Do Migrants Spur Innovation?

Executive Summary

Do migrants contribute to innovation in the European Union (EU)? MPC’s recent report[1] attempts to answer this critical question. To measure innovation, our research focuses on migrants’ contribution to patents registered at the European Patent Office. The preliminary results point towards a positive role played by migrants in promoting innovation.

What is innovation and why is it important for the EU?

According to the European Commission, innovation is defined as “the successful production, assimilation and exploitation of novelty in the economic and social spheres.”[2] Its importance is underlined in the European Council’s Lisbon Strategy[3] which highlights that innovation is important for promoting economic growth, an argument which is supported by the Europe 2020[4], the EU’s growth strategy. Moreover, EU’s Global Approach to Migration and Mobility[5] (GAMM), through the ‘EU Blue Card’ Directive[6], provides one of the key policy tools to promote the migration of highly skilled workers in to the EU.

Innovation: How to measure it?

The recognition that innovation and technical change are amongst the key components of economic growth has pushed economists to look for appropriate indicators. However, measuring innovation is a difficult task since it is a multi-faceted phenomenon. One of the most popular indicators of innovation is the number of patent applications at industry or country level[7] (e.g. Furman et al. 2002). For the purpose of the study, we attempt to assess migrants’ contribution to theincrease in patents registered at the European Patent Office.

Why are patents important in measuring innovation? Patent data are considered an important indicator of innovative activity as they reflect the technological effort of companies and non-firm organizations aiming to create new products and processes. In research, patents are used to approximate the innovative capacity of countries. Contrary to previous analyses which used a territorial cross section approach and a diversity index, we analyse the innovative capacity at sectoral[8] level and explore how it is affected by the characteristics of human resources and their demographic trends.

The three case countries chosen for the analysis are UK, France and Germany. Though all three are counted amongst the top three economies in Europe, however, they differ in three key categories. Firstly, they differ in their age pyramid, as seen in the case of France, where the young-age population (below 15 years) is 1.35 times the old-age population (above 65 years), while in Germany and the UK the young-age population is smaller than the old-age population (0.85 times and 0.89 times respectively). Secondly, these countries also differ in their dominant production sector. In the UK, the service sector dominates the economy (75% of added value); while in Germany the manufacturing sector has 29.3% of added value. However, in the diverse economy existing in France, it is interesting to note that the agriculture sector still contributes up to 2.8% of added value. Finally, in terms of immigration, all the three countries have a long history of immigration and migrants make up between 11% and 8% of the population. However, they have different migration policies: the UK encourages immigration of the highly skilled labour, while both France and Germany have a tradition of allowing low to medium-skilled migrants and family reunifications.

Our analysis includes four variables: age, level of education, type of occupation, and the distinction between migrants and natives.  The three figures below show different national composition and trends of the patents and migrant shares by education and age.

 

Graph 1. UK: Migrant Share and Patent trends

Source: MPC’s Research Report 2012/11 ‘Are migrants spurring innovation?’ by Alessandra Venturini, Fabio Montobbio and Claudio Fassio

 

 

 

 

 

 

 

 

 

 

 

Source: MPC’s Research Report 2012/11 ‘Are migrants spurring innovation?’ by Alessandra Venturini, Fabio Montobbio and Claudio Fassio

 

Germany: Migrant Share and Patent trends

 

 

 

 

 

 

 

 

 

 

 

Source: MPC’s Research Report 2012/11 ‘Are migrants spurring innovation?’ by Alessandra Venturini, Fabio Montobbio and Claudio Fassio

 

Graph 3. France: Migrant Share and Patent trends

 

 

 

 

 

 

 

 

 

 

 

 

Source: MPC’s Research Report 2012/11 ‘Are migrants spurring innovation?’ by Alessandra Venturini, Fabio Montobbio and Claudio Fassio

 

Findings

The preliminary results of the research[9] suggest a positive correlation of highly skilled migrants and innovation, i.e., highly skilled migrants tend to favour innovation as revealed by an increase in the number of patents. However, the impact of the highly-skilled on one side, and the low-skilled on the other side, varies between migrants and natives. Also, the age composition of the labour pool plays a different role. The results indicate that both the young and old workers are spurring innovation but the results are not homogeneous and differ according to the country specificity.

