Migration: The great U-turn

January 23, 2010

The current economic downturn is dramatically altering the world as we know it – including domestic and global migration patterns. In fact, the Wall Street Journal noted back in June that the biggest turnaround (described as the “great u-turn”) or shift in migration flows since the Great Depression may now be underway. Just take some of the following migration trends into consideration:

The USA. The Wall Street Journal recently noted that the financial crisis has dramatically altered migration patterns in the USA. The movement of residents from the Northeast and Midwest to job-producing states in the Sunbelt and the West has lost its momentum with the one exception being Texas (which has no income tax and fairly inexpensive housing) as the state is still attracting entrepreneurs and large corporations alike. Meanwhile, the housing bust is largely forcing California residents to stay put – preventing what would otherwise be a massive exodus from a state notorious for its high taxes and a high cost of living. However, many Americans and not just Californians are stuck and will be stuck where they are for the foreseeable future while the image of America itself as a land of opportunity is diminishing.

migration Migration: The great U turn
Israel. On a different note and according to another recent article in the Wall Street Journal, immigration to Israel and even the Palestinian West Bank is surging. In fact, it was noted that by the end of December 2009, about 4,000 North American Jews would have immigrated to Israel for the year – not only an increase of 33% over 2008 but the highest number in one year since 1973. These new immigrants will more than likely make significant contributions to the Israeli economy, which is now fueled mainly by high tech industries such biomedical, weapons-manufacturing and software. Moreover, Israel has achieved at least 4% a year economic growth from 2004 to 2008, has a lower unemployment rate (7.8%) that the USA and is in the process of entering the Organization for Economic Cooperation and Development (OECD). In other words, Israel will soon be upgraded from being considered a “developing economy” to a “developed economy.”

China. Meanwhile, the New York Times recently noted that China has begun to lure some high-profile scientists back home to the surprise of many and these scientists are expected to help China close the gap that separates it from the more technologically advanced nations in the West. In fact, there are now about 5,000 Chinese scientists who are involved in the hot emerging field of nanotechnology alone and it was noted that within a decade or two, China will pass the USA in its ability to use research and development to create products to market to the rest of the world. Nevertheless, it was still noted that 180,000 students left China in 2008, 25% more than in 2007 and that for every four students who left over the pat decade, only one returned with those achieving engineering or science doctorates from universities in the USA being the least likely to return.

Ironically though, while many Chinese students are still leaving, another recent New York Times noted that American college graduates who cannot find jobs at home are moving to China which is more friendly for both entrepreneurs and job seekers. These westerners bring with them skills and ways of doing things that are harder to find among the local Chinese and will no doubt help to turn the country into a future technological, economic and even outsourcing powerhouse.

How will the above trends impact outsourcing and for that matter, innovation? Obviously people will always migrate to where jobs and opportunities are but jobs and opportunities also have a habit of following the people. Hence, today’s migration patterns may foretell the migration pattern of tomorrow’s jobs and opportunities.


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