March 15, 2004 | Volume 1, Issue 1
Development and Human Capital
Development theory has come under assault in recent years primarily due to its inability to solve major problems (i.e. poverty) associated with the developing world. “After four UN development decades, the income gap between North (developed nations) and South (developing nations) remains as wide as ever. In much of the South, crushing debts caused by economic mismanagement and reckless lending has brought about (notable setbacks).”1 With many western economists relinquishing claim to development economics, developing nations are now faced with addressing the legacy of and taking responsibility for their development.
Although development theory (in its current form) incorporates norms and ideals exogenous to many developing nations, there are key aspects that should be maintained by any nation wanting to survive in the international political economic system. One of these aspects is human capital. Many studies have found a strong positive correlation between the human capital of the domestic population (the set of skills that increase an individual’s importance in the market structure)2 and levels of social and/or economic performance of the nation. The core questions for developing nations are how to define, cultivate and sustain human capital needed for their development.
In this paper, the commitment to the development of human capital, attainment of a skilled workforce, level of development currently achieved and the effects of brain drain and circulation will be studied and the status of human capital investments in recipient countries will be addressed. The effects of the mobility of human capital will be analyzed in a case study dealing with developments in India during the last decade. Finally, recommended policies on the reversal of the status quo for developing nations will be given.
What is development? – Assumptions
In order to examine the roles of human capital in development an understanding of the word “development” must be reached. After all, what exactly is meant by development? Development can conjure many meanings; however, its use during the last four decades denotes a sense of growing to reach one’s full potential or a finite goal.3 For a nation to place itself in a stage of development, it must first recognize itself as underdeveloped, see the state of developed nations as a desirable or superior state and take appropriate steps (usually externally suggested/imposed) to reach a developed state.4 The problem some scholars have seen with such connotation is that the goal manifests itself as the emulation of or the need to become like the developed world. This has meant that developing nations must peg their condition somewhere on the evolutionary track of the developed and imitate policies that should accelerate progress and allow for equality. The uniqueness of each nation’s historical and societal sequence is largely ignored to ensure a universally applicable term.
Theories of development tend to follow a “one size fits all” trend. The earliest theories, which adhered to the neo-classical model, equated economic development with growth of output determined by the market value. The primary impetus was trade via specialization (a la Adam Smith) and would make all parties better off. Countries were to export goods in which they had a comparative advantage and the market would determine a fair value for the goods.5
However, developing countries’ comparative advantages usually lie in agriculture or raw materials, goods that are usually subject to trade barriers and market fluctuations and that decrease in value over time. Conversely, developed countries specialize in finished products or services which increase in value over time. Therefore, the output (growth) does not equate with the outcome (development). All else being equal, a status quo leads to an increase in the difference of development.
Figure 1:
Although growing in GNP or per capita income developing nations fell far behind other nations and accumulated a large poor population, but the focus on output instead of outcome masked this trend for more than a decade.
The next focus in development theory was growth with distribution, i.e. a growth that positively affected all segments of society. Yet the means by which a nation was to accomplish such growth remained the same. “Development in the 1950’s and 60’s was (usually) seen (with) GNP growth either trickling down to the masses in the form of jobs and other economic opportunities or create the necessary conditions for wider distribution of the economic and social benefits of growth”.6 However, this focus on a “trickle-down” GNP did not amend the outcome. Again, nations grew (and met their targets) but with a larger disparity of income and little improvement of the poverty of the majority of their people.
Therefore, development in the 1970’s was “redefined” with the incorporation of the “reduction or elimination of poverty, inequality, and unemployment in the context of a growing economy”,7 while providing revenue for the state to support health and educational reforms and advances. Again, the focus was on growth being the foundation on which nations would be developed, not the end goal.
The basic assumptions were that the developing world was abundant in land, labor, and natural-resources potential. Only the infrastructure was needed to provide the foundations for a modern economy and the capital to bring about this change.8 The proposed timeline indicated that investment in infrastructure would occur through the application of formulas consisting of capital savings and expenditures and an environment geared to encourage foreign investment.
Companies and investors would be attracted to these regions demonstrating a commitment to economic growth, fulfilling the equation and propelling growth and improving the socioeconomic situation.9 However, this was not the case.