In the UK, innovation is generated mostly by highly-skilled migrants who are in a more advanced phase of their working life. However, highly-skilled young[10] migrants and low-skilled older natives also contribute to innovation.

In France, innovation is stimulated by both highly-skilled natives and low-skilled migrants; it is especially promoted by the young population in both categories. However, older migrants also contribute to innovation.

Finally, in Germany, both the highly-skilled and low-skilled migrants (especially those who are older) play a positive role in innovation along with low-skilled natives. Furthermore, data suggests that natives favour innovation when they are young.

Please note that the results presented are preliminary as the positive impact of highly-skilled workers, both native and foreign, is limited inside specific sectors. Thus, the result underestimates the total positive effect of human capital changes as the complementarity between sectors and the positive spill over are not taken into account.

Key observations

  • Highly educated migrants, in general, play a positive role in promoting innovation
  • The specific field and quality of education of migrants are fundamental in determining the specific productivity of the migrant worker
  • In high technology sectors, highly-skilled foreign workers contribute positively to innovation without crowding out natives
  • Low-skilled migrants may indirectly contribute to innovation by complementing the work of highly skilled workers

 

The MPC Team

 

Note: The above commentary is a summary of MPC’s Research Report 2012/11 ‘Are migrants spurring innovation?’ by Alessandra Venturini, Fabio Montobbio and Claudio Fassio. To read the complete report, please visit: http://www.migrationpolicycentre.eu/docs/MPC%202012%20EN%2011.pdf


[1] To read the complete MPC report ‘Are migrants spurring innovation?’ by Alessandra Venturini,  Fabio Montobbio and Claudio Fassio, visit:

 http://www.migrationpolicycentre.eu/docs/MPC%202012%20EN%2011.pdf

[2] http://europa.eu/legislation_summaries/other/n26021_en.htm

[3] http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/00100-r1.en0.htm

[4] http://ec.europa.eu/europe2020/index_en.htm

[5] http://ec.europa.eu/anti-trafficking/entity.action?id=5e75898d-e508-4f32-b6c4-13f495d6e879

[6]http://europa.eu/legislation_summaries/internal_market/living_and_working_in_the_internal_market/l14573_en.htm

[7] Furman J., Porter M.E., Stern S., 2002, The determinants of national innovative capacity, Research Policy 31, 899–933

[8] The effect of immigration (of skilled and unskilled migrants) on innovation is measured at the sectoral level, in three EU member states (UK, Germany and France) in the period 1994-2007. Sectors are defined at the two digit level of NACE classification.

[9] The results of the research are preliminary using a production function of the innovation in the manufacturing sectors (measured by patents registered in each country-sector explained by openness to trade, physical capital, expenditure in research and development, the previous stock of patents, and human resources).

[10] For the purpose of this research, in Germany ‘young’ is defined as those who are under the age of 40; while in UK and France, it is defined as someone who is under the age of 35.

Advertisements

India´s Engagement with its Diaspora in Comparative Perspective with China

Executive Summary

India and China boast two of the largest and most extensive diasporas in the world, both having a long history of settlement and contribution abroad. MPC’s latest research report “India´s Engagement with its Diaspora in Comparative Perspective with China” discusses the history and main characteristics of the diaspora policies of the two countries.  Moreover, the report highlights new forms of citizenship such as “emotional citizenship” and “flexible citizenship” which are increasingly emerging as a result of transnational migration. The report concludes with policy recommendations for the Indian government in the field of diaspora relations.

