Skilled immigrants boost innovation, hindered by flawed systems

Donald Trump once remarked, “You graduate from a college, I think you should get, automatically as part of your diploma, a green card [permanent residence in the United States].” Despite his track record suggesting otherwise, his statement implies that even nativist politicians see the value in highly skilled immigrants. These individuals bring diverse experiences, knowledge, and contacts, thereby enhancing the productivity of local workers.

A Harvard study highlighted this by examining the impact of a colleague’s death on researchers’ productivity. The loss of an immigrant colleague reduced productivity nearly twice as much as losing a native one. This study estimated that immigrants, comprising 14% of the US population, contribute to 36% of the country’s innovation. As global capital flows stagnate, the movement of skilled individuals across borders becomes crucial for spreading new ideas.

Rich countries often hesitate to admit more labourers or asylum-seekers but claim to seek top talent in strategic fields like AI or medicine. Nations like America, China, and many in Europe assert their eagerness to welcome such talent. Monaco even has an “attractiveness secretary” to attract high-flying entrepreneurs. However, other priorities can interfere. China’s security concerns make life difficult for foreigners, with police surveillance and warnings to local partners about espionage. In Britain, the push to reduce overall migration led the Labour government to encourage tech firms to hire fewer foreign engineers, mistakenly believing this would create more jobs for natives. America, despite having a highly attractive labour market, suffers from a dysfunctional immigrants system.

When a company files for an H-1B visa for a highly skilled worker, there’s a 75% chance of rejection, often after a year-long process—an eternity in the tech industry. If the worker seeks permanent residence, especially from a populous country like India, the wait can be as long as 134 years due to a cap that limits any one country to 7% of work-based green cards annually. Consequently, many give up and move elsewhere. While 73% of foreign graduates from American universities express a desire to stay, only 41% manage to do so. This blockage has contributed to American universities losing market share to Australian and Canadian institutions over the past two decades.

Dubai presents a stark contrast, with a streamlined immigration system enabling work visas within a week for anyone earning above a certain threshold. Settling in is straightforward, with a fully digitised process for obtaining a driving licence and opening a bank account. This system has transformed Dubai from a little-known port into a global business hub in just a generation.

While democracies can’t adopt Dubai’s methods wholesale, they can make their immigration systems more efficient. Portugal has shown this by becoming an attractive destination for digital nomads in a decade. A smart system for attracting talent should focus on removing obstacles rather than offering specific inducements. Admission criteria should be simple and objective, such as accepting anyone who earns above a certain amount or graduates from a reputable university. Some safeguards are necessary to prevent fraud, but objective measures are faster and fairer than bureaucratic discretion.

The downsides of attracting more talent are manageable. If housing prices rise, increase house-building. Concerns about brain drain from poorer countries are more nuanced. When scientists move to better labs, they innovate more, benefiting humanity. Migrants from poorer nations often earn more and send money home, funding relatives’ education. Studies suggest that developing countries benefit from a brain drain of up to 10% of their graduates, meaning countries like India and China could afford to lose more talent.

Ultimately, it is not altruism but incompetence that prevents rich countries from effectively attracting skilled immigrants. Nations that fail to improve their immigration systems will miss opportunities to enhance knowledge and prosperity.