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Will Anti-Immigration Fervor Hurt the High-Tech Sector?

The UK has opened a new battlefront in what appears to be a concerted effort by developed economies to limit immigration to their shores, a move that has some significance for high-tech companies.

To Western politicians, the uproar over immigration in communities and nations struggling with high unemployment rates is a useful tool for winning votes. But for businesses operating internationally, it is another one of a rising pile of obstacles to moving critical employees around or securing the services of new ones.

The political drama over immigration is controversial in the United States, but it is in Europe where it has become highly contentious. In addition to fighting illegal immigration, leaders of every political platform in major European nations are now taking steps to limit even legal immigrants, especially from developing countries.

In the UK, for instance, home secretary Theresa May has announced a cap on the number of immigrant workers from non–EU nations into Britain by a fifth from next year. May said non-EU nationals permitted to work in the UK per year will not exceed “21,700.”

The government noted that the restriction will not affect thousands of other workers legally allowed to work in the UK on intra-company transfers. I don't believe that. Once you start tinkering with a major policy like this, even intra-company transfers will ultimately feel the impact.

The new policy is part of the government's plan to cut net immigration into the UK by almost half over five years. Still, I question the timing of Prime Minister David Cameron's decision at a time the government is planning on developing a high-tech center in East London to compete with similar ones in Asia and North America.

The UK is only the first Western nation to propose and implement tighter restrictions on immigration. Others in Europe and North America are considering similar moves to safeguard local jobs and appease citizens worried about perceived job losses to immigrants. This will obviously have some impact on the high-tech industry, a segment of the global economy that has long relied on immigrants to fuel innovation and drive growth.

While businesses will be hurt by these restrictions, they will also hurt the competitiveness of nations implementing the policies. Japan, for example, has had a restrictive immigration system in place for decades, making it tough for the country to compete globally for the best technology minds. As the country's population ages, there are already discussions within Japan about relaxing the rules.

In a November advertisement, Japan's Forum of international Relations, an industry body, warned: “If Japan wants to survive in a globalized world economy and to advance her integration with the burgeoning East Asian economy, she essentially has no other choice but to accept foreign migrants.”

What emerges from a situation like this is that companies will either move elsewhere to find fresh talents and cheaper labor, or they will create satellite offices. Many high-tech companies are doing just that. For example, software giant {complink 3426|Microsoft Corp.} is “opening a development center” in British Columbia, which allows for foreign workers without restriction, unlike in the US.

Britain and other Western country need to exercise caution in this immigration tussle, because local companies will only accelerate outsourcing if they cannot recruit employees from wherever.

10 comments on “Will Anti-Immigration Fervor Hurt the High-Tech Sector?

  1. AnalyzeThis
    December 2, 2010

    This really is a very complicated issue.

    I agree that in general, there are some very strong feelings against immigration right now — especially in the U.S. — and the causes for this are numerous.

    Obviously, the “war on terror” is one factor. I believe there are many people out there that secretly fear that any person they meet of Middle Eastern origin is a secret terrorist.

    The drug wars in Mexico are another factor, and obviously Arizona has taken up a very strong anti-immigration stance in response.

    And with the high levels of unemployment and general lack of jobs, I doubt many Americans are going to be too supportive of allowing, “immigrants to come in and take jobs away from needy citizens.”

    So I am not surprised to hear that the UK is taking steps to limit the number of immigrant workers. Will this become a trend? I’m not sure. Could this possibly hurt the tech sector? You know, I think it could. As you say, this potentially could only encourage companies to outsource further.

  2. Hawk
    December 2, 2010

    Immigration has always been a touchy subject and it will only become more controversial in future. Companies operate sometime on a wavelength that is supposed to be global and they don't always consider or see the social impact of their actions. Governments have to figure out ways to balance the needs of businesses and other parts of the society and sometime this results in decisions that may not be popular with corporations.

    Will the UK government shoot itself in the foot? Possibly. Will businesses be hurt by this new policy? Very likely. Will the decision be popular with Britons? Most definitely.