What is development? – Realizations
The emphasis on growth first did not unilaterally alleviate the troubles of the developing world and relatively few nations have achieved the level of sufficiency expected by the model. One of the key failures of the development via growth theory was its “optimistic view of the state”. The state was to “act as the modernizer with zero transaction costs and unbiased developer (responsible for the allocation of) resources to promote national prosperity through economic growth”.10 However, the state was not unbiased and promoted the interests of a few. Another failure was the focus on trade-oriented growth. To initiate growth, developing nations borrowed, causing debt accumulation that weighed heavily on these economies. This has led to some clear disappointments, with successes where least expected. Many African nations abundant in land, labor, and natural-resources and that were recipients of capital, have not improved the living standards of their populations, while East Asian countries like the Republic of Korea and Malaysia not as rich in natural resources have fared well. Evidently, a commitment to growth, natural resources, and availability of capital are not guarantees for growth.
Therefore, the prescribed development model that guided development theory had to change. Growth is not a means but an end to integrate all aspects of the nations’ social and economic enhancement. There is a new awareness of the environmental and social consequences of development and sustainability is being promoted in tandem with nature and society. This change also incorporates old (but originally ignored) theories and new variables, such as rights and contracts, the political economy and the social efficiency of institutions, the need to limit transaction costs in a system in order to obtain more efficient markets. Structural adjustments relying on the neo-classical model are used to address impediments to growth such as debts and deficits. However, structural adjustments policies have an air of deja vu since the earliest development theories also adhered to theneoclassical models.
Although different in terms and goals, the structural adjustment approach11has given sub par results with countries that follow such policies being either (a) continually reliant on assistance from the IMF and other international institutions or (b) exhibiting downward trajectories on some (if not all) economic indicators. Recent examples as small as Mozambique and large as the Asian financial crisis have thrown structural adjustment policies into question. Although less known, the problems facing Mozambique are typical of many developing nations. In order to secure loans from the World Bank, Mozambique was required to end subsidies of its cashew nut industry. These subsidies which gave farmers transportation to market and supported plants processing the cashews, added value to the raw materials.12 Due to the elimination of subsidies which were small compared to Europe and American farm subsidies13 many farmers were unable to sell their products and became unemployed. In Mozambique and elsewhere the effect of international institutions’ borrowing conditions and unfair use of free trade policies have fostered the notion among many developing countries that this new development model is a failure and it only favors the developed countries.
A clear example of this failure was the collapse of the World Trade Organization’s talks in Cancun, Mexico. There, developing countries reliant on agriculture wanted richer nations to remove protectionist methods that impeded free trade in this sector. However, many western nations refused to consider such issues. This, coupled with the lack of agreement on other issues such as tariff reduction and international investments led to a conference with no positive result except for developing countries achieving “the respect for [their] group.”14
But respect does not increase one’s standard of living. Addressing the issues of trade, globalization and the diminished international role of developing nations is not enough. Although an international perspective is needed to survive in today’s international economic system, a developing nation should not anticipate that others will act altruistically. Developing countries must find a way to perform needed self-repair.
Self-repair
The primary focus for developing nations should be on endogenous development, specifically one based on human capital. The focus on endogenous development through human capital is nothing new and dates back to T. Schultz’ generalized capital theory in 196115 and his collaboration with G.S. Becker in the mid 1960’s.16 Their definition of human capital represented the set of skills that increase an individual’s value in the market place.17 Schultz felt that, like other capital, human capital could be increased through investment in and commitment to human factors such as education, training, and healthcare.18 This theory led to increased investments in human capital and resulted in the emergence of research and development policy, computer-based tech industries and entrepreneurship.19 However, the international development experts largely did not support (and even disregarded) this approach and consequently the policies were implemented primarily in the developed world. The rejection of the approach was due to the two issues that differentiate human capital investments from other investments: its long maturity period and mobility.
Investment in human capital such as education matures when those receiving the education have spent sufficient time in the system to become members of the labor force – a time span of approximately 8 years. When one incorporates the time and investment of the government and other institutions, the opportunity costs swell.20 An investment in human capital is a continuous process and must be made every cycle (8 years) to maintain results. In addition, mature recipients of any nation’s human capital investment are increasingly exposed to the world labor market due to the ease of mobility. Therefore, states must wait for the maturity of investment in their citizens’ education and compete for the right to retain those educated citizens.
