Movement of Global Talent

Shanghai:  Dr. Wang HuiYao. 

Today in flat world.  High time for this discussion.  If no people movement, no other movement.  Multinationals in China for past 28 years.  Foreign companies employ 45 million people in China.  contribute to 59% total foreign trade in China.  It's a 2-way street.  Would like to raise question:  what are policies we could generate to increase in study of global talent .... UN or World Bank doesn't have project for policy studies on global talent.

Delhi: Mark Dutz. 

Topic more prominent among many client countries of World Bank.  Draw attention to book:  Yevgeny Kuznyetov (sp?) on World Bank website has recently published book on the issue.  Have been requests from countries to specifically provide support in this area. 

Princeton:  Zweig:  what is role of government?  somewhat limited in China.  At macro level, in China, political stability has helped transition for people overseas who come back.  There are preferential policies for people who go back, but overall what brings them back is that the market is expanding.  (Chinese Academy of Sciences has incentive to come back, but quality is not of top caliber... maybe top 20% of people overseas.  post-docs, but not senior researchers).  China's job is to stablize market, make it more competitive, strengthen rule of law, make people feel that if they come back, will be working in stable, legalized market.  That will bring them back.

Kapur:  Key is to improve the supply of talent.  Indian govt has done a terrible job.  One of the main problems is that higher education is now one of the most politicized sectors in India.  Supreme Court, cabinet members, deeply involved in policy making in this sector.  India is one of most unequal countries in distribution of own capital.  That means get very strong re-distribution pressures.  If look at hundreds of colleges, quality of faculty is declining.  Anybody with talent does not want to join the public sector institution controlled by people who don't understand anything about higher education. 

Weakest link in India's innovation system is India's higher education sector.  Very politicized.  Very difficult to start a private university in India.  Last year indians spent one billion dollars in higher education outside india.  much more than is being spent in country.  Indian IITs educate 8,000 people out of one billion.  Not useful just to focus on that narrow issue to solve fundamental problem.

Q from Shanghai for Zweig:

US has benefitted from China.  Trade defecit due to many reasons.  e.g. Walmart has purchasing center in Shenzhen.  Manufacturing industries are highly polluting.  Seems China has lot of trade surplus, but in fact it is China consuming a lot of own natural resources to subsidize US consumption.  Apart from trade, US companies investing heavily in China.  e.g. Goldman Sachs.  Without help of Chinese returnees might be impossible for US company to acquire 10% in Shenzhen bank.  Another example:  JP Morgan purchasing real estate in China, impossible without diaspora.

VC of China Securities Corp, and fmr Chmn China Securities Regulatory Commission are American citizens.  Speaker is comptroller of publicly listed company in China.  Talk about impact on legal system in China.  Due to impact of american corporate law, Chinese corp regulators requiring Chinese companies have system of independent directors.  This is interesting legal impact.

 In addition, China is exporting people to US.  Seeing long queue in front of US consulate, of people seeking permanent visas to US. 

Returnees from US are working hard to promote trade and export.  But since haven't made any systematic study, just sharing personal observation.  As for returnees from Australia, Zweig feels australians contributing a lot, but personal observation is that it is not.

Zweig response:  of 100 returnees to China, if you look at people who returned fm US vs. those from other parts of world, people from US less likely to engage in trade and export than other parts of the world.  That's what data shows, and that's surprising.  I never said US hasn't benefitted from overseas Chinese experience.  I have been lax in considering role of overseas corporations.  Many people running those companies are returnees, and have terrific advantage because know local and global markets.

Have to respond to comment about Western companies being polluters in China.  Go to any small town and at night the air is thick as pea soup from coal smoke generated from plants.  It's a new line from Beijing and I think it's a ridiculous position.  A study of polluting firms in China, mostly from China, not overseas.  Living in Hong Kong, breathe pollutants from many factories owned by HK Chinese and Taiwan businesses and Chinese businesses. 

Multinationals have clearly benefitted from overseas Chinese experience.  But I'm also saying that there is a strategy among returnees.  There is a clear awareness that if you come out and get a good handle on foreign tech and bring it back to China, that is the path to weather in China now.  There are tech gaps in China's rapidly emerging economy, which are opportunities for returning Chinese.  My question is how does the US benefit from that? 

One last point.  Everybody is sending students overseas to study.  Chinese is perceived as best market for selling education.  100,000 students/year.  enormous hunger for quality education.  Other countries know that.  England has benefitted the most... sell one-year masters degrees.  Do one year, learn little, come back and can't get jobs.  sea turtles have become seaweed, is the saying in China.  A friend in the ministry of education asked Zweig to publicly criticize the British for this.  Now Brits letting students stay for 18 months to get more training. 

Delhi:  comment from Mark Dutz.  agree with comment that weakest link is education system.  intros prof. from assoc. of indian universities.

In India today, expansion of system in past 20 years.  Still because of social structure, education is considered to be a public good.  Covered by federal and state government.  Federally funded schools much better.  State-funded schools show a lot of variation from state to state, and funding is a major problem.  Interested primarily in Inst. of Tech and Sciences.  Not much progress in social sciences, language.

