edged out by the immediacy of the problems confronting developing countries in the 1980s and new concerns, ideas and fashions. Indeed, by the mid-1990s, despite continued concerns about human capital ight (especially from Africa, Russia, the Caucasus, and the Balkans), the expression ‘brain drain’ was less in vogue, and while not replaced was certainly challenged by concepts that implied a reversal of ‘reverse technology transfer’ — ‘brain gain’, ‘brain bank’, ‘brain trust’. Understanding this shift has assumed much greater urgency given the structural shifts that are underway in the global economy. If capital was the central mobile factor driving economic development in the past half-century, then international labor mobility is likely to play as central a role in the next half-century. The growing importance of international migration (both real and virtual) will be driven by structural factors, both demographic and technological, in both developing and developed countries. Present demographic tendencies will produce a major shift in the size and structure of populations in the European Union (EU) over the next 50 years. The population of current EU member states is expected to decline by about 12% by 2050, which is likely to have strong negative effects on living standards and government budgets. OECD estimates suggest that the cumulative effects of demographic changes in industrialized countries could be to reduce living standards in the US, EU and Japan by 10, 18 and 23%, respectively (OECD, 2000, p. 197). Without an inux of new workers, European pension systems will become unsustainable. A growing body of opinion holds that aging European populations might be rejuvenated by inows of migrants who would work, pay taxes and hence Žnance pensions, helping to avert a future pensions crunch (OECD, 1998; United Nations, 2000). A United Nations report calculated that in the case of the EU, in the absence of any other measures or changes, the net number