Since theories of development focused on the acceleration of the stages of economic growth, human capital investment was considered too long term. With limited access, only the very privileged received education, training and healthcare and if there was investment in human capital, it “emulated colonial models” and did not address the needs of the nation. However, endogenous investments in human capital were done by some Asian nations21 in spite of the prevalent mindset. These nations harmonized education with the labor market with a strong emphasis on skills needed by the state in all sectors and encouragement of entrepreneurship in all enterprises. There were expansions of vocational and industrial education (note the emphasis on skills immediately needed by the labor market) using a “learn by doing” method.22 These nations eventually had success and demonstrated the flaw in disengaging human capital from state development.
The cases of the South and East Asian countries, specifically, India, Pakistan, Malaysia, Republic of Korea (Korea) and Thailand exemplify this occurrence.23 Malaysia, Thailand and Korea were poor countries with an average GNP of $225 per capita income (G/CI) in 1966. Concurrently, India and Pakistan were averaging $100 G/CI. By 1999, Malaysia, Thailand, and Korea had increased their G/CI by 10, 13 and 65 times respectively while India and Pakistan’s G/CI increased by only 5 times. Although there were initial differences with the economic structures of these countries, one thing was clear: they were all poor. However, Malaysia, Thailand and Korea have one common factor: they had made and still maintain high levels of investments in human capital.
For example, in 1960, Malaysia, Thailand and Korea had literacy rates of 50, 68, and 71% respectively. In 1998, all of these nations had literacy rates at 90% or above. India and Pakistan’s literacy rates in 1960 were 30 and 15% respectively and increased to 55 and 43% in 1998. Life expectancy at birth, in 1960, in Korea, Malaysia and Thailand averaged approximately 52 years; by 1999 it was 71 years. In contrast, India and Pakistan averaged 45 years in 1960 and 60 years by 1999.24
Malaysia, Thailand and Korea started out with a higher level of human capital and buffered that with continuous commitment to policies that were geared towards the human factor sectors (e.g. education). Due to their initial emphasis on human capital enhancement policies, these countries had labor forces with higher market value and were therefore able to attract more investment capital than their South Asian counterparts.25
The importance of Human Capital
Today’s workplace, with its emphasis on managerial skills and technological automation, places higher educational demands on the labor force of developing nations. Lower labor cost is not sufficient to attract investments.26 And “as labor cost differentials or proximity to raw materials become less important in decisions to locate technology-intense facilities, the (human capital) of the local labor force (is) of paramount importance.”27 Strong human capital attracts and encourages growth, not the other way around. An educated population also leaves an enduring positive effect economically with a larger tax base and socially through increased political involvement. Therefore, an investment in human capital should be a part of any economic development policy. However, this is easier said than done.
In endogenously focused development models, international growth differences are dependent on initial human and physical capital endowments.28 The availability and the prevalence of a nation’s human capital determine the rate of growth of its economy and integration in world markets. Human capital investments were less attractive in the 1960’s due to a long maturity period and mobility yet these issues are still prevalent today and they manifest in more radical forms. With the technological advancements in transportation and communication, mobility of qualified workers is the norm. Most importantly, people with wanted skill sets have a larger probability of leaving developing nations due to the competitive nature of the international job market. This becomes a substantial problem if the more competitive nations are in short supply of certain skills which developing nations need to retain producing what some development economists have dubbed “brain drain.”
Brain drain
Brain drain, a symptom of problems in the socio-economic structure, is skilled labor exiting a market (emigration) at a greater rate than it enters the market (immigration). This phenomenon is nothing new and has been occurring throughout time. Yet, never has this trend affected one particular subset of the globe (developing nations) so disproportionately.
There are many causes of brain drain such as unstable governments, poor economies, uncompetitive wages, lack of infrastructure and appropriate opportunities for acquired skills, etc. But whatever the cause, many developing and transition economy countries (e.g. Nigeria, South Africa, India, and Bulgaria) are experiencing brain drain and developed nations are the recipients. Observably, this trend has adverse effects on the export country, which loses valuable skill sets that are (a) replaced by expatriates for higher wages or (b) not filled at all, delaying development. Yet, a less visible but still important diagnostic effect occurs on the import country. The acceptance of certain skill sets by these countries means that they are experiencing shortages in those areas. Brain drain may conceal import nations’ inability to adequately invest in and commit to their human capital.
