Rethinking Immigration in the Knowledge Economy

The United States is a unique country in many ways, notably in its collective, pervasive idea of the “immigrant” experience. As everyone learns in Civics class, the majority of Americans immigrated to the U.S. within a relatively compressed time frame in order to gain economic, religious or other freedoms that they did not have at “home.” Moreover, the land was new, with only emerging cultural ideas and structures to impose themselves on the new arrivals. The immigrant experience was pervasive because the number of immigrants compared to the number of U.S.-born citizens was high during the 18th and 19th centuries. The immigration experience was therefore formative in the U.S. culture itself.

Due to the fact that, by the numbers, most U.S. immigration took place during agrarian and industrial economies (see The 3.x Economies), immigration was also permanent for most people because the skills by which people gained their living were difficult to transfer elsewhere and, before the age of relatively cheap air travel, the transoceanic voyage itself was a barrier. New immigrants were relatively isolated from friends and family in their home countries, a fact that increased pressure to bring family over in many cases, which further added to the permanency of immigration. Although most immigrants held to some of their dearest traditions, they readily adapted to the U.S. culture (part of which was being an immigrant being accepted into the “New World”) and ended up losing their old traditions because these became decreasingly relevant to children born in the U.S.

The collective experience of rejecting the home country culture as relatively “backward” and irrelevant may cause today’s U.S. leaders to overlook the value of the home country to today’s “immigrants” (foreign talent).

It’s worth pointing out that many other countries have long histories with immigration because they have also offered religious and economic freedoms. What is different about the U.S. experience is that the relative portion of immigrants to the pre-existing population was extraordinarily high during the country’s formative history.

In the context of a global knowledge economy, some assumptions that underlie beliefs about immigration bear examination:

The relative freedom and wealth in the U.S. led people to immigrate and to remain, in what I’ll call the “classic” model of immigration. Because it emerged during agrarian and industrial economies, it is a “sticky” model because lack of mobility and barriers to exit are significant. However, there are some alternative models emerging:

• Learn and return—foreign talent, students and H-1B workers, attend university and gain practical experience in U.S. innovation-focused companies. They return to their home countries’ emerging economies. This is knowledge export; as all knowledge-based employers know, knowledge walks out the door with the employee.
• Learn and integrate—foreign talent, students and H-1B workers, attend university and gain practical experience in U.S. innovation-focused companies. They may stay in the U.S. but get involved in global ventures that may or may not involve their home countries. This is also a knowledge export, but chances are the U.S. retains some of the value, assuming that part of the venture is U.S.-owned and it has some operation in the U.S.

Policy makers, whether in government, labor relations, academe or business, should take note of the significance of the knowledge economy. As employers often become arrogant during a prolonged buyers’ market for labor, rich countries can do themselves a disservice by taking immigration for granted. The United States has a greater risk than many due to the deeply ingrained assumptions about immigration. The most innovative and motivated people in the world will seek opportunity wherever it exists, and that increasingly means anywhere. Intelligent leaders will make sure that they create—and retain—a critical mass of knowledge workers to keep their countries’ innovation engines humming.

For additional reading on the subject, see Devesh Kapur and John McHale’s new book, Give Us Your Best and Brightest,” as well as their recent Wall Street Journal article, Are We Losing the Global Race for Talent?