Unit 50 Knowledge Technology Transfer and Trade

Knowledge, Technology Transfer
and International Trade

MDI 005: Indian Diaspora: Politico-Economic and Policy Aspects
Block 2: Economic impacts of Diaspora
Unit 50: Knowledge, Technology Transfer and International Trade
Dr. SADANANDA SAHOO

SOITS, IGNOU
Learning Objectives
 Understanding Globalisation, diaspora

and knowledge society
 Diaspora and knowledge technology
transfer and international trade
Introduction
 Globalization, capitalism and World System
(Wallerstein)
 Knowledge Society
 Diaspora is human mobility as a result
of global capitalism
 Migration of Human carries memories,
skills, capital….diaspora creates a
brain chain
Diaspora Network and its impact
 Alumni Network
 Hometown Association
 Professional network (AAPI etc)
 Entrepreneurial Network
Emergence of Knowledge Society and
Technological Revolution
 No more Physical barrier
 IT revolution in 1990s
 Diaspora across the world that was once considered as
brain drain become an asset.
 1960 Jagdish Bhagwati suggested tax for brain drain
 Today’s world has changed
What is a knowledge society?
 A knowledge society generates, shares and makes available to all members
of the society knowledge that may be used to improve the human
condition.
 Knowledge is itself a capital. You can sell your knowledge directly.
knowledge is fundamental to the politics, economics, and culture of
modern society.
 Knowledge is a commodity to be traded for economic prosperity. In a
knowledge society, individuals, communities, and organizations produce
knowledge-intensive work.
 Peter Drucker coined the term knowledge worker in 1969 and viewed
Knowledge as a key economic resource. Tele medicine, Online teaching,
fishermen sharing ideas about fishing, farmers sharing ideas on youtube,
musicians collaborating online etc.
The Diaspora Network
 Knowledge and Technology transfer is a dynamic,

multi-faceted phenomenon
 Diaspora Network (Unit 13, MDI 002) has created
a brain chain/ brain network
Alumni Network, Professional Network, Hometown

Association etc.
Network-Knowledge Society
 Knowledge Driven Economy needs great

global network
 Diaspora facilitates knowledge Economy
Emergence of Knowledge Economy and
Investment on R&D
 Knowledge and innovation are vital for
economic growth and sustainability and are
primary determinants of long-term
improvements in the standard of living.
 Many advanced countries now invest more on
R&D and attract knowledge workers around
the globe.
R& D Spending Country-wise (2022) in USD
Billion Source: statista.com
Country wise R&D and demand for Global
knowledge worker
Source: UN (2020)
H1B Visa
 This nonimmigrant visa is available to people

who wish to perform services in a specialty
occupation, services of exceptional merit and
ability relating to a Department of Defense
(DOD) cooperative research and development
project, or services as a fashion model of
distinguished merit or ability.
H1B Visa
County Number (2021) Number (2020)
India 301,616 319,494
China 50,328 51,597
Canada 3,836 3,987
Global total 407,071 426,710

Indian Diaspora
 Trade diaspora of Pre-British Era to Central Asia,

West Africa, Southeast Asia (Very Small in no. No
Contact)
 Colonial Migration- Cooli (very large in number. Not
much in touch)
 Brain Drain type Migration in After Independence
(very small but increasing gradually)
 Unskilled and Semi-Skilled and (very large)
Source: Times of India, Nov 30, 2021,
Knowledge and Technology Transfer
 IT Sector
 Healthcare Sector
IT Sector
 Telecom Revolution (Sam Pitroda)

 Various IT companies as a result of
Silicon Valley impact in Bangalore,
Hyderabad and Gurugram
NRI start ups portal
 NRI Startup India is formed by a group of successful and professional NRIs to

bring together, inspire and empower a new generation of Leaders by creating
a unique ecosystem of opportunities and helping them to grow in the
international market. NRI Startup India provides a winning strategy for Indian
entrepreneurship and innovation that mobilizes and spearheads to the
forefront of India’s foremost talents and creative geniuses.
 NRI Startup India and its global network is the trusted partner of every
motivated innovator and entrepreneur in India and around the globe. We
implement end-to-end support that formulates and delivers game changing
ideas to market through thought leadership, role models, capital investment,
mentoring, prototyping labs, expertise and know-how that succeeds on a
global level.
Healthcare
 1990s returnee doctors as entrepreneurs
 Apollo Hospital (Pratap Reddy) in 1990s USA
 L. V. Prasad Eye Institute- Gullapalli Nageswara Rao
(Australia, USA)
 Abu Dhabi-headquartered VPS Healthcare, owned by NRI
billionaire Dr Shamsheer Vayali own Rockland hospital in Delhi
and also established hospitals in other countries using diaspora
network.
 Medanta- Naresh Trehan (USA)
Diaspora and Trade
 Diasporas’ influence on trade is largely due to

international human capital networks (Epstein & Heizler,
2016; Sangita, 2013)
 Diaspora as Intermediary or facilitator of business
 Diaspora as consumer (Emotional attachment with home
country products. Ethnic products-food, dress, culture etc.)
Indian Diaspora Trade
 West Asia
 Gujaratis in Africa- Zanzibar etc.
 Central Asia. The archives of Uzbekistan, this book surveys early modern
commercial relations between India and Central Asia and examines the
emergence, economic function, social organization, and decline of an
Indian merchant diaspora. This diaspora consisted of tens of thousands of
Indian merchant-moneylenders living in communities across Central Asia,
Afghanistan, Iran, the Caucasus and much of Russia. (Scott C. Levi: 2002)
 Contemporary Trade- IT, Cultural products Bollywood, Ethnic Products- Little
India, China town
Chinese Diaspora
Large proportion of Trade diaspora
Large Base in ASEAN countries that facilitates

the knowledge and technology transfer and trade
The Chinese Diaspora
 Bamboo Network- Supporting each other