Combating brain drain can be very difficult. People’s ideas and production often belong to the company a person works for.29 With domestic shortages in skills at all levels, misallocation of qualified experts (i.e. an engineer working as a taxi driver because it pays more), and an inability to compete internationally, developing nations are falling further behind. The causes of brain drain must be addressed realistically within the context of each nation’s needs. But most importantly, there must be a serious effort to amend the trends.
Case Study – India
Indian immigration trends of the U.S. changed greatly due to the passing of an amendment to the Immigration and Nationality Act, the Hart-Seller Act, in 1965. This act removed many discriminatory principles that hindered the immigration of non-Europeans to the U.S. and led to an increase in the number of immigrants from all parts of the globe, including Asia. Although the relaxation of immigration laws attracted both skilled and unskilled labor from Asia, H-1B30 visas allowed employers to attract much needed skilled labor such as doctors and academics.
At the same time, the Indian government headed by Jawaharlal Nehru and later Indira Gandhi presided over a stagnant economy. Still entangled in the logic of the permit raj (regulatory policies pursued by the Indian government) and the effects of the First, Second, and Third Five-Year Plans, the economy experienced a decrease in industrial growth, trade, private investments and food production.31 Although some of these troubles in the 1970s were instigated by the oil crisis, the main reason for the slow down stemmed from immense government controls, bureaucracy, and subsequent corruption. Coupled with the economic problems were suspect healthcare policies, such as forced-sterilization of the poor to meet the challenges of population growth. Such policies left India falling far behind its East Asian neighbors.
Attracted by the higher standards of living and relative economic freedom, Indian professionals immigrated to countries like the United Kingdom and the United States. At the same time, the U.K. and the U.S. were experiencing shortages in certain fieldsâmost noticeably the medical professionâand extended working visas to attract such talent. Therefore, a good percentage of Indians who immigrated to the U.K. and U.S. for study or work were medical doctors. Still, there were many other professional groups represented including economists, engineers, and entrepreneurs. During the 1970’s Indian engineers became an increasing portion of this immigrant pool.32 Overall, from the mid-1960’s-1980’s, 23.4% of the graduates from Indian Institutes of Technology emigrated.33 Eventually, when the U.K. and U.S. were no longer experiencing shortages, visas were reduced or terminated. By this time, thousands of professional Indians had immigrated to those countries.
Many professional Indian immigrants excelled in the medical, business, and industrial sectors; specific sectors in which India had deficits of competent professionals. “Indians owned 46% of the budget-motel rooms in the United States and were responsible for much of the retail trade in Britain. They had also built large industrial and commercial firms overseas.”34 Eventually, people in India began to take notice. The experiences of nonresident Indians (NRI’s), indicated to policy makers that economic stagnation was not due to cultural values, but it was the result of an economic system not suitable for growth. This coupled with the end of the cold war led to a significant revision of how business was done in India post 1991.
Yet, one cannot help but wonder: If nonresident Indians had stayed, would life in India be different? Would their ambitions and abilities have been realized much sooner than the 1980’s or would they be as helpless as their resident brethren? Although these questions cannot be answered in the context of this paper one can use the recent involvement of Indians in the U.S. software industry to understand what is lost when capable professionals emigrate and how countries experiencing this process can regain at least some benefits (if any) from this trend.
