Software Nerd

Tuesday, December 26, 2006

The Real immigration problem - 1

The WSJ of Dec 14, 2006 had a front-page story about Indian scientists returning to India. Some Indian companies are beginning to move past the "rote" production of generic drugs, and the copying of patented drugs (Indian law is changing to be more in line with US laws). These companies are doing more original research.

The scientist profiled in the article lives a comfortable suburban life, with a 5 acre home and a Mercedes. He's worked for a big US drug company for over 20 years. Now, an Indian company made him an offer to be head of research; and, he's contacting other US-based Indians, enticing them to return "home" to work for him.

The conventional wisdom among the US-based Indian community was that jobs, life and money were all far better in the US. One weighed this against friends, family (and food?) when deciding whether to immigrate. Some Indians would immigrate thinking that they would return one day, though few ever would (Indian's even joke about it, calling it "the X+1 syndrome", as in.. "I'm not returning in year-X, but I'll surely return in year X+1).

This conventional wisdom is changing. Now, Indian salaries for people with certain skills has improved vastly, particularly if one considers the cost of living. Some aspects of life are still more of a hassle, because of the poor infrastructure, but other aspects are easier. More importantly, the types of jobs and the satisfaction that one can get from doing them, is beginning to reach world-class levels in certain fields. The internet has ended earlier isolation from world-class professional peers. Also, the new liberal government import policies allows Indians to deal with the world (e.g. to buy equipment from abroad, without worrying about currency-laws). In short, every year leaves skilled Indians with fewer reasons to immigrate.

This type of tide can turn very fast, even within a single decade. This happened to Ireland. In the early 1990's some recent Irish immigrants were just starting to return home. Ireland was playing in the World Cup and the papers had stories about the US embassy refusing visas, suspecting a desire to immigrate. However, the tide had already turned. Within a decade, Dublin had constuction-cranes per capita to rival any far-eastern boomtown.

A similar phenomena is starting with India. The tide has not yet turned, but it will. The first change will be invisible. Indians continue to come to the US to work, but many will not be lying when they say they intend to return home in a few years. After that, the next phase will be a point when net immigration from India to the US will actually slow and a different attitude will set in: the idea that "if I don't return now, I'll miss the bus". (All this assumes that laws will remain unchanged.)

For decades, the US has held a single competitive advantage over almost every other country: freedom. This relative freedom has drawn people from all over the world, who have come here and made the US wealthier. The rest of the world finally caught on. Well, not all of it, but the far east did, then China did, then India. So, the next few decades will see a whittling away of the US's relative advantage. The prognosis is not bad for the US. One must not think in relative terms. The US will continue to grow and boom and be rich. Only, the others will start to catch up. The US will grow richer in absolute terms, even while it does not do so in relative terms.

Personally, I want the best and brightest to move to my country, my state, my city. However, I don't want the government to entice them here. All I ask is that the government not put barriers in the way; and this brings me to the title of this post. The real immigration problem is the restrictions placed by the government that impede immigrants from coming to where I am. (I'll write more on suggested changes in another post.)

Post script: My close friend, TiredImmigrant, has returned to India, to take up a job as a CTO in a software company. We met up around XMas to say goodbye. It was strange, he said, the excitement he felt in going back to India, to the boom and bustle, was what he felt years ago getting on his first flight to the US. All the signs of tiredness are gone. (I have linked to tiredImmigrant's post before. While I don't agree with all he wrote, I still think it's worth reading.)



  • I am encouraged by your interesting anecdotes of how India's political economy is becoming better, as evidenced by the changing immigration pattern of software programmers. India's upward ascent appears to be real (although not inevitable if bad governmental policies derail the changes).

    If it ever were to happen, I would actually look forward to India becoming a net *importer* of software talent. If that were to occur, it could only be the result of a great expansion of economic liberty and wealth in India.

    In that event, the whole world, including the United States, would benefit from the greater availability of new and cheaper products and services from India, and from more intensive labor specialization across the global economy.

    If that happened, which company would become the "next India" and export its human software talent? Malaysia? The Philippines??

    By Blogger Galileo Blogs, at 7:58 AM  

  • India's ascent is well underway. In software development, the pattern is in the process of changing, but hasn't yet reversed. Indeed, the annual quotas for H1-B (work permit) visas usually get subscribed within months.

    OTOH, a higher proportion of Indians are thinking of a stint in the US as a way to broaden their experience and become more qualified managers when they return home.

    My guess is that the next trend would be for one or more of the Indian software developers to do more business in the US itself. Some are already hiring people from the local population at customer sites (see this article). Like many other businesses, the Indian companies want to move out of the cost-leadership role and into a quality-leadership role, with bigger margins.

    If India rolls on like this, and if the middle east sees the light (say in the 2010's) and if Africa catches on (say in 2020), the world's going to keep seeing more wealth and riches.

    By Blogger softwareNerd, at 9:39 AM  

Post a Comment

<< Home