Immigration Promotes Innovation
Philippe LegrainFor all the criticism globalization receives today, the diversity it has brought about offers a range of benefits. And these are not only social and cultural benefits. There are also tangible economic benefits.
Legrain points towards the research of two Italian economists, Gianmarco Ottaviano and Giovanni Peri, who have attempted to estimate the economic value of cultural diversity. Examining data from 160 U.S. cities between 1970 and 1990 they discovered that the average wages earned and rent paid by U.S. born people was higher in areas that were more culturally diverse.
The higher wages suggest that cultural diversity increases productivity while the higher rents suggest that people are willing to pay more to live in more culturally diverse places. Moreover, their findings stand up to a barrage of statistical tests to see if coincidence or reverse causality lie behind the results.
Drawing from this research, Legrain argues that immigrants bring both the difference in perspective that is vital in any problem-solving team, and the determination to succeed, making them invaluable to any advanced economy.
Co-founders Sergey Brin of Google, Jerry Yang of Yahoo! and Pierre Omidyar of eBay are all immigrants, and furthermore they arrived not as skilled immigrants, but as children.
Legrain, a British economist, points out that of Britain’s Nobel laureates, 21 arrived in the country as refugees. Equally, many of America’s Nobel laureates were teams composed of US-born and foreign-born talent. A diverse group of people solving a problem, he claims, brings better and faster solutions.
Such diversity is not just necessary in high-tech industry, because advanced economies increasingly rely on problem-solving in a variety of sectors. Whether it be new medicines or new computer games, designing innovative products and policies is essential. The old recipe – higher education spending and investment in R&D – is no longer enough to deal with modern challenges, warns Legrain. “If we already knew how to develop tomorrow’s technologies, they’d be today’s technologies.”
Critics who say that immigration has few or no economic benefits are profoundly mistaken.
Related Materials from the Atlantic Community:
- The Dangers of a New American Isolationism
- Iraqi Refugees: Open Western Doors to the Most Vulnerable
- The (Euro)Land of Opportunity
The summary above was prepared by Cosmo Macfarlane of the Atlantic Community editorial team from “Cosmopolitan Masala: Diversity Enriches Us All” published on Yale Global in November 2007.