Immigration and the U.S. Software Industry
The immigration of professional Indians to the U.S. is loosely associated with the H-1B visas. The number of H-1B applicants per year has increased by a multiple of 8, from 47,000 to 384,191 by the end of 2001, and the number of H-1B Indian recipients for technology related sectors is a substantial percentage of the increase (Table 1). The most important motivation for immigration has been India’s inability to absorb the graduating info-tech professionals. If these graduates stay at home, they face heavy competition for low-tech jobs that underutilize their skills. With 50% of young Indians planning to study computer related fields35 many have chosen to work abroad. The INS addressed the professional Indian immigration pattern over the last 10 years as follows:
India’s explosive economic growth in certain sectors, especially the computer industry, sparked an ever-rising demand for employment-related non-immigrant visas, as the Indian computer sector developed a link with its U.S. counterpart. Although such visas do not bestow U.S. permanent residence on the bearer, in practice, such visa holders subsequently adjust to U.S. permanent residence and eventually become U.S. citizens. Large numbers of Indian students who come to the U.S. for university education also eventually adjust to U.S. permanent resident status… thus maintaining immigration from India at significant levels.36
As result of the trends noted above, the U.S. Indian population increased 106% in 10 years to 1.7 million.37 To truly understand the impact of professional migration on India, one must examine the characteristics of recent H-1B recipients.38
Figure 2:
Table 1 shows a minimal breakdown of approved petitions. Although adequate data is not available for the years 1997 and 1998, the events in the high tech sector during this time may have affected immigration patterns of our focus group. 1997 and 1998 were the boom years for America’s information technology. Concurrently there was a shortage of American professionals for computer related jobs. Qualified applicants were needed and Indians were more than qualified. Their institutes were world renown for their rigor, graduated an impressive amount of students each year, and many graduates were currently active in the sector. Therefore, Indians were hired for these jobs and paid substantially less than their American counterparts.
Looking in depth at the year 2001, the numbers of initial and continuing Indian immigrants are very significant.
- 161,561 Indian applicants
- 56% of initial applicants, 44% of continuing applicants
- Characteristics: median age of 28, income of $55,000, 99% with Bachelor’s and 35% with Master’s degree
- 85% in computer related field
- 191,397 computer related field applicants
- 58% of the initial and 43% on the continuing applicants
- 71% were Indian
Indian immigrants in computer related industries made up enough of the H-1B recipient pool such that the INS listed common characteristics of beneficiaries as follows:
The typical H-1B beneficiary whose petition was approved in fiscal year 2001 had the following characteristics: born in India; 29 years old; holding a bachelor’s degree; working in a computer-related occupation; and receiving annual compensation of $55,000. Forty-one percent of all beneficiaries were born in India, had a bachelor’s degree or master’s degree, and were employed in a computer related occupation.
The high-tech boom in the 1990’s also attracted tech-oriented Indian immigrants from the East Coast of the U.S. to the Silicon Valley. With strong educational backgrounds from one of the Indian Institutes of Technology (IIT’s) and (frequently) graduate studies and work in the U.S., these employees made an impact. Although originally recruited for “behind-the-scenes” operations, a growing number of these immigrants began to demonstrate their entrepreneurial character during the 1990’s, especially in software sectors of Silicon Valley. Many formed an expanding network of information technology professionals like The Indus Entrepreneur, which hires, nurtures and invests in each other.42
The success of nonresident Indians in high-tech industries became an impetus for the Indian government’s investment in information technology sectors. Indian Institutes of Technology and secondary schools have been encouraged to promote technology skills. The software development industry has also been given a market friendly environment with relevant policies and telecom infrastructure to succeed.43 As a result, software export has increased from 2.37% in 1995–96 to 14.13% in 2000–01 of India’s total export.44 The expectation is that with improved infrastructure, more products will be made for increasing domestic demand.
Another effect of nonresident Indians’ success in the U.S. was an increase of non-remittance economic connections with resident counterparts. These contributions have come via the sharing of knowledge and expertise between nonresident and resident Indians. Yet, a small number of NRI‘s are returning home to take advantage of beneficial government policies towards their sector.45 These policies include developing universities and foundations (via the Department of Information Technology), expanding infrastructure and providing a generous business environment.
Many nonresident Indians are linking American capitalists to investment opportunities in India. With their cultural knowledge, NRI professionals are able to make networks that bridge the continents, exposing resident businesses to international trade and market opportunities. In addition, with the success of IIT graduates, many large U.S. corporations have begun operations in India while supporting local universities. Increases in trade and investment from these activities have been positive. However, the most positive aspect of nonresident Indians’ success is the restored confidence of India itself. She is now more aware that it is possible for her people to excel if given the right environment.
