This essay will explore the issue of the brain drain as it relates to New Zealand
businesses. Firstly, a definition of the brain drain will be provided, and the brain drain will
be placed in context within the umbrella concept of international talent flow. Following this,
the effects of the brain drain on New Zealand businesses will be explored. Actions which
could be taken by New Zealand businesses to alleviate the effects of the brain drain will also
be proposed.
The term ‘brain drain’ has been defined in a consistent way by a range of
researchers, including Davenport (2004), as the movement of highly skilled workers out of
the country of interest, which in this case is New Zealand, on a permanent basis. There is,
however, often a lack of clarity over the length of absence which should be defined as
permanent, which makes it very easy for the number of workers leaving New Zealand
permanently to be significantly overestimated. Carr, Inkson & Thorn (2005) argue that this is
due to the popular coming-of-age ritual known as the ‘Overseas Experience’, or OE. Most
young people who undertake an OE, which often takes the form of a working holiday, are
absent from New Zealand for a significant length of time. This period is often long enough
for these workers to be classed in statistical analyses as having left the country permanently,
when in fact they do intend to return to New Zealand at some point. In a relatively small
country such as New Zealand, even a factor as trivial as this can significantly effect the
overall immigration statistics, and so influence the consensus on the topic. In this case this
effect has a negative impact on the public perception of the true size of the brain drain.
The brain drain alone does not present an accurate picture of the true international
movement of skilled workers. It is also possible to consider the brain drain alongside its
opposite, the so-called ‘brain gain’ as part of a combined talent flow or ‘brain circulation’.
Many academics, such as Miranda & Saravia (2004), take the position that it is preferable to
consider the idea of a combined talent flow or brain circulation rather than the individual
concepts of brain drain and brain gain. This approach is beneficial when examining talent
flow in a global sense, rather than simply considering a single country, because it facilitates
viewing brain circulation as an international ‘web’ of talent flow, rather than as a simplistic linear transfer. This is also increasingly important now as, according to Tung (2008), countries which were previously designated as home or host countries are no longer so
easily categorised. Many countries formerly seen as the source of skilled migrants are now
experiencing a significant influx of overseas talent and vice versa, reversing the historical
trend, and necessitating a wider view of talent transfer.
The impact of the brain drain may not be as great as it is perceived to be, when
brain gain is also considered. According to Davenport (2004), the net effect of brain
circulation for New Zealand has remained relatively consistent for many years. In fact,
Davenport asserts that in the year 2000, when the brain drain was the focus of much media
attention in this country, statistics show that there was actually a net gain in skilled workers.
The author further states that this shows that the public largely ignores any evidence against
the brain drain and reacts in an emotive manner rather than a rational one to reports of the
net loss of skilled workers. Businesses would do well to ignore societal pressure to react to
talent flow in this manner. In order for New Zealand companies not to be affected
negatively by the loss of potential employees to other countries, they need to take an
unbiased view of the brain drain. This would involve conceptualising the process as an
international web of talent flow, as discussed above. Realising that talent flow need not be
detrimental to business growth can have many positive effects on New Zealand businesses.
For example, when skilled New Zealanders move to countries such as the United States, the
technical ability of these workers is concentrated in locations which are better equipped to
harness their talent. However, this concentration of talent would be useless to New Zealand
firms if these businesses do nothing to take advantage of it. Kuznetsov & Sabel (2006)
suggest that one possible way in which companies could do this is by cultivating networks
of expatriates and encouraging them to collaborate on ideas, allowing for much faster
progress in areas such as research than would otherwise be possible. A limited number of
these diaspora networks already exist in New Zealand, such as the KEA New Zealand
network, whose members share knowledge with each other internationally. However, there
is a lot of room for improvement, as the opportunity exists for a great number of businesses
operating in a range of niches to set up their own networks. This would have the effect of
creating opportunities for many more overseas research breakthroughs to be taken advantage of by businesses in New Zealand, to improve their efficiency, productivity and
profitability.
Even if companies in New Zealand made efforts to harness talent overseas, they
would still be affected negatively by global talent flow. This is because businesses are not
taking advantage of the brain gain. According to Carr et al. (2005), many immigrants, but
particularly those in the non-ESANA (non-European, South African or North American)
demographic, are underemployed. These workers often earn lower salaries than New
Zealanders with similar qualifications. This can also apply to New Zealanders returning
from overseas and re-entering the workforce, although not to such a great extent. Carr et al.
(2005) further explain that the underemployment of immigrants may be explained in terms
of employers viewing the act of employing qualified immigrants in their company as a
threat to their own job security, or as denying locals these job opportunities. This indicates
that many New Zealand businesses must address their seemingly xenophobic recruitment
policies or practices, in order to take advantage of skilled immigrants.
In summary, the brain drain and brain gain must be treated as a single combined
brain circulation in order to accurately reflect talent flow. Biased recruitment policies are
perpetuating the brain drain myth, when in reality the process of brain circulation has many
positive flow-on effects for the home country. However, changes in individual business
policies are needed in order to be fair to immigrants and encourage expatriate networking,
enabling the harnessing of overseas innovations.
References
Carr, S. C., Inkson, K. & Thorn, K. (2005). From global careers to talent flow: Reinterpreting
‘brain drain’. Journal of World Business, 40(4), 386-98. Retrieved from Elsevier
ScienceDirect Complete database.
Davenport, S. (2004). Panic and panacea: brain drain and science and technology human
capital policy. Research Policy, 33(4), 617-30. Retrieved from Elsevier ScienceDirect
Complete database.
Kuznetsov, Y. & Sabel, C. (2006). International migration of talent, diaspora networks and
development: Overview of main issues. In Y. Kuznetsov (Ed.), Diaspora networks and
the international migration of skills : How countries can draw on their talent abroad (pp. 3-
20). Retrieved from ebrary database.
Miranda, J. F. & Saravia, N. G. (2004, August 1). Plumbing the brain drain. Bulletin of the
World Health Organisation, 82(8), 608-15. Retrieved from EBSCOhost database.
Tung, R. L. (2008). Brain circulation, diaspora and international competitiveness. European
Management Journal, 26(5), 298-304. Retrieved from Elsevier ScienceDirect Complete
database.
