Flight Capital: The Alarming Exodus of America's Best and Brightest 0 Edition

My old boss and mentor Walter Wriston of Citicorp often said that capital (financial and human) always goes where it's welcomed and stays where it's well-treated. For years, the U.S. was unequalled in attracting foreign-born superstars, from Alfred Hitchcock to Albert Einstein.

Like many Americans, I believed that the U.S. is THE Promised Land--so powerful, its allure so magnetic, that it remains the unchallenged destination for anyone seeking a better life. But beginning about a decade ago, from my outpost in Hawaii, I began to see more and more new Americans boomeranging back to their native countries. By my estimates, every day, roughly 500 to 1,000 foreign-born Americans are going home--many of them in leading-edge professions--the kind of immigrant brainpower that gives rise to the likes of Google, Yahoo, and eBay and propels today's innovative economy.

Where are they going? And why? And what does this "reverse brain drain" mean for America's future? To answer these questions, I spent five years crisscrossing the globe to eight countries on three continents. From Iceland to India, I sat down for one-on-one interviews with more than 100 top-flight repatriates along with dozens of foreign-based government and business leaders who are spearheading some bold initiatives to lure talent away from the U.S.

Each of the repatriates' personal stories is uniquely their own. What they share is a desire to use their American-earned experiences to benefit their homeland. The bottom line for the U.S., I discovered: A wrenching talent gap, as America moves from top importer of innovators to net exporter of human capital.

What to do? The answers, I found, do not require a dramatic reversal of America's present course. They do call for a series of innovative reforms--from revamping immigration policies to overhauling public education--that U.S. leaders from govenment, business, and academia must wake up to before it's too late.

For centuries, the brain drain has worked in our favor. The United States has always attracted talented immigrants who created wealth and intellectual capital for their adopted nation. Today, more than half the Ph.D.s working here are foreign born; so are nearly half the physicists, computer scientists, and mathematicians. Immigrant brainpower has never shone brighter. There's just one problem: Now it's going home.

FLIGHT CAPITAL is the first comprehensive study of why the best and brightest in America are leaving, and what it means for the future. Analyzing the global battle for top talent, David Heenan finds that, from Iceland to India, countries are pursuing bold initiatives to lure knowledge workers away from the United States. And post-9/11 immigration restrictions have seriously affected our ability to replace them.

Heenan brings the issue to life with the personal stories of highly successful professionals who have left the United States for their native lands of China, Singapore, Ireland, Israel, Taiwan, and Mexico, among others. He skillfully explores the diverse factors--including economic opportunity, cultural values, technological globalization, and 9/11 fallout--that are converging to send the brain drain spiraling into reverse.

If this exodus continues, America's technological and scientific preeminence and its economic strength will be in jeopardy. We have two choices: cultivate homegrown talent or staunch the flow. Heenan identifies a dozen actions the United States can take to meet both challenges. Timely and compelling, FLIGHT CAPITAL is a wake-up call for everyone who cares about America's future place within the global community.

How Can We Stop America's Brain Drain?

Forget terrorism and weapons of mass destruction, says David Heenan. The next global war will be fought over human capital. After centuries of importing brainpower, the United States is now a net exporter. As other countries woo their U.S.-educated and -trained stars back home, U.S. economic power and technological preeminence are diminishing--along with the nation's security. FLIGHT CAPITAL is the first book to personalize the issue, presenting the stories of dozens of top professionals who have left the United States for their homelands, from Singapore to Mexico, Ireland to Israel. Heenan identifies actions and policy changes that offer hope--if we move quickly.

"Brilliantly original and perilously timely. Every American who cares about our future, especially government and business leaders, should have it on their 'must read' list." Warren Bennis, University Professor, University of Southern California; author, "On Becoming a Leader" and "Co-Leaders" (with Heenan)

"An insightful and urgent call to action. FLIGHT CAPITAL definitely got my attention." U.S. senator Daniel K. Inouye

"An engaging and thought-provoking book. Heenan's stories create a sense of urgency about America's brain drain and present well-considered strategies for safeguarding our top talent." Steve Case, chairman, Exclusive Resorts; cofounder, America Online (AOL)

"A cogent treatment of a very important topic." Shirley Ann Jackson, president, Rensselaer Polytechnic Institute; chairman, American Association for the Advancement of Science

"Heenan's persuasive arguments for safeguarding America's best and brightest make FLIGHT CAPITAL both timely and a great read." Brent Scowcroft, former national security advisor; coauthor, "A World Transformed"

David Heenan, a former senior executive with Citigroup and Jardine Matheson, is a trustee for the Estate of James Campbell, one of the nation's largest landowners. He has taught at the Wharton School, the Columbia Graduate School of Business, and the University of Hawaii. His articles have appeared in such leading publications as the Harvard Business Review, the New York Times, the Wall Street Journal, and the Christian Science Monitor. Heenan is author or coauthor of five other books, including "Co-Leaders" and "Double Lives."

