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The Establishment

The EU funds initiatives for mitigating the damages caused by freedom of movement, and making things worse

Free movement is one of these Euro quirks that popped up out of the unshakable fear that were it not to be implemented, the whole continent would sooner or later hurl itself into throes of death and destruction unseen since the early 40’s. In order to prevent it, the evil past and shaky current status quo had to be superseded through the creation of a “European identity”. And what better way to achieve this lofty goal than by erasing borders and allow citizens from state members to travel and settle wherever they please? Or so the story goes, because as we’re going to see, there may be more than meet the eyes to it.

Nowadays, the notion of Freedom of movement is so embedded fabric of the EU that one of its officials channels calls it “the cornerstone of Union citizenship”, and reminds us that despite the progress achieved by the phasing-out of internal borders, courtesy of the Schengen agreements, some hurdles remain, and they will not be tolerated ad infinitum. The way the concept is lauded, at times being tagged a human right by its staunchest proponents, should make one think twice before expressing any reservation to it. What’s not to like, anyway? If there were any downside to it, should any fraction of the continent’s population end up negatively impacted, surely, the EU would drop a disclaimer when touting it to the general public. Well, turns out there is, and somehow, they don’t.

“Sending regions have an average GDP per capita that is 64% of the EU28 average, whilst receiving regions have an average GDP per capita that is 108% of the EU28 average.”

In 2018, the EU’s Commission for Social Policy, Education, Employment, Research and Culture (CSPEERC) published a 93-page report titled “Addressing brain drain: The local and regional dimension”. For those not familiar with the term, “brain drain” was coined by British researchers to describe the loss of skilled workers and scientists from post-war Europe to North America. Since then, research has evolved to study the implication of this type of migration on an international level, courtesy of globalization. Various schools of thought have emerged over time, from seeing brain drain as mostly negative, to mostly positive, and something in between. Proponents of the brain drain as a force for good argue among other things it favours the training of students from countries with fewer opportunities, to which they will bring new knowledge upon their return home, or that it helps the economy of developing countries through remittances sent back to them by their nationals having moved abroad; points, which too, have faced criticism.

What can be naturally inferred for starters is brain drain is a unilateral phenomenon. Some regions or countries will be recipients of skilled individuals to the detriment of those sending them.

When it comes to Europe, the above-mentioned report found that the biggest winners in the brain trade were Germany, the UK and Northern areas of the EU (Sweden, Ireland, Estonia, Denmark), while Romania, Poland, Italy, and Portugal competed for the shortest end of the stick. Within countries, “sending regions appear to be located in most of Portugal and Greece, in Spain, the north-eastern parts of France, the northern parts of Finland and Ireland, the Baltic States and in several parts of Eastern Europe, as well as in Cyprus”. The case of Finland landing in both groups highlights that population redistribution sometimes occurs on a national level. Another textbook example is rural areas losing out to their urban counterparts.

One of the main factors driving this flux being the appeal of a higher socio-economic environment, source countries which were already facing headwinds in this domain end up shedding the segments of their population most likely to correct their predicament. In its report, the CSPEERC analyzed 30 different initiatives intended to counter these mishaps. What did it find?

“The project found that over a 10-year period (2004-2014) 28 regions (8%) switched from ‘sending’ to ‘receiving’ and 60 regions (17%) switched from ‘receiving’ to ‘sending’ (Samek Lodovici, 2018). On a positive note, this demonstrates that a region’s sending/receiving status can be viewed as dynamic. However, it is evident that an increasing number of regions are facing problems related to out-migration.”

The report divides the projects reviewed into two groups based on the type of region it affects. (Type 1 – sending, Type 2 – receiving), and indicates if they aim to mitigate brain drain and/or create brain gain. We’ll switch to another grouping more pertinent in the assessment of the global impact of outmigration.

Grade F: creates destructive brain drain.

Grade C: Mitigates the consequence of brain drain in a zero-sum game.

Grade A: Mitigates the consequence of brain drain neutrally.

The distinction matters in that while all type 1 region focus on fostering/assisting local talent, those in Grade C also attempt to attract some from abroad, incidentally passing the bucket elsewhere. Countries aiming for brain gain are found in Grade A when the project targets natives who had left their homeland.

It may sound counter-intuitive in a report titled “Addressing brain drain”, but one indeed learns that over 40% of the projects featured are solely intended to poach Highly qualify workers and students from abroad (Grade F). Those with mixed impact (Grade C) make up 17% of the total, which leaves 43% (Grade A) truly fitting the bill. Here’s the composition of each group with the number of regions/cities for each country when need be.

