There's a better way to control the flow of migrants.

Photographer: Jose Rivera/AFP/Getty Images

Time to Privatize Immigration

Mihir Sharma is a Bloomberg View columnist. He was a columnist for the Indian Express and the Business Standard, and he is the author of “Restart: The Last Chance for the Indian Economy.”
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The West, it's obvious, faces a migration crisis. Across the aging, stagnating economies of the developed world, citizens are revolting against what many perceive as an uncontrolled influx of foreigners. The U.S. apart, most of these economies are also facing a prolonged crisis of growth. Under other circumstances, the solution would be obvious: restore vitality by taking in more creative and productive people from India, China and other parts of the developing world.

QuickTake Skilled Immigrants

But how to do so, given the fraught politics of immigration? There's clearly something unsustainable about the West’s current approach -- the idea that countries won't seek immigrants, but will by default take in whoever lands up on their shores or games the system to stay. Ironically, one answer may be found in a nation historically as opposed to immigration as any blood-and-soil European polity: Japan.

While Japan's immigration numbers remain minuscule, especially compared to countries like the U.S. and Australia, they're rising. Under Prime Minister Shinzo Abe, the number of foreigners living in Japan has increased by 10 percent. Japan’s leaders have tried to dilute opposition by using a controversial program to bring “technical interns” into Japan; their ranks have expanded 27 percent in the same period.

Other countries have work permit systems of this sort, of course. Indian companies have long demanded more intra-company transfers to the U.K, for example. And the U.S. has the H1-B visa program, in which corporations sponsor skilled employees. But companies are using the Japanese internship program differently, training future employees in their home countries before they even leave. There’s a vast difference -- politically and culturally -- between Indian IT service providers shipping cheap workers across national boundaries and “national champion” companies bringing employees from other countries back home.

Indeed, resistance to the use and abuse of work permit programs by Indian IT companies is quite understandable. Firms have exploited the H1-B program to import low-wage software engineers for specific projects -- pejoratively known as "body-shopping." While this may improve efficiency overall, it does little for long-term productivity and innovation in either the U.S. or India.

The comprehensive immigration reform package that almost passed a few years ago would have substantially reformed the U.S. program, allowing individual migrants to change jobs rather than depending on a single employer. This would have been good for everyone -- except, that is, the IT companies who would've seen their business model evaporate.

An even more crucial reform, surely, would be for multinational companies to help select the kind of immigrants that their home countries really want and need, and prepare them in advance for life there. Logically, those that thrive in a particular multinational’s corporate culture -- so often shaped by the attitudes and instincts of the company's home country -- should do especially well once they relocate. There’s even a word for these employees in the management literature: “inpatriates."

Once they arrive, the companies they work for can do what liberal governments would struggle to do -- introduce the newcomers to local customs that help them build cross-cultural bridges. At Sweden’s Sandvik, for example, the country’s famed coffee breaks or “fika” served that purpose for Indian inpatriates.

There are few other options. Points-based systems such as those used in Australia and Canada -- which grade possible immigrants on the basis of their age, whether they speak English, their level of education and so on -- are inherently elitist. They'd likely struggle in countries where egalitarianism is a crucial part of the national self-image. In addition, Australia and Canada already have relatively successful multicultural societies. More homogenous countries might implicitly prefer that those whom they put on a path to citizenship be selected with an eye towards whether they can assimilate effectively.

Its recent troubles apart, the U.S. had probably developed the most effective pathways to citizenship in the West, especially for skilled workers. Its higher education sector, the best in the world, served as a magnet for the talented; a year’s grace period after they finished their schooling allowed students to find companies willing to hire them. The university experience aided their assimilation, and the job-seeking process served as a filter for useful skills.

Yet few places have as attractive a higher education system as the U.S.; the task of screening possible future citizens can't be left to local colleges. Nor should it be left to bureaucrats, for that would require them to differentiate between various seekers after citizenship, something that violates deeply-felt liberal principles.

Companies are better suited to the task. They'll be quicker to identify the skills that will be useful and productive than governments ever could be. They can pick and choose possible immigrants in their home countries, which no government can do. And the ability to succeed in a particular company’s corporate culture is a good proxy for how well immigrants will adapt to their new country. Perhaps the next thing that needs to be privatized is migration.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Mihir Sharma at m.s.sharma@gmail.com

To contact the editor responsible for this story:
Nisid Hajari at nhajari@bloomberg.net