  3. Mydesign
    December 3, 2010

        It’s very sad, to here one more news against the immigration, after the initial step taken by US. Once after completing the studies majority of techies are migrating to other countries, for better career growth. We have to consider the manpower pool as global. Even though the countries want to protect the local interest, they can allow the immigration process especially in skilled technical areas.  Then only innovations will happens and as a resultant new product can be released to the market. The national governing bodies can seek alternate methods, against the unemployment and to protect their interest. Initially many of the countries opened their markets for global investment and invited almost all business tycoons for investment.  So the capital investors have their own interest and policy’s for recruitment. Once after establish, I think it’s not fair to levy extra tax or other form of restrictions for the foreign employees.

  4. Ashu001
    December 3, 2010

    There is nothing wrong in this move(if it was accompanied by aggressive training for Citizens to take up the High-Tech jobs).

    Unfortunately there is no such move.On the contrary,Research and Education budgets are being cut rather aggressively by most Govts in the West.Which means once those jobs go overseas,they will never be coming back.

    As for the Highly skilled and talented individuals they really have nothing to worry about.If the West wont take them,Asia will happily absorb the best talent.Remember the best Talent is always in demand(no matter how deep a recession is on currently).

    Regards

    Ashish.

  5. Anna Young
    December 3, 2010

    Much of the discussions about immigration in Europe — and I suspect in North America too — is driven both by fear and also by the realities of limited resources. Many in the UK believe the country is being overrun by immigrants who often do not integrate as well as the native-born citizens would like. The more recent economic problems that culminated in sharp budget cuts will only make the situation worse.

    The backlash is not a recent development, however. There have always been anti-immigration developments by ordinary citizens in developed economies. The danger to businesses this time is that the government is today in the driver's seat of sharply scaling back immigration. They'll promise it won't affect businesses but eventually companies will find their ability to move employees around or recruit internationally curtailed.

  6. Barbara Jorgensen
    December 3, 2010

    This is a tough issue for all developed nations. Public perception does not differentiate between illegal and illegal immigrants (in the US anyway) and people willing to work for below-average wages vs. highly trained, highly educated immigrants. In the the US, the H1B visa system is supposed to allow in only the most qualified workers, but the total number of visas has been reduced and is capped very quickly.

    The issue of transfer among countries in the EU is perplexing. Companies should be allowed to move employees around without government intervention. If this person is gainfully employed, it's a net positive for any country they resdie in.

  7. Ashu001
    December 3, 2010

    Anna,

    I agree with your line of thinking.But we also have to understand the importance of helping people understand the importance of High-Tech workforce and the number of related/ancillary jobs they generate in the wider economy.

    Its ok to put a cap on unskilled labor entering the UK,but when it comes to Highly skilled labor its a big-big problem and will end up with Companies moving highly skilled jobs overseas to where there are no such restrictions on recruiting the best and most skilled employees.

    Regards

    Ashish.

     

  8. eemom
    December 3, 2010

    While I agree with your premise, I'm not sure how the US or the UK would implement such a restriction.  To allow a certain group unlimited imigration rights while restricting others could have its own set of issues and biases.  I believe restricting imigration of high skilled high tech individuals is decision that will ultimately hurt companies and perhaps not benefit citizens.  This is a case where the best man gets the job (hopefully).  I'm not sure companies care whether the “man” is an immigrant or not, I don't believe the government should interfere to make it easier for people to get jobs.  Competition and challenge are always motivational drivers.

  9. maou_villaflores
    December 31, 2010

    I guess the High-Tech sector is not really affected. They can always outsource the job somewhere which they can get the same result lesser the cost than bringing a highly-skilled IT professional on-shore.If we do the math it will cost them too much in particular with the relocation and immigration lawyer expenses.

  10. prabhakar_deosthali
    December 31, 2010

    Whether such restrictions are actually implemented or not, this has definitely created jitters in the nations which are beneficiary of the current outsourcing. The economy of country like India which has largely benefitted from the IT outsourcing boom will be affected to a great extent. And this fear has already affected the stock prices of the IT companies which are heavily dependent on revenues from outsourcing

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