Gi-Wook Shin: Value of foreign talent as social capital

I left South Korea in the summer of 1983 to pursue graduate studies in the United States. At the time I had every intention of returning to South Korea with an advanced degree. After three decades, I am still in the United States, teaching at an American, not a Korean, college. Am I a case of "brain drain" for South Korea?

From a conventional human resources perspective, the answer is yes, as South Korea lost the power of one brain that it had trained up through college. However, if we take a new approach that I advocate here, this is not necessarily the case. It can rather be seen as a case of "brain circulation," as I have been engaged in bridging home (South Korea) and host (the United States) countries in academic and policy communities. 

The 21st century is an era of fierce competition for global talent. The competition to attract highly skilled manpower is becoming fiercer and fiercer among countries as well as among corporations. Economic globalization has facilitated the movement of human labor, and the demand for foreign talent is high in most advanced countries, due to their low birth rates and aging populations. This is especially true for Japan and South Korea, which have the most rapidly aging populations and record-low fertility.

Over the past decades, Japan and South Korea have focused on importing unskilled laborers from China and Southeast Asia to fill their labor shortage in so-called "3D" – dirty, dangerous and difficult – industries. Now, competition for skilled labor has become intense in high-tech industries. Many enterprises in Asia as well as in Silicon Valley, where I live, have no choice but to import skilled foreign workers to make up for their human resources shortages. For example, according to 2013 statistics, 18.5 percent of the nearly 720,000 foreign workers in Japan were professional, technical employees, and of the nearly 760,000 foreign workers in South Korea, approximately 12.2 percent were professional, high-level employees.

Although these numbers are not insignificant, Japan and South Korea, with their strong ethnic nationalism, are at a disadvantage in attracting foreign talent compared to immigrant societies such as the United States, Canada and Australia. In 2011, for instance, approximately 65 percent of the college-educated workforce in Silicon Valley in the field of science and engineering were foreign-born immigrants. Not surprisingly, the Global Talent Competitiveness Index released last November by INSEAD, France's world-renowned graduate business school, places Japan and South Korea 21st and 28th, respectively, in the overall rankings of 103 surveyed countries. Moreover, it ranks Japan and South Korea 76th and 66th, respectively, in the "Attract" pillar of the index, which measures the degree of openness to minorities and immigrants.

The results must be disappointing and alarming for both countries and show the need for a new, innovative approach to utilizing global talent. No matter how aggressively Japan and South Korea try to attract foreign talent, they cannot prevail over immigrant countries that are more open to foreigners. Accordingly, we need a fresh approach that pays close attention to social capital, especially skilled workers' role as "international bridges" in today's global economy. The value of global talent lies in individuals' international networks as much as in their skills and experiences.

Indian example

Let's take the case of Indian software engineers, who are in high demand in many advanced countries around the world. According to our study, many of them are willing to work in South Korea largely as a stepping stone for their professional careers. However, most of them intend to leave South Korea after three to five years to seek a position in a better working environment such as Silicon Valley. This is understandable given the social and cultural environment of South Korea, which is not particularly amenable to foreigners.

From a traditional human resources perspective, South Korea loses manpower as soon as those Indian engineers leave the country. However, if they leave with close ties with South Korean society, they could be of considerable benefit to South Korean corporations as transnational bridges with technical cooperation or information sharing from their new host country.

The same is true with foreign students studying in Japan and South Korea. In 2013, the total number of foreign students studying in South Korea neared 90,000, with 88 percent from developing Asian countries such as China, Mongolia, Malaysia, Vietnam and Thailand. In Japan, the number of foreign students was more than 135,000, a great majority of whom were also from China, Taiwan, Vietnam and Nepal. These students chose Japan and South Korea as destinations in order to learn about the development models of Japan and South Korea. If they found jobs in Japan or South Korea after graduation, they would be valuable human resources there. But even if they return home, they can continue to act as bridges between Japan or South Korea and their home countries in a wide variety of fields. This would be a huge asset for Japan and South Korea.

The diaspora can be useful in the same way. Although not many high-quality workers desire jobs in their homelands, South Korea or Japan, their international networks can be highly beneficial even if they remain overseas. Japan and South Korea should learn from Israel, which has been effectively utilizing the outstanding talent within its diaspora community – without bringing them home – through a program called "Birthright Israel." This program offers steady support to young overseas Jewish adults to stay in Israel for a short time and experience Jewish traditions and culture, thereby helping them establish their identity. Although they might not return to work in Israel, they can nevertheless be expected to act as intermediaries between Israel and the countries in which they reside. 

To succeed in the global competition for talent, Japanese and South Korean corporations and governments must reorient their current policies and strategies to overcome cultural and social disadvantage in foreign talent recruitment. No matter how hard they try to attract foreign talent, they cannot win over immigrant countries that are more receptive to foreigners. Accordingly, they should go beyond trying to bring foreign talent home and must appreciate its potential value as social capital. In particular, they should focus their efforts on establishing transnational bridges that can be beneficial even if skilled foreign labor does not reside inside South Korea or Japan. As my case illustrates, "brain drain" can be converted into "brain circulation." 

This article was originally carried by Nikkei Asian Review on 19 August and reposted with permission.