India’s diaspora policy

In 2001, the High Level Committee on the Indian diaspora established by the Indian government estimated the global Indian diaspora at 20 million people (representing 1.9% of the total Indian population). In India, the Ministry of Overseas Indian Affairs (MOIA) has a number of special programmes for overseas Indians. Two successful examples are – the PIO or Person of Indian Origin Card (introduced in 2002) and the Overseas Citizenship of India (OCI) card introduced in 2006. The PIO card grants visa free travel to India for a period of 15 years and cardholders are exempt from registering with the police if their stay does not exceed 180 days. The card is designed for foreign passport holders of Indian origin up to the fourth generation settled throughout the world except for Afghanistan, Bangladesh, Bhutan, China, Nepal, Pakistan or Sri Lanka. Although similar to the PIO card, the OCI card gives visa free, multiple entry and multi-purpose travel for life, as well as permanently exempts its owners from ever having to register with the police. Its eligibility criteria is slightly more restrictive, being aimed at foreign passport holders of Indian origin (except Pakistan and Bangladesh) up to the third rather than fourth generation. It has been a great success, as measured from the latest MOIA annual report which reports that a total of 1,029,131 individuals of Indian origin have successfully applied for OCI status as of Feb 14 2012.

In addition, the MOIA also initiated the ´Know India´ (launched in 2004) and ´Study India´ (introduced in 2012) schemes. These are aimed at youth aged 18-26 years, who are selected by Indian missions abroad to participate in three or four week long study sessions in order to get to know their Indian roots and become acquainted with contemporary Indian society.

China´s diaspora policy

Compared to India, China has developed a more extensive diaspora engagement policy and institutional apparatus. The Global Commission on International Migration in 2005 estimated the worldwide Chinese diaspora at between 30-40 million people (representing 2.9% of the total Chinese population). [1] The government has made a concerted attempt to embrace all ethnic Chinese, regardless of nationality or date of migration, as part of the Chinese family and hence inextricably tied to the Chinese nation. Its discourse, like that of India’s, stresses the importance of ethnic identity and pride in one’s heritage.

The aims of the Chinese and Indian governments are thus similar: both have sought to expand and de-territorialise the concept of “Chinese” or “Indian” in an attempt to promote their economic and social development.

However, the focus of their diaspora policies has differed. China’s “Roots Seeking” programmes for overseas youth promotes Chinese language and culture abroad but China has not introduced special visa-free administrative schemes for the overseas Chinese. On the contrary, China has over the last two decades aggressively courted the return of its highly-skilled diaspora through a variety of employment and scholarship programmes.

One example is China´s flagship programme for attracting overseas talent – known as “1000 Talents”. This programme offers high-level academic positions to senior Chinese scholars with PhDs (earned overseas at salaries) up to 20 times higher than what local faculty make. In large cities such as Shanghai and Beijing, annual salaries reach 1, 000, 000 RMB or 121, 000 Euros annually (in comparison with around 200, 000 RMB or 24 000 Euros for locals), enhanced by a one-time relocation payment of 1, 000, 000 RMB, generous research funding, a living allowance, social security benefits and access to prestigious university-affiliated primary/secondary schools for their children. Thus far, 2263 Chinese scientists and other academics have returned under this programme, although not without provoking local resentment at their much superior living and working conditions.

A second strand of the 1000 Talents programme seeks to draw innovators (for example patent holders) in specialist engineering and high technology sectors who will create companies or jobs in China. Their salaries are even higher, at 3, 000, 000 RMB per year (363 330 Euros). More than 2100 academics and high achieving innovators have returned to China thanks to the 1000 Talents programme, exceeding the original target of 2000 individuals.

Lessons for India?

China can claim success in attracting a significant number of “sea turtles” as returnees are known, back to Chinese universities and research parks, and has also been very successful in attracting ethnic Chinese Foreign Direct Investment (FDI). Although FDI figures from the Indian diaspora have been disappointing, India is the leading recipient of remittances worldwide, and its “Person of Indian Origin” and “Overseas Citizen of India” schemes have enjoyed great popularity among the Indian diaspora.