However, many professional resident Indians still find it difficult to excel at home. India is many years behind her East Asian counterparts in infrastructure (e.g. internet access) and foreign direct investment, receiving only $2.1 billion in 2000.46 India’s growth does not include all geographical and social stratums. The information technology sector is concentrated in approximately 14 cities, with Bangalore at the lead. Also, relatedemployment opportunities are available to relatively few Indians (only 3% of Indians attend college47). In addition, domestic/multi-national companies take advantage of the region’s lower wages and gear most of the products towards export. Consequently, Indians still are the majority of H-1B visas distributed, causing a substantial increase in Indian immigrants living in the US.
In conclusion, the rise in professional emigration has severe implications for India since a good percentage of the IIT graduates are finding jobs abroad. India therefore educates (through affordable subsidized universities) and loses its most qualified professionals in technology related fields, the same fields that India has chosen to endorse. This may be a classic case of brain drain, but like other South and East Asian countries India is testing these assumptions and trying to reverse these trends.
Brain Circulation
The loss of human capital is a symptom, not the cause, of a problematic system. The key is why professionals leave. For India, the lack of adequate institutions and employment leaves little opportunity for many. India does not have the resources to build and maintain the infrastructure needed for emigrating professionals to work in India. However, nations also have to develop incentives for emigrants to return and “give back” through capital and expertise what they obtained from their countries, and India has begun to do just that.
Although there are a good percentage of Indians with expertise in the software industry living abroad, lately India has been able to excel in this area due to its over saturation of software related human capital.48 Although emigrated professionals in technology related fields did not start the Indian software industry, many have returned because of changes in government policies. Therefore, brain drain has been turned into “brain circulation” which happens when immigrants “study and work abroad for a certain amount of time and then return or commute between their homeland” and naturalized country. The assumption is that these professionals’ acquired knowledge and experience will be shared; benefiting the local communities.49
However, the government could still do more. Compared to other South Asians, very few Indians are heavily investing in their home economy and even fewer are returning as entrepreneurs.50In addition, India is still lacking the infrastructure needed for an emergent information technology industry and maintains a complex bureaucratic system that is difficult to maneuver.51 Although expatriates play an important part in India’s growth, it is “largely at arm’s-length, connecting ⦠firms with India’s low-cost, high-quality talents.”52 The focus of the government (and NRI‘s) on attracting foreign investors instead of upgrading India’s industry proficiency has led to domestic industries that are based on low wages (i.e. low standards of living) and unreceptive to entrepreneurs, leaving India with a restricted niche of low value segments of production and no substantial leverage.53
Conclusion
Sustainable development requires an investment in human capital. Although human capital takes at least eight years to mature and requires constant support, its returns are fundamental for improvement. Investment in human capital has proven successful in many developing nations including Malaysia, South Korea, and Thailand. Unlike increases in GDP, increases in the quality of human capital show the extent to which development has reached the population. Investment in education that caters to the immediate needs of industryâboth foreign and domesticâis essential. The educational system should also maintain the long-term goal of self-reliance, promoting programs that create thinkers and entrepreneurs.
As shown in the case of India, investing in human capital is only half of the story. Governments must also make efforts to retain their human capital. Infrastructure must be built to ensure adequate working environments for acquired skills and transparency instilled to attract investments and corporations. These efforts are also needed to facilitate the idea of “brain circulation”, when qualified expatriates return to invest or work domestically.
Developing nations experiencing loss of human capital must promote a sharing of ideas between residents and nonresidents through:
- Facilitating networking and communication between expatriates and residents
- Encouraging maintenance of professional connections with peers in similar domestic industries for sharing of expertise
Most importantly, developing nations should avoid the trap of “picking winners.” India chose a specific industry to groom. However, results have been regionally limited and available to a privileged few. For development to bring tangible improvements in society, it must incorporate a larger segment of the society. Therefore, a conscious effort should be made to:
- Promote entrepreneurship at all professional levels
- Encourage and support domestic businesses
Last but not least, foreign investors are essential in the current international economic system. For a developing nation to attract stable investors, it must maintain an educated population, infrastructure and potential for growth. An investment in human capital is the best way to accomplish all three.
1 Mehmet, Ozay. Westernizing the Third World: The Eurocentricity of Economic Development, Second Edition. Routledge. April, 1999. Page 121.