PREFACE

For centuries, immigration was America's secret weapon, "one of the defining strengths of our country," declared President George W. Bush. Legions of newcomers from all over the world became a major force in American Exceptionalism. Undergirding the country's ascendancy was the belief that the United States was so powerful, its allure so magnetic, that it would remain the unquestioned destination of those seeking a better life. Simply put, coming to American meant staying in America. Not so today.

In the current rough-and-tumble world of international talent grabbing, immigrants of all stripes are discovering that there is no place like home. Thousands of New Americans have begun boomeranging back to their native countries. What's more, although the exodus is taking place across a wide spectrum, it is especially strong in leading-edge professions in science, technology, and business--the "high-end" sectors so much in demand in today's Innovation Economy.

The flight of any country's brightest minds is a sure sign that that country is in serious trouble. Left unchecked, it can erode a nation's competitive edge and, ultimately, its standard of living. Therefore, the reverse brain drain could send the United States "back to the Dark Ages" warns Craig Barrett, chairman of Intel, the giant semiconductor firm. To make matters worse, America's traditional source of imported capital is beginning to shrivel up exactly when its stock of homegrown brainpower is shrinking. As a result, the country faces the perfect storm: a wrenching talent gap--a situation that is unsustainable.

"To produce a might book, you must choose a mighty theme," wrote Herman Melville. Is there any theme mightier than safeguarding a nation's precious human capital? Clearly, the United States must hang on to its best minds, while continuing to serve as a beacon to highly skilled immigrants. But how?

To better understand the flight capital phenomenon, I crisscrossed the globe, interviewing repatriates in eight countries: Ireland, Iceland, Israel, India, China, Taiwan, Singapore, and Mexico. As you will see, the stories they told are as different as chalk and cheese. However, they all offer important insights into how other nations are rolling out the red carpet for accomplished Americans.

In my travels, I found that the exodus extends far beyond the swelling ranks of gifted emigrants. When highly sought-after professionals return home, they take their family members--particularly, their high-achieving children--with them. Obviously, that is America's loss. In addition, prospective immigrants to the United States, observing the return of their emigrant neighbors, are much more reluctant to leave the nest and venture overseas. Another missed opportunity. Finally, more and more native-born Americans are becoming geographically adventurous, heeding the call to pursue the American Dream on foreign soil.

A few notes of caution. First, I discovered that getting an accurate assessment of this emerging trend is almost impossible. Smoke-and-mirror statistics abound, as very few countries monitor the quantity and quality of their returnees. Ireland and Israel are the exceptions, using this information as marketing fodder to lure more wanderers home. The number of Americans seeking greener pastures is equally elusive. Many acquire dual citizenship or revalidate their "green cards," although their allegiance is no longer to the Red, Whie, and Blue. In addition, since a large number of repats drafted off a spouse or dependent passport while in the United States, they don't appear in the official rolls of the departed. Then, there is the growing pool of "virtual Americans"--those in almost perpetual transit, who prefer a truly multinational lifestyle. They, too, fly below the radar. Yet, despite the absence of reliable statistics, there is a litany of anecdotal evidence to support the growing force of out-migration.

Second, FLIGHT CAPITAL focuses on diagnosing the problem and analyzing the prospects of retaining America's best minds. By understanding more fully the present dilemma, better solutions--it is hoped--will emerge. Of course, any action agenda adopted by the United States will prompt a series of repsonses from other nations. These, in turn, will trigger an American counterresponse, and so on. To speculate how this sequence of parries and thrusts will evolve is beyond the scope of this book.

As a final caveat, readers will appreciate that any serious effort to stop the reverse brain drain is not a cure-all for the nation's burgeoning talent deficit. Retaining imported brainpower is only half the solution; the other half is upgrading the quantity and quality of our native-born workforce. Therefore, the United States must place equal attention on such thorny problems as reforming public education, upgrading universities, and stimulating science and technology.

American cannot afford to equivocate. History offers many examples of great countries that come to a catastrophic end because of their unwillingness to respond to change. Nothing short of stopping the present threat will safeguard America's talent base and shape the kind of society in which our children and their children will prosper. The time to act is now.