If Brain Drain is Good why is Outsourcing Considered so Bad?

Shaunvir Mahil December 05, 2018

A high tech, innovative approach has been one of the most important contributing factors in making American economy the behemoth that it is today.

Technology and scientific innovations are in direct correlation with the well-being and robustness of any economy. However, companies can only innovate if they have access to high tech professionals and scientists. If a company does not have sufficient resource pool, innovation stagnates and it affects the overall prosperity of the nation. Surely, this fact is not in dispute or contention anywhere!

What happens if there is a local talent skill shortage? In such a scenario, sometimes countries like the USA are able to fall back onto skilled work visa programs. Such visas enable US and European corporations to plug local skill shortages and continue to dominate on a global scale. At present, immigration in the Western World, may be a topic of much heated debate and contention, however skilled migration, (traditionally at least), is/was met with a much more temperate and lukewarm response.

Why is this so? Why is there (generally) a significant contrast in attitude towards unskilled vs. skilled migration? Well, the answer is rather obvious! The influx of highly talented doctors, engineers, professors and scientists makes a positive contribution to an economy, (in the current political climate attitudes may have changed, but traditionally, skilled migration has always been viewed more favourably and is globally more appreciated than unskilled migration).

The famous scientist, Dr Michio Kaku had very articulately discussed this topic once. Dr Kaku went so far as to say that the reason the American scientific establishment has not collapsed, despite years of falling American education standards, is because of the H1B-Visa. Without the H1B-Visa, USA could “forget about Google and forget about Silicon Valley.” You can check out his video below for more on this topic:

Isn’t outsourcing just the reverse of brain drain?

If the benefits of brain drain are so apparent, (at least traditionally) why is outsourcing viewed so negatively? If the H1B-Visa benefits the economy by fulfilling our needs, (according to individuals like Dr Kaku and Bill Gates, US needs “more physicists and more engineers,” so that we can continue to create organizations like Microsoft and Google), then why do we not believe the same is true for outsourcing? If brain drain is regarded as a value addition which helps a local economy with a solution it was unable to create for itself, doesn’t outsourcing also achieve this same result?

Isn’t there a contradiction in our beliefs, attitudes and sentiments towards brain drain and outsourcing? If you are of the view that brain drain benefits the US by enabling us to leverage the brightest and the best talent in the world, surely the access to such quality talent through outsourcing cannot be denied and ignored?

Consider the following: A large US corporation sponsors a highly talented mechanical engineer to emigrate from India to the USA (due to difficulties they are facing in closing the position locally). Many would view such a migration as a positive step; as it results in significant ‘skilled knowledge wealth’ being added to the local economy. But if the same mechanical engineer works for the same US-based company remotely from India, then most would opine that this move has taken a job away from a US citizen and is adversely hurting the local economy. Whilst the benefits of brain drain is readily appreciated, it is harder for most to admit the competitive advantage outsourcing provides to the US economy.

If anything, outsourcing is even more beneficial to the US economy than brain drain. Generally, small businesses are the ones that bear the brunt of talent crunch and benefit the least from the skilled worker visa programs. In contrast, outsourcing is a solution for businesses of all sizes. Even small businesses can hire talented individuals that they could have never envisaged of bringing on board locally.

Viewing outsourcing through the lens of brain drain makes it easier for us to understand its potential and positive impact on economy. If you can appreciate the link between brain drain, innovation and local prosperity; then surely, the link between outsourcing and greater innovation should also be readily acknowledged?

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