3 Sachs, Wolfgang, Editor. The Development Dictionary: A Guide to Knowledge as Power. St. Martin’s Press. April, 1992.
4 Ibid.
5 Mehmet, Ozay. Westernizing the Third World: The Eurocentricity of Economic Development, Second Edition. Routledge. April, 1999. Page 33.
6 Todaro, Michael P. Economic Development in the Third World. Longman Publishing Group. January, 1985. Page 68.
6 Ibid.
8 Daniel Yergin, Daniel and Stanislaw , Joseph. The Commanding Heights-The Battle for the World Economy. Simon and Schuster. April, 2002. Page 59.
9 “Human Development and Economic Growth”. France Stewart. http://hdr.undp.org/docs/training/oxford/presentations/Stewart_HD%20and%20EG.pdf
10 Mehmet, Ozay. Westernizing the Third World: The Eurocentricity of Economic Development, Second Edition. Routledge. April, 1999. Page 122.
11 Austerity Measures – (1) devaluation of the domestic currency, (2) cuts in public expenditures, (3) increase of taxes, (4) increase of interest rates and (5) trade liberalization
12 BBC World News – http://news.bbc.co.uk/1/hi/world/africa/3082316.stm
13 Ibid.
14 BBC World News – Brazilian Foreign Minister Celso Amorim. http://news.bbc.co.uk/1/hi/world/africa/3082316.stm
15 Mehmet, Ozay. Westernizing the Third World: The Eurocentricity of Economic Development, Second Edition. Routledge. April, 1999. Page 137.
16 Piachaud, David. Capital and the Determinants of Poverty and Social Exclusion. Center for Analysis of Social exclusion, London School of Economics. September, 2002.
19 Mehmet, Ozay. Westernizing the Third World: The Eurocentricity of Economic Development, Second Edition. Routledge. April, 1999. Page 137
20 Piachaud, David. Capital and the Determinants of Poverty and Social Exclusion. Center for Analysis of Social exclusion, London School of Economics. September, 2002.
21 Mehmet, Ozay. Westernizing the Third World: The Eurocentricity of Economic Development, Second Edition. Routledge. April, 1999. Page 138.
22 Ibid.
23 Role of Human Capital in Economic Development: Some Myths and Realities. Least Developed Series, No. 6. Development Research and Policy Analysis Division, ESCAP. United Nations Publications, 2001.
24 Ibid.
25 Role of Human Capital in Economic Development: Some Myths and Realities. Least Developed Series, No. 6. Development Research and Policy Analysis Division, ESCAP. United Nations Publications, 2001.
26 Rosa Gomez Dierks. Introduction to Globalization – Political and Economic Perspectives for the New Century. Page 121.
27 Ibid, Page 128.
28 Mehmet, Ozay. Westernizing the Third World: The Eurocentricity of Economic Development, Second Edition. Routledge. April, 1999. Page 139.
29 Saxenian, Anna Lee. Silicon Valley’s New Immigrant Entrepreneurs. Public Policy Institute of California, 1999.
30 As defined by the Immigration and Naturalization Service (INS), an H-1B visa is allotted to temporary workers “as an alien to the United States to perform services in specialty occupations based on professional education, skills, and/or equivalent experience”. After six years, the recipient can apply for a change of status (usually to a permanent resident).
31 Commanding Heights – India, http://www.pbs.org/wgbh/commandingheights/lo/countries/in.html
32 The Indians of Silicon Valley, by Melanie Warner. Fortune, May 2000.
33 Government of India, Department of Educationhttp://www.education.nic.in/htmlweb/iamr5.htm#ta47
34 Yergin, Daniel and Stanislaw , Joseph. The Commanding Heights-The Battle for the World Economy. Simon and Schuster. April, 2002. Page 220.
35 Stylusinc.com, http://stylusinc.com/internet_potential_india.htm
36 The Triennial Comprehensive Report on Immigration. Immigration and Naturalization Service. 2001.
37 Indians fuel Asian population growth by Cecilia King. Mercury News. March 7, 2002.
38 Please note that for the rest of the paper, computer related occupations would be the primary focus.
39 Note: percentages are based on petitions where these facts were listed, which is 99% of total petitions.
40 Represents the fiscal year. For example, Fiscal 2001 is October 2000 – September 2001.
41 Figures regarding occupation are estimates based on surveys. Also, computer related here includes “systems analysis and programming.”