Grade F Grade C Grade A
Germany
Spain (2)
Finland (2)
Italy
Holland (2)
Sweden
Belgium
Czech Republic
Denmark
Scotland
Slovakia
Romania
Bulgaria
Estonia
Austria (2)
Cyprus
France
Romania
Greece
Hungary
Italy
Slovenia
Macedonia
Cross-Country (3)

Grade A and C initiatives (correcting brain drain with a domestic pool) are logically located in sending countries. The surprising takeaway from those in Grade F (creating brain gain from an international pool) is that several hosting regions, located in Germany, Holland, Sweden, Denmark and to some extent Spain are already faring very well in comparison to the rest of Europe. In a case like Denmark, it does not even encounter any noticeable shortage:

Internationally competitive regions like Greater Copenhagen have to maintain their success over time. In addition, ranking high for regional attractiveness at international level does not necessarily mean ranking
high in terms of regional performance. This is why the region wishes to remain one step ahead of its ‘competitors’ by developing brand-new strategies aimed at providing international talents and their families with
better and more services and facilities.

The same context applies to Holland:

According to the Brainport Monitor 2017, the region hosts 4% of the Dutch inhabitants, 22% of the national private R&D, 46% of the country’s patents, and 9% of the country’s technology students. At the basis of the medium-term competitive strategy of Brainport, and in order to avoid having population ageing interrupt the innovative path followed by the region, there is the attraction and retention of international highly skilled workers and students.

The benefits for Grade F countries are actually threefold: a) they get the most brilliant foreign students and workers selected and trained at the expense of sending countries. b) These will contribute to their economy and yield high tax income. c) They will further lead to an increase of patents as well as start-ups, which will further secure already-advantaged countries’ stranglehold on innovation.

The latter is emphasized in the following case and adds a lopsided gait to the idea that students will create brain gain thanks to their knowledge acquired abroad when, or rather if, they return to their home country.

The Region of Lombardia gives high relevance to skilled human capital for its competitiveness. In the last ten years, it has contributed to the creation of 1,369 innovative start-ups and to the registration of 191,000 patents (Il Giornale website). Against this backdrop, in November 2016, the Regional Council adopted Regional Law ‘Lombardia is research and innovation’. (…). The law focuses on enhancing the cooperation between businesses which need innovation and the world of research which has the human capital necessary to
foster regional economic growth.

Similarly, In one of the Finland-based projects, the goal of retaining international students for the local job market is bluntly spelt out.

One has to read all the way to the conclusion to finally understand why all these brain drain-inducing initiatives (57% of the total), partly funded by the EU, were included in the research. In a confounding twist, its authors make two recommendations for keeping brain drain in check, about creating more of it: “R04. Stimulate the absorption of outside talent”. In which they advise the three approaches we’ve seen earlier: importing non-nationals, attempting to lure back those we emigrated, and a combination of both. and self-explanatory “R05. Mitigate/remove structural impediments/barriers to attracting international talents”. Not once did the EU analysts show any reservation about the inevitable repercussions for source countries, or the catalytic effect of their proposals. On the contrary, they stated: “Additional R&I capacity allows regions to become more competitive and may create important multiplier effects. For example, talent may generate new employment opportunities in the short and medium term.”.

Besides its wealth of data, the report offers a stark reality check of the usual vision of the European construction. Far from the joyful togetherness, the objectives of social justice and international fairness, it lays out we live in a world where economic interests prevail and individuals are seen as a commodity to fuel the machine. To the point that they’re lumped into what The Treaty of Rome calls the “Four Freedoms”, namely: the free movement of goods, services, capital, and persons. Surely, the concern for economic growth is as old as trade itself. What the removal of barriers between nations introduced however is the option for some to bypass organic, sustainable development for everyone. Some of the initiatives studied proved that this can still be achieved in this day and age by nurturing domestic potential.

Yet, at least in this report, a majority of regions went for the quick fix, which has for endgame to increase inequality as well-off countries dope up their economy with immigration, while those struggling, unwitting contributors in the state of affairs, are mired at a stage of arrested development, busy plugging the holes poked into their boats. Unless, they too set their sight on workers and students from other, and likely, even less flourishing countries. As suggested by the EU’s experts. And to further tip the scales to the wrong side, every economic upheaval turns out to be a boon for countries with higher GDP in this configuration, since they bruise less and recover faster. This happened with Germany which welcomed throngs of Spanish and Greek engineers in the aftermath of the 2008 crisis.

Some closing notes… Since we live in this era where little exists in higher spheres out of a tunnel vision directly pointed at The Economy, it’s no surprise that their analysis left out other problematic byproducts of outmigration. The most worrying being arguably the haemorrhage of health care workers, as undergone for instance by Romania in Europe. Apparently, the impact on the welfare of Romanians wasn’t worthy of consideration. Their focus was also mainly on intra-EU brain drain, aside from a couple of projects mentioning other sources. If you’re curious about how much worse developing countries have it, stay tuned for a comprehensive article on the topic.

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