May 27, 2014

Policymakers Take Heed: Your Visiting Professional Isn't the Key to Spreading American Business Practices Overseas


NEW YORK—As the United States Department of Homeland Security proposes new rules to attract and retain foreign skilled workers, a new Columbia Business School study simultaneously reveals foreign policymakers are increasingly becoming challenged with keeping their potential innovators and job creators from immigrating to the US.

Every year, hundreds of thousands of skilled workers enter the US on J1 and H1–B visas. They observe American business practices in action at companies like Google, Merrill Lynch, and Hewlett–Packard and then return home to share what they’ve learned with foreign employers. Or do they? The study, authored byDan J. Wang, assistant professor of management and sociology at Columbia Business School, and titled, “Activating brokerage: Inter–organizational knowledge transfer through skilled return migration,” says that much of the business knowledge acquired by visiting professionals in the US never crosses the border.

“You can’t expose an organization to new practices and expect these practices to stick. Our research shows that policymakers need to think about how to provide the right infrastructure for their returning professionals,” said Wang. “This knowledge transfer is critical to the sustainability, performance, and innovation of a foreign company's growth. Policymakers should consider the challenges faced by these return migrants; otherwise, there would be a windfall of skilled workers leaving to the US.”

The Research

Wang’s research is based on a survey of more than 3,000 former J1 visa holders from 81 countries, who worked in the US between 1997 and 2010, before returning to their home countries. Respondents all held positions ranging anywhere from three to 24 months with small to large–size companies.

The survey was designed to determine, first and foremost, whether these visiting professionals actually shared knowledge acquired in the US with business organizations in their home countries. And secondly, the survey asked those who had shared knowledge to elaborate on how this knowledge was used by home organizations. By studying both of these phases, Wang was able to more accurately pinpoint where most business knowledge is being lost.

Determining the weak points in the knowledge transfer process is only part of Wang's research. He also looked at why these weak points exist. To do this, Wang examined the challenges that returnees face, both when acquiring knowledge abroad and when trying to transfer that knowledge to their home organizations. 

The Results

The survey found that, in many cases, business knowledge acquired in the US never makes it across the border. Of the workers surveyed, nearly 32.5 percent said they hadn’t shared any knowledge learned abroad with employers in their home countries, leaving no opportunity for knowledge adoption.

But sometimes, the fault for failed knowledge transfer doesn’t lie with tight–lipped returnees, but with their home country organizations. Nearly 20 percent of respondents said they had shared business knowledge learned in the US with home organizations, but that this knowledge was never put into practice.

Less than half of those surveyed (48.3 percent) responded positively to both sharing knowledge learned abroad with their home organizations and having this knowledge adopted in the form of new or altered business practices.

“Some policymakers believe that rewarding skilled workers with monetary incentives is enough to keep them in their home countries, but the research shows this is simply not the case. Policymakers may want to begin to explore ways to successfully capture and transfer the knowledge from these returnees to their target organizations. There is a great need to fine–tune these policies now or lose those highly sought after workers.”

To learn more about cutting–edge research being performed by Columbia Business School faculty members, please visit www.gsb.columbia.edu.  

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About Columbia Business School

Columbia Business School is the only world–class, Ivy League business school that delivers a learning experience where academic excellence meets with real–time exposure to the pulse of global business. Led by Dean Glenn Hubbard, the School’s transformative curriculum bridges academic theory with unparalleled exposure to real–world business practice, equipping students with an entrepreneurial mindset that allows them to recognize, capture, and create opportunity in any business environment. The thought leadership of the School’s faculty and staff, combined with the accomplishments of its distinguished alumni and position in the center of global business, means that the School’s efforts have an immediate, measurable impact on the forces shaping business every day. To learn more about Columbia Business School’s position at the very center of business, please visit www.gsb.columbia.edu.

About Professor Dan Wang

Dan Wang’s research analyzes how social networks facilitate the transformation of knowledge across organizational and cultural boundaries.  His main project focuses on ‘reverse brain drain’, or how the return migration of skilled professionals catalyzes the flow of knowledge, practices, and technologies to different parts of the world. In another study, he uses large–scale data science methods to examine the viral spread of group identities in large online communities. Another examines the spread and innovation of protest tactics in activist networks formed in social movements.  Finally, he has also analyzed the sharing of investment strategies and leakage of information in venture capital syndicate networks in the US and China.  His work has been published in Administrative Science Quarterly, American Journal of Sociology, Social Networks, and Theory and Society. His research has also been recognized with awards from the Kauffman Foundation and the Academy of Management.