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Work globally, develop locally: Diaspora networks as springboards of knowledge-based development
Yevgeny Kuznetsov
Senior Economist, World Bank Institute, Washington DC, United States of America
Charles F Sabel
Maurice T Moore Professor of Law, Columbia Law School, New York NY, United States of America
Abstract
This article examines ways to increase the chances that migration of high-skill workers will benefit sending countries. It explores the formation of diaspora networks as search networks or bridge institutions linking global opportunities to the local capabilities of sending countries.
It contributes to an emerging literature that sees the development of problem-solving skills and certain types of managerial culture as at least as crucial to economic development as such traditionally cited factors as clearly defined property rights or anti-inflationary monetary policies.
Keywords
highly skilled diasporas, economic development, diaspora networks, search networks, serendipity
Article Text
The co-evolution of diasporas and developing economies
Actors in developing economies must have the capacity to acquire new knowledge - to learn new ways of doing things - if they are to compete in the world economy. Learning, in turn, supposes and contributes to the ability to search out and usefully recombine scattered information about production methods, markets and resources. Because development depends on learning and learning on searching, development almost invariably depends on linking the domestic economy to the larger, foreign world, for even the strongest economies quickly rediscover (if they have ever forgotten) that they cannot generate all world-beating ideas in isolation.
Historically, contact with the outside world was often established through skilled migrants and the ethnic or religious communities they founded in the host country. Examples include the contribution of the Huguenots in France; the Jews in Monterrey, Mexico; the Chinese in Indonesia, Malaysia and the Philippines; and the Indians in East Africa and later Great Britain. During much of the twentieth century, multinational firms facilitated knowledge transfers by establishing facilities - usually for the manufacture or assembly of mature products - in developing countries, often with the assistance of local elites.
Viewed from this historical perspective, network diasporas are but the latest bridge institutions connecting developing economy insiders, with their risk-mitigating knowledge and connections, to outsiders in command of technical know-how and investment capital. At least for developing economies, the attraction of diaspora networks over immigrant communities and multinational firms is that networks promise to depoliticize the relation between domestic actors and the foreign actors from whom they learn, transforming a volatile, often irrational struggle for power into a mutually beneficial economic exchange. Learning is often connected to ugly frictions. Economically powerful ethnic minorities have traditionally been suspected of having greater loyalty to their ethnic community than to the host country and of being tempted to exploit the latter to benefit the former. Powerfully autonomous and often footloose, multinational firms are viewed as the agents, even the masters, of economic imperialism rather than partners in development.
The actors in diaspora networks, in contrast, are native sons and daughters. Even if they are wealthy or connected to wealthy families or important multinationals, they seldom command the resources attributed to economically potent minorities (whose riches, though real enough, are often magnified by envy), and they are not manifestly at the command of the world's largest companies. They are, at least potentially, a connection to the indispensable world of foreign knowledge that can be domesticated and then used to discipline the behavior of ethnic communities and multinationals. That the members of network diasporas are likely to be suspected in their host countries of putting personal gain or ethnic ties above managerial professionalism makes them, from the point of view of the sending country, more pliant and more willing to cooperate on a truly equal footing. That diaspora networks seem to form spontaneously, as the result of both the shortcomings and the successes of the mesh of individual and national strategies for economic advancement, only completes the picture of the new institution as the market/manna solution to a crucial problem of coordinated learning too long fraught with political passions.
The reality of network diasporas is far more complex and unruly than this juxtaposition suggests. Whether diasporas are seen as adjuncts to rather than adversaries of domestic elites depends on how the two groups have interacted historically. Whether, and in what way, diasporas connect domestic and world economies depends on the interaction of changes in the global production or supply chain patterns, changes in domestic growth opportunities, and changes in the economic activities and strategies of the diaspora members themselves. Diasporas are thus mirrors of national development, reflecting the migratory pushes of national crises and the pull of the global economy. Network diasporas are not a self-generating, context-free solution to the perennial problem of learning from abroad without being victimized by the foreign master; they co-evolve with the political and economic contexts within which they operate.
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