In order to strengthen diaspora investment and return, India can consider opening up public sector employment to Persons of Indian Origin, approve the Innovation Universities Bill which will allow the creation of private “PIO/NRI” universities in India, and accelerate the process of merging the PIO and OCI schemes into one universal and streamlined card for all persons of Indian origin. Finally, on the global stage, the Indian Council for Cultural Relations, which runs Indian Cultural Centres abroad, would do well to expand their number and global reach (particularly in North/South America and in continental Europe). Being visible culturally and linguistically on the global stage is vital for promoting India´s ´soft power´ and can potentially reach a much greater number of PIO youth than the current small numbers participating in its “Know India” programmes. Finally, India could do more to expand the efforts of the Overseas Indian Facilitation Centre, creating a sub-national network of such centres. Currently some Indian states are relatively deficient in diaspora engagement whereas others, such as Kerala, have developed an extensive diasporic infrastructure of their own. Regional Overseas Indian Facilitation Centres could launch internship programmes in priority areas and business start-up schemes that encourage talented young PIO youth living abroad to bring knowledge and business creation to India.

Conclusion

While India and China initially neglected their respective diasporas, their policy of indifference changed when they embarked upon economic reform. Although neither country accepts dual nationality, both have now recognised the great economic and social value of their diasporas and the potential contribution to the “homeland” that they can make from abroad. China and India have created an increasingly extensive diasporic infrastructure (such as dedicated diaspora ministries), combined with policies designed to attract investment as well as emotionally bind the diaspora to the “motherland”. While China has aggressively courted its highly skilled scientific diaspora, offering highly competitive salaries and working conditions to returnees, India has pursued a policy of offering a range of benefits (such as visa-free travel) to its diaspora, and creating two main categories of overseas Indians.

Overall, the diaspora policies of India and China demonstrate that:

1)      Although the absolute numbers of their knowledge diasporas may be small in relation to the overall size of the diaspora, their contribution to the domestic economy can be highly disproportionate; and,

2)       In order to attenuate the effects of the brain drain, it is possible for origin countries to promote diaspora engagement employing a variety of modes of ´flexible´ citizenship that allows their global diasporas to contribute without being residents.

Please Note: This is a summary of the MPC Report titled India´s Engagement with its Diaspora in Comparative Perspective with China.

Kathryn Lum, Research Assistant to CARIM-India

The views expressed by the authors are not necessarily the views of the Migration Policy Centre.


[1] These figures include several generations of migrants and their descendants and are not the result of an official census.


Readmission Policy: where is the carrot though?

The proclaimed new EU Global Approach to Migration and Mobility (GAMM) presents important contradictions: while it seeks to facilitate and organise the legal mobility of Third Country Nationals and to ensure that TCNs in need of international protection, receive it, it also aims at strong border controls and particularly emphasises readmission policies.  In this short piece we look at past experience on readmission cooperation with Albania and at the current readmission ‘hot potato’ notably cooperation with Turkey.

The readmission of irregular migrants and refugees who entered the EU territory constitutes one of the biggest challenges that EU neighbouring countries are confronted with. There are cases of third countries who have been re-admitting large numbers of irregular migrants (including own nationals) and potential asylum seekers. For instance, the visa liberalization between the EU and Albania, which has been in force since January 2011, has been a ‘reward’ for, among other things, a good record of readmissions of its own nationals from Greece over the years. This is an example of how collaboration works even though considerable policy gaps in the re-integration of readmitted Albanians are identified, e.g. there is hardly any assistance for them to find a job and/or reintegrate in their communities of origin, so that they would not try to cross the border illegally again.

