The diaspora: brain drain or brain charge?
The Polish government has laid out the welcome mat to the diaspora, hoping their return could become the silver bullet to the country’s labour crisis. But a recent study suggests that emigration may have a silver lining for the economy.
“Give us our people back,” Prime Minister Morawiecki said during a BBC interview on the sidelines of Davos 2019. It was directed with a smile to the UK where nearly a million Poles currently reside. The jocular delivery was perhaps not just due to diplomacy but also out of satisfaction. Apparently, the prime minister has seen evidence that his wish may come true. “More and more are coming back,” he said earlier in the interview. “I’m very happy about that because there is the lowest level of unemployment in Poland, 5-5.5% GDP growth, one of the strongest in the European Union.” He has made the plea on numerous other occasions and the message has been echoed throughout his government. An official social media campaign entitled ‘We Are 60 Million’ was launched in July to reach out to the diaspora in an attempt to entice some of them back.
But why the urgency?The answer is that the Polish economy is simply starved of labour. An unemployment rate of 3.58% and a 4.0% projected growth rate for 2019 spells one outcome: labour crisis. And with July’s business sector wages showing a 7.4% YOY increase, there are little signs that the labour supply will catch up with demand in the near future. As a stop-gap measure, the government has become the EU’s number one issuer of work permits to non-EU workers, the majority of which arrive from across the border in Ukraine.
But there is a far larger problem looming in the long term. Like the rest of the OECD, Poland’s 60-and-over segment of the population is growing at a faster rate than the working population (15-to-59). A 2015 McKinsey report predicted that the old-age dependency ratio between the retired and working population will grow to 30% by 2025, representing a 10% jump on 2012 figures. This is where the government 500+ family support programme comes into play, except the effects won’t be seen for at least 20 years. Given the circumstances, it is easy to see why the government would like to welcome back the millions of emigrants who have spent the past 15 years honing their skills abroad, some of them in the world’s leading institutions and companies. But have they received the message? Do they even want to come back?
The PLUGin Foundation, a think tank dedicated to ‘the Polish innovation diaspora’, has attempted to answer these questions with their first survey entitled ‘e-Migrants’. As the title suggests, the recurring survey is mainly designed to “identify, examine and describe the polish ‘innovation diaspora’ spread all over the world,” although more than half of respondents worked in other fields such as finance (7.5%), consulting (5.4%), marketing (5%) and the physical sciences (4.2%). The majority were located in the UK (32.5%), Germany (16%), the USA (11.1%) and Spain (9.1%).
As a first hit-out, the project presented some interesting results, producing a detailed map of the cohort over four main areas: characteristics, experience, national identity and repatriation. Prime Minister Morawiecki may not like what he reads. While 67.5% still embraced their Polish identity and 48.8% of respondents said that they think about returning home, 56.8% admitted that a potential return was only a loose thought. Indeed, an overwhelming majority (82.9%) perceived their emigration as a permanent solution. The two top factors discouraging their return were the political situation (73.9%) and the state of the economy (42.3%) in the country.
This quantitative data hardly points to a ‘reverse brain drain’ occurring anytime soon, but Jacek Ratajczak, co-founder and CEO of PLUGin, believes that a series of pull-factors has made repatriation an increasingly attractive proposition, especially for tech workers. “There are three trends fuelling it. The first being purchasing power parity. While net salaries still look much better in London than in Warsaw, when you compare the quality of life this money gets you, it often turns out you’re better off in Poland. Especially since the pound has lost a lot of value over the last few years,” he said. “The second trend is remote work. Nowadays, you can work for a London-based company [on UK wages] while sitting in a small village in Poland. Frankly, it’s hard to imagine a better option. The last one is career options. Starved for international experience, Polish companies often propose positions and challenges way above what one could get in London. Even if it means less money, the thrill is often found in the challenge.”
Considering the declared motivations of the survey’s respondents, the so-called ‘brain drain’ may not be such a bad thing. The diaspora is sometimes painted as mercenaries chasing a quick and easy buck. And yet only 35.5% of respondents admitted that they had left for better job prospects. In fact, it may be more appropriate to talk about ‘brain charge’ than ‘brain drain’ when 82.8% said that their main motivation to leave was out of curiosity or a desire to see the world and 24.9% put personal development on the top of their list. Even Prime Minister Morawiecki acknowledged the positives. “But of course, we are also happy that they are there building ties and bonds,” he told Channel 4.
Maciej Halbryt, co-founder and COO of PLUGin, thinks that the debate should be turned on its head and questions should be asked of Poland, namely as to why these people felt the only way to be truly exposed to different cultures and ideas was to travel abroad. “What is more dangerous than brain drain is its exact opposite – a complete lack of movement,” he said. “For innovation and creativity, differences are crucial. What we should be encouraging, and PLUGin stands by it, is brain circulation. Go, learn and transfer the knowledge and experience back to Poland.” Ratajczak seems to agree. “One of the biggest issues in Polish entrepreneurship is that way too few people think globally while starting their business,” he said. “International experience helps to overcome this barrier.”
The other overlooked element of the topic is what happens when the diaspora returns. Upon their return, expats often come back as advanced managers armed with invaluable experience, training, connections, language skills and confidence, which they, in turn, inject into local organisations or their own startups. “There are certain areas where international experience is crucial, for example sales,” Ratajczak said. “A good example is investment banking – or more broadly, investments. Even PFR [the Polish Development Fund] has brought in several [Polish] fund managers from London to manage their funds portfolio.” He also highlighted the importance of the returning diaspora in business development. “The startup world is fuelled by people with international experience. Startup Poland’s report on Polish startups indicated that 50% of all Polish startup founders have experience of living and working abroad,” he added. “That’s a huge number and proves that living abroad … opens up your brain and teaches you the kind of thinking needed for true entrepreneurship. Not to mention contacts.”