 Quaopi- Originating in the 1820s and used for 150 years
thereafter, qiaopi is the name given in Chinese to letters
written home by Chinese emigrants to accompany
remittances. Their key function was to preserve family ties.
Although such correspondence focused principally on the
provision of economic support, the qiaopi also touched on
cultural, political, educational, and gender themes.
The Chinese Diaspora
 For instance, between 2012 and 2015, some 28 thousand Chinese citizens
obtained EB-5 investor visas from the United States, more than 85 percent of
all EB-5 visas granted (Miao and Wang, 2017; p. 18, citing data from the U.S.
Department of State, 2015)
 Among all China-born citizens obtaining permanent residence in the United
States, the proportion doing so based on investor visas increased from less than
one in 20 in 2010 to more than one in three in 2015 (Miao and Wang, 2017; p.
28)
 China is the number one country of origin for international students in the
United States
Migration is incentivized in China
 Both Out migration and Return Migration is incentivized in

China
 Many students and others working abroad have incentives to
return to China. According to a non-random survey taken by
Peking University, the four major reasons for return migration
include: their comparative advantage in their professional field,
the growing domestic market in China, their ability to exploit that
growing market, and a desire to be reunited with family (Miao
and Wang, 2017; p. 57).
 Two way flow bring new knowledge and innovations
China’s Global Trade
Chinese Trade with ASEAN countries
 Association of Southeast Asian Nations (ASEAN)

countries host over 70 percent of emigrating Chinese and
whose economies are most influenced by Chinese
minorities, as seen from the table below.
 Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand
and Vietnam
Chinese Share of the Economy
Country Share of population, percent Share of GDP, percent
Thailand 3 60
Indonesia 4 70
Philippines 3 70
Malaysia 30 50
Singapore 75 90
Source: https://russiancouncil.ru/en/analytics-and-comments/analytics/the-
chinese-diaspora-in-southeast-asia-gains-and-losses/
Trade partners with China (124) and USA (56).
Source: visualcapitalist.com
China’s Trade with Southeast Asia
Source: visualcapitalist.com
Why the Chinese Diaspora successful in Trade?
• A large proportion of Chinese are entrepreneurial diaspora

• The family-business approach.
• Informal intra-diaspora links, which has facilitated the timely exchange of
business information, deal-making processes and the completion of
transactions built on mutual trust, helping bypass cumbersome and mostly
unreliable formal procedures, i.e. the so-called bamboo network. (By pass
legal, banking etc.)
• The sense of belonging to the great Confucian culture unites the Chinese,
making them proud of their nation and confident in professing ideological
support for the family business pattern and hierarchical relations within the
community.
Comparison
 Chinese diaspora has been in trade for long time and have a
strong connection with intra-diaspora (Bamboo
network/Quaopi network) while Indian entrepreneurs (except
the traditional business communities such as Gujaratis and
Sindhis) depend on other agencies outside communities
 China’s business environment, infrastructure and support
system is far better than India. China has larger trade link
with many countries and has a huge share in the global
economy.
References
 Blomström M, Globerman S and Kokko A (2000). The

Determinants of Host Country Spillovers from Foreign Direct
Investment. CEPR Discussion Papers 2350
 Dongen, Els van (2018) Looking to China and Back: On India’s
Diaspora Engagement, Knowledge Transfer and the Limits of
Inclusion, China Report 54.2 (2018): 1-10
 Kuschminder, Katie (2011) The Role of the Diaspora in
Knowledge Transfer and Capacity Building in Post-Conflict
Settings: The Temporary Return of Qualified Nationals to
Afghanistan, IS Academy Migration Policy Report No. 1
THANK YOU

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Knowledge, Technology Transfer

and International Trade

Dr. SADANANDA SAHOO

 Understanding Globalisation, diaspora

 Knowledge and Technology transfer is a dynamic,

Alumni Network, Professional Network, Hometown

 Knowledge Driven Economy needs great

 This nonimmigrant visa is available to people

County Number (2021) Number (2020)

India 301,616 319,494

China 50,328 51,597

Canada 3,836 3,987

Global total 407,071 426,710

 Trade diaspora of Pre-British Era to Central Asia,

 Telecom Revolution (Sam Pitroda)

 NRI Startup India is formed by a group of successful and professional NRIs to

 Diasporas’ influence on trade is largely due to

Large proportion of Trade diaspora

Large Base in ASEAN countries that facilitates

 Bamboo Network- Supporting each other

 Both Out migration and Return Migration is incentivized in

 Association of Southeast Asian Nations (ASEAN)

• A large proportion of Chinese are entrepreneurial diaspora

 Blomström M, Globerman S and Kokko A (2000). The

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