Migration and BusinessI. MigrationMap—sharp lines divi

Migration and Business
    Today, we’ll talk about migration, diasporas and business.
    In the flat world map, sharp lines show where one country ends and another begins. The real world is more fluid. (1) Peoples do not have borders the way that parcels of land do. They migrate.
    Consider the difference between China and the Chinese people, one is an enormous country in Asia, the other is a nation that spans the planet. More Chinese people live outside mainland China than French people live in France, with some to be found in almost every country. Then there are some 22 million ethnic Indians scattered across every continent. Hundreds of smaller diasporas knit together far-flung lands: the Lebanese in west Africa and Latin America, the Japanese in Brazil and Peru, the smiling Mormons who knock on your door wherever you live.
    Diasporas have been a part of the world for millennia. Today two changes are making them matter much more. First, they are far bigger than they were. The world has some 215 million first-generation migrants, 40% more than in 1990. If migrants were a nation, they would be the world’s fifth-largest.
    Second, thanks to cheap flights and communications, people can now stay in touch with the places they came from. A century ago, a migrant might board a ship, sail to America and never see his friends or family again. Today, he texts his mother while still waiting to clear customs. He can wire his money in minutes. He can follow news from his hometown on his laptop. He can fly home regularly to visit relatives or invest his earnings in a new business.
    Such migrants do not merely benefit from all the new channels for communication that technology provides; they allow this technology to come into its own, fulfilling its potential to link the world together in a way that it never could if everyone stayed put behind the lines on maps. No other social networks offer the same global reach or commercial opportunity.
    This is because the diaspora networks have three lucrative virtues. First, they speed the flow of information across borders: a Chinese businessman in South Africa who sees a demand for plastic vuvuzelas will quickly inform his cousin who runs a factory in China.
    Second, they foster trust. That Chinese factory-owner will believe what his cousin tells him, and act on it fast, perhaps sealing a deal worth millions with a single conversation on Skype.
    Third, and most important, diasporas create connections that help people with good ideas collaborate with each other, both within and across ethnicities.
    Then, there’s the relationship between migration and creativity.
    Immigrants are only an eighth of America’s population, but a quarter of the engineering and technology firms started there between 1995 and 2005 had an immigrant founder, according to Vivek Wadhwa of Duke University.
    The exceptional creativity of immigrants doubtless reflects the sort of people who up sticks and get visas. But work by William Maddux of 1NSEAD and Adam Galinsky of Northwestern University suggests that exile itself makes people creative.
    They compared MBA students who had lived abroad with otherwise similar students who had not, using an experiment in which each was given a candle, a box of matches and a box of drawing pins. The students’ task was to attach the candle to a wall so that it burned properly and did not drip wax on the table or the floor. This Duncker candle problem, as it is known, is considered a good test of creativity because it requires you to imagine something being used for a purpose quite different from its usual one. (7) Some 60% of the migrants saw the solution against 42% of non-migrants.
    The creativity of migrants is enhanced by their ability to enroll collaborators both far-off and nearby. In Silicon Valley, more than half of Chinese and Indian scientists and engineers share tips about technology or business opportunities with people in their home countries, according to AnnaLee Saxenian of the University of California, Berkeley. A study by the Kauffman Foundation, a think-tank, found that 84% of returning Indian entrepreneurs maintain at least monthly contact with family and friends in America, and 66% are in contact at least that often with former colleagues. For entrepreneurs who return to China, the figures are 81% and 55%.
    Diaspora ties help businesses to collaborate. What may be the world’s cheapest fridge was conceived from a marriage of ideas generated by Indians in India and Indians overseas. Uttam Ghoshal, Himanshu Pokharna and Ayan Guha, three Indian-American engineers, had an idea for a cooling engine, based on technology used to cool laptop computers, that they thought might work in a fridge. In India visiting relatives they decided to show their idea to Go-drej & Boyce, an Indian manufacturing firm.
    Mr. Pokharna wheedled an introduction from a young member of the Godrej family, exploiting the fact that both had been at the University of Pennsylvania’s Wharton business school. (9) They discovered that Godrej was already working on a cheap fridge for rural Indians too poor to fork out the $200 normally required, let alone the subsequent electric bills.
    Jamshyd Godrej, the firm’s chairman, was determined to make a cheap battery-powered fridge. With the help of Mr. Ghoshal’s cooling chip, his team produced the "little cool" light, portable, small and cheap. Mr. Ghoshal’s firm in Texas, Sheetak Inc, is working with Godrej to make it more efficient.
    The "new type of hyperconnectivity" that enables such projects is fundamental to today’s networked diasporas. Migrants are now connected instantaneously, continuously, dynamically and intimately to their communities of origin. This is a fundamental and profound break from the past eras of migration. The break explains why diasporas, always marginalized in the flat-map world of national territories, find themselves in the thick of things as the world becomes networked.
    We’ve talked about the changes of diasporas, why diaspora networks are effective and how migrations can help business. Any questions?