There are, however, also third countries whose readmission record is rather problematic. A case in point is Turkey and its failure to implement the Re-admission Protocol that it has signed nearly a decade ago with Greece. During the period 2006-2010, Greece had filed 3,431 readmission requests to Turkey, in the context of this Protocol, concerning 62,816 people. Of those 7,359 were accepted for readmissions by Turkish authorities, but only 1,281 were effectively re-admitted to Turkey.

It is our contention that a successful readmission policy has to look closer into the political economies of the third country in question, notably Turkey, in order to understand its capacity and eagerness or reluctance to implement the Readmission Protocol and to tackle irregular migration flows with a view of arguing convincingly about the visa facilitation or visa exemption altogether.

The visa liberalization between the EU and Albania, which has been in force since January 2011, mainly offers Albanians the opportunity to seek short-term and seasonal informal work in Greece (Maroukis and Gemi 2011). Indeed such a strategy fits well with the political economy of Albania. Offering its citizens the opportunity to travel legally and work informally in neighbouring Greece eases the pressure from rising unemployment, a welfare regime under pressure and an economy that lacks basic infrastructure for achieving better distributional effects from the insertion of FDI over the last decade in the country.

The case of Turkey is not so straightforward. Commenting on the recent initiative by the Austrian government to discard the requirement of competence in German for Turkish citizens when applying for a residence permit for the purposes of family unification, the Turkish Minister of European Union Affairs Egemen Bağış characteristically stated “they [EU member states] are welcome to go ahead if they plan to carry out some sort of facilitation of the visa process. But what Turkey deserves is a visa exemption[1].

Although the external anchor of EU membership has functioned during most of the 2000s as a powerful incentive for Turkey to proceed with substantial political and economic reforms (Öniş 2012), Turkey’s economic growth record so far has given ground to the ‘’apparently paradoxical conclusion that whether Turkey becomes a member or not will not have such a dramatic impact on the quality of its economic performance and the nature of its democratic regime’’ (Öniş & Bakır 2007: 161-2). However, a key variable behind Turkey’s economic and political (in)stability in the coming years is the way Turkey addresses its developmental and re-distributional challenges.

The highly fragmented and hierarchical corporatist social security system in Turkey providing health and pension benefits only to formally employed individuals coexists with a labour market structure where self-employment, unpaid family labour and informal employment practices are very important (Buğra and Keyder 2006). Part of Turkey’s informal economic activities is migrant smuggling. Significant marginalised segments of Turkish society and marginalised regions (especially in the South-East) have been earning a living from this illegal activity (Triandafyllidou and Maroukis 2012, Danis 2006, Icduygu 2004), alleviating thus the pressure from the re-distributional inequalities (often tinted with political colours, e.g. the Kurdish issue) that the Turkish political economy faces.

For Turkey to engage into an effective readmission policy and for an effective dismantling of irregular migration networks, the EU needs to achieve better knowledge and understanding of how these are intertwined in Turkey’s socio-economic structure. What works with Albania as a visa regime might not work for Turkey. The incentives for Turkey may be different also because the bulk of third country nationals that it would have to re-admit are not its own nationals.  Hence, the carrot that the EU has to offer is a wider regime of visa exemption, plus human resources and technical know-how assistance that would help Turkey build a more effective border management system at the Turkish eastern borders. Such a ‘carrot’ would make the ‘stick’ (notably readmissions and the dismantling of the migrant smuggling networks) worth it and would provide a more durable answer to the challenge of irregular migration flows from Asia to Europe via Turkey and Greece. 

For more information, read: Triandafyllidou, Anna and Maroukis, Thanos (2012) Migrant Smuggling. Irregular migration from Asia and Africa to Europe, London: Palgrave, http://www.palgrave.com/products/title.aspx?pid=494431

Thanos Maroukis, Marie Curie Research Fellow, Bath University

Anna Triandafyllidou, Professor, Robert Schuman Centre for Advanced Studies, European University Institute

The views expressed by the authors are not necessarily the views of the Migration Policy Centre.


[1] http://www.todayszaman.com/newsDetail_getNewsById.action?newsId=278495