3/02/2005

A brain drain in America?

According to The Times of India,( http://timesofindia.indiatimes.com/articleshow/1022305.cms) America is experiencing a brain drain in Science and Technology. The site says, "The highly-skilled, India-born talent that once flocked to the US is now returning home, turning America's brain drain into India's brain gain". If this is true now would be a great time to get into these fields because demand for these positions will be on the rise and thus compensation will be on the rise. What does this mean for American Companies? How do you think this brain drain will affect India?

3 comments:

rico said...

Americans have always been able to get involved in other countries to be profitable. There are American companies in India right now that are benefitting from the "brains" going back there. I believe American companies are going to go where the best possible means of production is, whether it is India, China, or Argentina. We will lose jobs and India will see a boost in the economy, but Americans will benefit from it in the end.

Nick said...

I think that if we lose these people and the industries it will force the U.S. to create or get involved in new industries. This will not affect our economy in long run. It would cause new industries that nobody has even heard of yet.

Dr. Tufte said...

-2 on Ron's post for a poorly formatted link and capitalization errors.

One principal of economics is that gains accrue to the owners of fixed assets. In this case, the fixed asset is the brain power of the people in question, not the countries or companies.

The location of the brains used by American companies does not affect their bottom line - the price and productivity of them too.

Similarly, the location of the brains does not affect India either - what matters is whether the money they earn gets payed to make purchases from holders of fixed assets in India or someplace else.