The Impact of Migration on Innovation – A Note

Abstract

Migration can be traced from time immemorial and affects both the places people leave and the places they move into, and is a powerful driver of economic, political and social change. Actual migration is constrained by the individual or household capability, including the financial or social capital. Immigration provided a large supply of labor that was necessary for the take-off of industry and sustained modern economic growth during the early stages of industrial development. The economics of migration indicates that the host country needs immigrants. Migration as a process is a wonderful opportunity to achieve aspirations of progress and is a tool for development. Innovation is the primary source of competitive advantage, industrial change and economic growth. It requires hard, focused, purposeful work along with knowledge and ingenuity. Firms use different innovation strategies based on technological opportunities and characteristics of their sector. Knowledge management improves the creative abilities of any organization by ensuring the timely availability and accessibility of knowledge. Management of knowledge has a vital role in creating an internal working environment that supports creativity and fosters innovation. Organizational culture is one of the elements for management of knowledge. Immigration may boost innovation by the population size effect; the population density effect; the migrant share effect; the skill composition effect; and the migrant diversity effect. Globalization has increased sharply the mobility of highly skilled workers who are younger, more entrepreneurial and less risk-averse. When diverse people collaborate and share, innovation usually emerges. Migration enhances the diversity among economic agents and enhances their individual knowledge bases. Knowledge spillover caused by the interaction between skilled workers creates and spurs idea creation.