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Tapping into the Brain Gain

Tapping into the Brain Gain

New research by the South African Institute for Professional Accountants (SAIPA) shows that the brain drain continues, despite anecdotal evidence to the contrary.

However, according to SAIPA Economic Research Analyst, Dr Thomas Höppli, if South Africa unleashes the huge potential of skilled immigration, it could not only balance the brain drain, but even realise a brain gain and tap into a major driver of growth and job creation.  

“There’s no time to dwell on the loss of skills through emigration. Many countries are losing their own skilled population, not only developing countries, but many developed economies too,” says Höppli. “However, as a country we could harness the international mobility of highly skilled people much more by actively trying to attract foreign skills, while also tapping into the potential that our own expatriate population offers.”  

Top destinations for South African skills

The official statistical data and the estimates put forward by Höppli in his paper (Is the brain drain really reversing? New evidence: March 2014) show that the total number of South African-born immigrants in the major 23 destination countries reached a total of close to 750,000 in 2013.  The traditional five immigration countries: United Kingdom, Australia, New Zealand, Canada, the United States of America – and more recently the United Arab Emirates  – are host to almost 90% of South African emigrants. 

“The strict immigration laws in the first five countries favour highly skilled immigrants – people who possess the skills that their local economies need,” notes Höppli. “Such selective and targeted immigration would be beneficial to South Africa too.”

The study also showed that the numbers of South African-born people overseas continuously increased between 2000 and 2010, despite the global financial crisis in 2008, but from 2010 onwards, growth has been very slow, although still positive.

“A slowing down of the brain drain is positive news for South Africa, although even if all South Africans suddenly returned home, there would still be a considerable skills shortage.”

According to Adcorp, in 2013 there were around 830 000 vacancies for skilled people in South Africa – a greater number than those South Africans who are currently abroad. “Also, empirical evidence shows that when highly skilled persons emigrate, it is generally the least skilled of those who eventually return to their country of origin,” he says.

Demand for skilled professionals

The demand for skilled professionals is set to increase even further the more the South African economy grows.  “With a limited local supply of skills, which is further reduced through emigration, the obvious solution would be to source the required skills from abroad,” says Höppli.

“Immigration could in fact be used to help South Africa in the achievement of its economic and developmental objectives.  The country could increasingly tap into the world-wide migration flows of skilled persons.  An inflow of skills would not only ease the skills shortage and lift some of the growth constraints, but could also directly translate into more economic growth and job creation, including for lower skilled persons.”

Harnessing the potential of expatriate South Africans

Moreover, he says, the considerable highly-skilled expatriate population itself holds some potential for South Africa that is still to be harnessed, even if those people do not return.

Beyond the obvious benefits of remittances, it is now gradually being recognised that expatriates who are willing to maintain connections with South Africa can exert a positive and valuable influence on the growth of the country in a variety of other ways.

“Emigrants or expatriates generally play an important role as ambassadors for their country of origin. Contributions may be in the form of: Technology and knowledge transfer, co-operation between institutions, the creation of business and trade networks, trade creation and the channeling of resources and foreign direct investment back to SA,” says Höppli.

Also, in general, the presence of expatriates leads to increased opportunities for trade and exports of local products. “With South African expatriates, their consumption preferences for specific South African products, such as biltong, rooibos tea or wine, has seen the setting up of dedicated South African shops in several countries, which has in turn led to a growing demand abroad for South African products,” he says.

“The key is for government to take full advantage of the opportunities that exist in attracting highly skilled immigrants, as well as tapping into the value that South African expatriates are able to add, and to actively pursue these two avenues in the interests of a healthy, growing economy.”