Privatization of colleges has not settled as system.  Priority goes to public institutions.  Private system needs more transparency.  Law says cannot make profit from education.

Linkage of school education.  Larger disparity between different sectors of society.  73% live in rural area, but quality of education is a problem.  Urban edu. system settled well, and partners are successful. 

Expansion of higher education.  There is pressure on govt to expand. Knowledge commission, interim report says 663 universities in India.  target is 1500 universities.  Should be done with public-private partnership, and 15 more national univerisities.  Partnership with overseas universities.  But need some regulatory mechanism for foreign institutes.  A sore issue is Indians getting degrees that are not recognized.  Can work in private sector but qualifications not recognized by public sector.

Kapur:  one of paradoxes of India is that public system is a failure, which drives people to spend on private eduation.  But private education not being developed.  If look at engineering 85% of all engineering colleges privately-run, but part of public universities.  But have to be affiliated with public university, in order to grant degree.  So get worst of all worlds.  Most private colleges are owned by politicians who do not want the entry of quality institutions, because it would drive their own schools out of the market.

What you teach, who you teach to, what you are paid are centrally controlled.  schools will not attract talent if people in the system are controlled to that extent.  I agree there are shoddy foreign partners.  Strange that India will not allow Harvard or Princeton to open up in India.  But will allow small British institution to set up.  Of course don't have quality education.  Tatas have built big institutions of higher education, but that is exception.  Big question is how do you attract talent, when salaries globally are so high. 

Another big problem is that while higher education is so politicized, this problem is neglected.  India is rare country where public teachers are paid more than private, but highest absentee rate of teachers.  State should improve quality of primary and secondary education. 

Q from Princeton:

Can say more about negative effects of absence of talent in India and China when people leave?  Study looking at stay rates of doctorates.  90% of Chinese are still in US.  What is impact of that on development of higher ed. institutions in India and China?  More specifically in India, medical brain drain, (in Africa, study shows brain drain is not hurting health care in Africa)... what is impact?

Zweig.  You're looking at people who got education in US and stayed, so loss is not so big.  It was a much bigger problem 10 years ago.  I remember going into a university in Wuhan.  20% of faculty had gone out to get PhDs and never returned.  Now there are people who will fill those roles.  There are lots of good returned academics who studied abroad and return to China.  Don't see leavers in universities being such a big deal. 

two strategies:  educate-migrate, or migrate-educate.

Person educated in China and moves to Canada, salaries are half of person who moves to Canada, gets education, and stays.

Majority of people trained in US are paid for by US.  Another benefit to China.  Even people who are sent by China get 33% of funding from US. 

Kapur:  If look at India's best place for science and research, almost 90% of faculty have PhD from outside.  Have been discussing with them key restraint on their operations.  It's not lack of funding... it's lack of graduate students.  Without that it is almost impossible to get substantial research grants.  If the country's best institution cannot get 200 grad students, that is extent of problem.  Best students get into Harvard, Stanford.  Researchers go into private sector.  Talent pool is not that substantial.  All IM's taken together have smaller intake than Harvard Business School. 

Shanghai:  Dr. Wang.

In future will be beneficial to both sides... China has more academics in US and sending more students in US.  In China only 5% of population have university education.  In 19th century, movement of poor immigrants.  in 20th century, had movement of labor force.  But think in 21st century it has to be movement of global talent.  Student exchanges.  See this as help for peace and prosperity in the world.  People to people contact. 

make recommendations:

1.  advanced countries like US should relax student visa. 

2. governments should help schools attract students from china and india.  a lot of students from abroad are cheated, end up in low-class schools.

3. should increase networking of talent movement.  for example, associations of returned scholars. 

4. world organizations such as UN, world bank should try to help global talent movement, not only with more education, but more exchange programs, conference, research on this topic.  this is trend of the future.  

Delhi:  Prof Dungunkar:  we don't have shortage of doctors in india, but unequal distribution.  last year study showed one doctor/700 people in urban areas.  national average is 1/3500.  problem is unequal distribution.  In urban areas, good infrastructure in private sector, but cost is not affordable to middle class.  Higher education, only professional, tech, and medical education is privatized.  When go to basic sciences, social sciences, languages, largely supported by government.  90% of students enrolled in basic sciences do 1- or 2-year schools.  Major attractions are health sciences and IT.  Ability of teachers is serious problem.  Professional teachers are paid less.  Disagree with Kapur statement that public teachers are paid 4x more than private is not true. 

Anoosh:  Change in scenario.  Very big companies... CEOs not interested in going to other countries.  Benefits to US:  indirect impact of RUS who go back to India.  They are creating the market that other companies are looking towards.  Study shows globalization has increased informalization, pushing people from regulated to unregulated market.  MNC not filling gap.  Do not provide social security.  When MNC come to developing country with poverty, it is important to have proper equity.  Globalization should be thought of in terms of regulation that is global responsiveness in a more formal manner.