FROM BRAIN DRAIN TO BRAIN GAIN: HOW INTELLECTUAL PROPERTY RIGHTS
CAN HELP DEVELOPING COUNTRIES BENEFIT FROM SKILLED EMIGRATION
Stronger intellectual property rights can help developing economies benefit from having
many of their brightest people living outside the country – the so-called ‘brain drain’ that
until recently was considered a curse for developing countries. That is the central
finding of research by Alireza Naghavi and Chiara Strozzi, to be presented at the
Royal Economic Society’s 2012 annual conference.
Looking at the protection of patents, trademarks and brands in 35 emerging and
developing countries over a 10-year period, the research argues that by protecting
intellectual property rights in developing countries, wealthy ex-patriots will be tempted
to invest in setting up new businesses importing the technologies available in their host
countries.
The emigration of skilled people out of a developing country is often seen as a
downside of globalisation, starving these countries of their best and brightest who
would otherwise contribute to the country’s development. But with the increased use of
the internet and other means of communication, these diasporas are more able to keep
in touch with their families and provide large inflows of cash to these economies.
The authors argue:
‘Protection of intellectual property rights increases returns to skills, expands
innovation in the home country and makes it more likely for some raw human
capital to remain at home.
‘This increases the fraction of the population who can gain from skills acquired
abroad and sent back by emigrants. The result is net brain gain.’
More…
Skilled emigration from a developing country is often blamed as the cause of the wellknown phenomenon of brain drain. Protecting intellectual property rights in the origin
countries is a way to reverse this result.
On 19 November 2011, the Economist asserted that ‘the magic of Diasporas’ can be
beneficial to sending countries. There is little doubt in today’s role of emigration in
creating potential gains to the home country through diaspora networks. But can
political instruments such as intellectual property rights protection be used to transform
brain drain into brain gain?
The answer provided by this study is yes. The study reveals for the first time a
relationship between emigration and intellectual property rights protection in
determining the evolution of skills and innovation in the sending country.
Even if brain drain is not a myth, when a developing country commits to a tough
intellectual property rights protection regime, the benefits of the knowledge that flows
back to the home country falls on a wider range of workers, who are active in a larger
innovation sector. A sufficiently strong intellectual property rights regime therefore
reverses the effect of brain drain.
The positive impacts of diaspora networks have been associated with informal trust
through kinship, speeding the flow of information and the return of better-trained and
more experienced migrants back to their home countries. The growth of the internet
and telecommunications has also facilitated cross-border scientific collaborations and
the flow of knowledge. Indian computer scientists in Bangalore, for example, constantly
share ideas with their counterparts in Silicon Valley.
What these researchers argue is that capacity building through favourable institutional
frameworks is a necessary step for developing countries to exploit the fruit of diasporas.
The study of emigration and intellectual property rights points at this paradoxical
opportunity provided by emigration for the sending country and suggests how
developing countries can best realise these benefits.
The ‘controversial’ protection of intellectual property rights increases returns to skills,
expands the innovation sector in the home country and makes it more likely for some
raw human capital to remain at home. This increases the fraction of the population who
can gain from skills acquired abroad and sent back by emigrants. The result is net brain
gain.
The analysis is based on a sample of 35 emerging and developing countries with data
ranging from 1995 to 2006. The measure of innovation is the number of resident
patents taken from WIPO (World Intellectual Property Right Organization), which
represents the number of patents granted in each country to its residents by the local
national patent office.
The measure of the stringency of intellectual property rights protection ranges from a
minimum of 1.08 up to a maximum of 4.54. In 2006, the three countries with the lowest
degree of intellectual property rights protection are Bangladesh, Iran and Nepal (whose
index is lower than 2.2), while in the same year China, Poland and Hungary are among
the countries with the highest degree of intellectual property rights protection (with an
index higher than 4).
Drs Naghavi and Strozzi show that the developing economies characterised by an
index of intellectual property rights protection greater than 3.6 can exploit the beneficial
effects of emigration on innovation. This implies that in 2006 an increase in the number
of emigrants by 10% in Poland leads to an increase in the number of resident patents
there by 1.7%, while the same increase in the number of emigrants in Iran leads to a
decrease in the number of resident patents there by 4.6%.
These results shed light on the joint role of institutions and migration in promoting
growth, by contributing to the rich debate about the brain drain/brain gain effects of
skilled emigration. Political instruments such as intellectual property rights protection
can therefore be used to transform brain drain into brain gain and make a win-win game
out of emigration.
ENDS
‘Intellectual Property Rights, International Migration, and Diaspora Knowledge
Networks’ by Alireza Naghavi (University of Bologna) and Chiara Strozzi (University of
Modena and R.E.)
Contact:
Dr Alireza Naghavi
Email: aireza.naghavi@unibo.it
+39 051 2098873
+39 392 5453414
Dr Chiara Strozzi
Email: chiara.strozzi@unimore.it
+39 059 205 6850