Foundation for Effective Governance Ukraine, Kiev, 23-F Kudryavskaya Str., tel: +380 44 501 41 00, fax: + 380 44 501 41 05

feg@feg.org.ua www.feg.org.ua, www.debaty.org

Emigration of skilled labour is good for Ukraine's economy

A high quality labour force is a necessary condition for economic growth.

Therefore the flight of qualified labour abroad is traditionally considered to be a

big problem for developing countries as they lose talented people with key skills to

countries offering improved salaries and lifestyles. Yet, in the age of globalization

another approach concerning „brain drain‟ issue has emerged: emigration of skilled

labor can lead to substantial benefits to the original countries they have emigrated

from, such as Ukraine. Nowadays, countries can develop not only with the help of

the domestic human capital but by effectively managing their human resources

abroad as well.

“Brain drain” is

traditionally considered to be

a threat to a country‟s

economic development. Yet

potential benefits of

emigration are usually not

taken into account

So can Ukraine‟s economy benefit from the emigration of talent? Should the

country encourage emigration and focus on increasing the effectiveness of its

interaction with emigrants, or concentrate instead on keeping its talented workers

here in inside the country?

Arguments FOR the motion

Having left for a foreign country, highly qualified professionals will contribute to

the future influx of investments, technologies, ideas, and higher and more effective

standards of doing business in their homeland. The departure of talented people

abroad gives them a chance to find a better match for their abilities, to accumulate

financial resources and to establish business contacts they are unlikely to gain in

their own country. As a result, returning home later, they bring greater benefits to

Ukraine, and the country will have to spend much less on creating conditions for

talent development. Moreover, the temporary departure of students and scholars to

participate in research projects increases the skills of local scientists and helps to

integrate Ukraine into the world science and education community.

Having left the country,

talents can return with new

knowledge, skills and

resources

They also facilitate the promotion of domestic goods and services on the global

market. Having preserved their business contacts from home and gained access to

foreign markets resources, emigrants with their contacts and reputation serve as a

useful link between domestic producers and foreign consumers. For example,

Indians working in Silicon Valley contributed significantly to the infiltration of

Indian IT companies into the US market.

Emigrants promote national

goods and services on the

global market and showcase

their mother country

The opportunity to emigrate spurs the development of a local labor market.

Ukrainians are motivated to get an internationally competitive education so they

can find a job abroad. Not all of them will eventually leave their own country;

some will stay, adding to the number of highly qualified experts in the country‟s

economy and science departments. Furthermore, threatened by “brain drain” issue,

employers are pushed to constantly develop and improve working conditions to

attract and maintain personnel.

The opportunity to emigrate

encourages people to get a

better education and makes

national employers improve

their working conditions

Foundation for Effective Governance Ukraine, Kiev, 23-F Kudryavskaya Str., tel: +380 44 501 41 00, fax: + 380 44 501 41 05

feg@feg.org.ua www.feg.org.ua, www.debaty.org

Arguments AGAINST the motion

Emigration of highly qualified specialists depletes human capital. A vicious circle

is created, when each consequent generation has to learn from people with lower

and lower qualifications. As a result, the country‟s productivity falls and its

competitiveness in attraction of investments into high-tech industries decreases. In

this situation, the economy gets locked in low value added good production. If a

country loses a critical mass of highly educated and active population, it gets into a

spiral of degrading labor force and production, and will need much greater

resources to reverse the process and persuade talented people to return to their

country of origin.

„Brain drain‟ leads to

degradation of a country‟s

human capital and economic

potential

The deficit of skilled labor spurred by emigration increases hiring costs for

domestic companies, many of which experience difficulties in finding qualified

professionals and have themselves to attract people from abroad. It increases the

costs of goods and services, making them less competitive on the global market.

Moreover, the skill deficit in public administration lowers the effectiveness of

public service and hinders the process of reforms.

The deficit of personnel

increases costs and hampers

the process of economic

reforms

Countries spend a great deal of money on creating medical, educational and

scientific infrastructures to foster a high-quality national labor force. Ukraine

spends about one third of its budget on these kinds of social expenses. If highly

qualified specialists, who developed in the country with the help of state support,

leave for other countries, the country cannot capitalize on its investments, other

economies will enjoy the fruits of its labors.

The country fails to

capitalize on its investments

into human capital

The issue of the potential benefits for Ukraine from emigration of highly qualified personnel will be discussed

at a public debate hosted by the Foundation for Effective Governance in partnership with Britain-based

Intelligence Squared on September 22, 2011 in Kyiv, Ukraine.

_______________________________________________________________________________________

Some facts on professional migration

Foreign nationals are owners of the majority of patent applications in some of the largest US companies,

e.g. 64% at GE and 60% at Cisco (Global Talent Risk, WEF with BCG, 2011).

The global estimated remittance flows sent by migrants in 2010 reached $440bn, including $53bn to India

and $51bn to China (highest) as well as around $5 bn to Ukraine (Migration and Development Brief, World

Bank, 2011).

In the first half of the 2000s the number of Chinese student who left to study abroad remained high (over

100 ths a year) while only around 25% of those returned (by Sciencenet.cn, 2011). However, in 2009 the

number of overseas-returned Chinese exceeded 100 ths for the first time. Now about 81% of researchers in

the Chinese Academy of Sciences, 54% of the academicians in the Chinese Academy of Engineering and

72% of the chief scientists in 863 Chinese programs are professionals who studied abroad and returned

home (All-China Federation of Returned Overseas Chinese, 2010).

The number of specialists with scientific degrees who officially leaving Ukraine falls by approximately 1.5

every two years since the end of 1990 (The State Committee of Statistics, 2009).

Andre Geim and Konstantin Novoselov, who left USSR/Russia in 1990‟s, earned the Nobel Prize in

Physics in 2010.