Brain drain costs Asia billions

India's IT sector is booming amidst poverty

Asia is facing a huge brain drain of highly skilled professionals to well-paid jobs in developed countries, according to a new United Nations report.

The report, prepared by the United Nations Development Programme (UNDP) estimates that India loses $2bn a year because of the emigration of computer experts to the United States.

Indian nationality for a software programme sends a signal of quality just as a 'made in Japan' label signals first-class consumer electronics

UNDP report

The Indian IT Minister, Pramod Mahajan, said: "A poor country like India is subsidising the US education system and economy."

But the report also said that "diasporas", such as Indian computer professionals in Silicon Valley in the US, can enhance their country's reputation, making "Indian" a byword for excellence in computing.

Skilled professionals

The Human Development report estimates that about 100,000 Indians a year are expected to take advantage of work visas issued by the US.

"Indian institutes train people at a very small cost and then we end up losing highly qualified professionals to the US where education is expensive," said IT Minister Pramod Mahajan.

Indian programmers are in global demand

The average total cost to India of educating skilled professionals is between $15,000 and $20,000.

But the exodus of professionals can have a positive side, according to the UN.

"The success of the Indian diaspora in Silicon Valley...appears to be influencing how the world views India, by creating a sort of 'branding'," the report said.

"Indian nationality for a software programmer sends a signal of quality just as a 'made in Japan' label signals first-class consumer electronics."

Technology hubs

And although professionals will always migrate towards high-wage countries, the UN identifies a number of world-class technological hubs which have emerged to challenge Silicon Valley and other centres in Europe and Japan.

The prime example is Bangalore in India, but other centres include Kuala Lumpur in Malaysia, Campinas in Brazil, Gauteng in South Africa and El Ghazala in Tunisia.

India's software industry

180,000 employed in 1998

Projected to 2.2m in 2008

73,000 IT graduates a year

Source: UNDP

"When countries create the right conditions , including openness to new investment and new ideas, they can recapture some of what they have lost. The Indians in Silicon Valley are an important part of Bangalore's success."

The challenge for developing countries, the UN says, is to come up with strategies to keep some professionals at home and encourage others to return.

This might include a flat "exit" tax to be paid by the employee or company when a working visa is granted.

Another alternative could be a loan system where each student in tertiary education is given a loan which must be repaid if they leave the country.