42 Saxenian, Anna Lee. Silicon Valley’s New Immigrant Entrepreneurs. Public Policy Institute of California, 1999.
43 Businessweek.com, http://www.businessweek.com/adsections/indian/infotech/2001/silicon.html
44 Ibid.
45 Saxenian, AnnaLee. Silicon Valley’s New Immigrant Entrepreneurs. Public Policy Institute of California, 1999.
46 Yergin, Daniel and Stanislaw , Joseph. The Commanding Heights-The Battle for the World Economy. Simon and Schuster. April, 2002. Page 229.
47 Caste and Campus: India’s Ivy is Overwhelmed by Barry Bearak. Allahabad Journal. December 21, 1998. http://pages.nyu.edu/fmh1/classes/sociology_of_higher_ed/caste.HTM
48 Funding has been geared towards tech related courses and majors at Indian universities.
49 “Brain Drain or Brain Circulation? The Silicon Valley-Asia Connection.” AnnaLee Saxenian. Modern Asia Series, Harvard University Asia Center. September, 2000
50 This may be primarily due to the fact that Indians who immigrated during the 1970’s and 80’s were not entrepreneurs but scholars and less likely to pursue unpredictable investments with their money.
51 Saxenian, AnnaLee. Silicon Valley’s New Immigrant Entrepreneurs. Public Policy Institute of California, 1999.
52 Ibid.
53 Ibid.
Bibliography
Books
Mehmet, Ozay. Westernizing the Third World: The Eurocentricity of Economic Development, Second Edition. Routledge. April, 1999.
Sachs, Wolfgang, Editor. The Development Dictionary: A Guide to Knowledge as Power. St. Martin’s Press. April, 1992.
Todaro, Michael P. Economic Development in the Third World. Longman Publishing Group. January, 1985.
Yergin, Daniel and Stanislaw, Joseph. The Commanding Heights-The Battle for the World Economy. Simon and Schuster. April, 2002
Dierks, Rosa Gomez. Introduction to Globalization – Political and Economic Perspectives for the New Century. Burnham Inc. 2001.
Papers/Reports
Piachaud, David. Capital and the Determinants of Poverty and Social Exclusion. Center for Analysis of Social exclusion, London School of Economics. September, 2002.
Saxenian, AnnaLee. Silicon Valley’s New Immigrant Entrepreneurs. Public Policy Institute of California, 1999.
Role of Human Capital in Economic Development: Some Myths and Realities. Least Developed Series, No. 6. – Development Research and Policy Analysis Division, ESCAP. United Nations Publications, 2001.
The Triennial Comprehensive Report on Immigration. Immigration and Naturalization Service. 2001.Presentations“Human Development and Economic Growth”.
France Stewart. http://hdr.undp.org/docs/training/oxford/presentations/Stewart_HD%20and%20EG.pdf“Brain Drain or Brain Circulation? The Silicon Valley-Asia Connection”.
AnnaLee Saxenian. Modern Asia Series, Harvard University Asia Center. September, 2000
Articles
The Indians of Silicon Valley, by Melanie Warner. Fortune, May 2000.
Indians fuel Asian population growth by Cecilia King. Mercury News.March 7, 2002.
Caste and Campus: India’s Ivy is Overwhelmed by Barry Bearak. Allahabad Journal. December 21, 1998. http://pages.nyu.edu/fmh1/classes/sociology_of_higher_ed/caste.HTM
Web sites
Businessweek.com, http://www.businessweek.com/adsections/indian/infotech/2001/silicon.html
BBC World News, http://news.bbc.co.uk/1/hi/world/africa/3082316.stm
BBC World News – Brazilian Foreign Minister Celso Amorim. http://news.bbc.co.uk/1/hi/world/africa/3082316.stm
Commanding Heights – India, http://www.pbs.org/wgbh/commandingheights/lo/countries/in.html
Government of India, Department of Education, http://www.education.nic.in/htmlweb/iamr5.htm#ta47
Stylusinc.com, http://stylusinc.com/internet_potential_india.htm