Entrepreneurial migration: It’s not brain drain, it’s global network formation


I was recently interviewed by ABC TV for a segment on Australian entrepreneurs moving overseas. My key message was that we absolutely shouldn’t see this as “brain drain”, but the formation of rich networks that are enormous enablers for the economy and entrepreneurial opportunities in the future. The same messages apply to any country, but Australia represents a great case study.

There has been massive attention in the Australian media lately about entrepreneurs who have moved to Silicon Valley. Among other programs, ABC’s Foreign Correspondent did a one-hour feature called The Revenge of the Nerds featuring the Aussie startup scene in the US, the Sydney Morning Herald has a video series on Digital Dreamers, and a long series of articles with titles like Brain drain: why young entrepreneurs leave home.

Even Bloomberg has weighed in with a segment titled Oz Tech Entrepreneurs Set-Up Shop in Silicon Valley, shown below.

With a more balanced view BRW magazine recently ran a great feature titled Why Australian Technology Start-Ups Don’t Need To Go To Silicon Valley, examining the choice of entrepreneurs to go to the Valley, stay in Australia, or go overseas and then return home with new-found networks and lessons learned.

The article ends:

And to make more of those companies, start-ups need links to the capital, attitudes and zeitgeist of Silicon Valley. “Australia will never have a tech-industry that dominates the world but if we structure our alliances carefully, we can integrate . . . which will give us a fighting chance of being a leading industry globally,” says US-based Australian entrepreneur Elias Bizannes.

Southern Cross Venture Partners managing director Larry Marshall says the founders he meets in the Valley who then return home excite him most. “Because they go back changed,” he says. “Their perspective has been widened and what happens is they’ve made these contacts here and then they go back and chip away at it.”

He could be talking directly to Nikki Durkin’s experience. Her Silicon Valley connections and conversations will influence 99dresses.

Forget the brain drain, Bizannes says.

“Rather than [taking] the attitude that we’re losing talent, it should be that we’re fostering the links,” he says.

That’s exactly the point, and the one I emphasized in my interview on ABC TV.

Since well before I wrote Living Networks in 2002 I have been studying global innovation networks, and how necessary they are to entrepreneurial success anywhere in the world. Back in 2005, in contributing to an earlier phase of public discussion of this issue in Australia, I wrote:

When talented people leave Australia, they create connections with the world. In a networked world, this is a critical source of success for us. As a country, we need to encourage people to go overseas. As importantly, we need to tap the potential of the rich connections between people and ideas that this enables.

I am by no means advocating that all talented Australians should leave the country. However if a certain proportion of our best work overseas temporarily or even sometimes permanently, this is far better than if none go overseas. In an interconnected, global, knowledge-based economy, being deeply connected overseas is critical for our future. The alternative is that we live in an isolated, introspective, backward economy.

Of course this applies to any country and any location, including Silicon Valley itself. AnnaLee Saxenian, currently Dean of UC Berkeley’s School of Information, did a great study and paper Local and Global Networks of Immigrant Professionals in Silicon Valley in 2002, focusing particularly on the Chinese and Indian networks in the Valley. She wrote:

The survey presents substantial evidence that the “brain drain” from developing countries such as India and China has been transformed into a more complex, two-way process of “brain circulation” linking Silicon Valley to select urban centers in India and China. Although there is little evidence of a reversal of the brain drain such as that seen in Taiwan in the early 1990s, the professional and business links between California and these distant regional economies are developing quickly. The scale and decentralized nature of these transnational activities have important consequences for economic development elsewhere in the world, as well as for the formulation of policy regarding trade, immigration, and intellectual property rights in the US.

So let’s drop the talk of brain drain. Let’s encourage people to travel the world, move to where they see opportunity, to form new networks, and of course maintain their ties to where they came from. From that, rich entrepreneurial networks will form that will benefit local and global economies.