Brain gain

Hard numbers are hard to come by, but increasing anecdotal evidence suggests that rising numbers of university graduates are fleeing Spain and its sky-high unemployment rate, jumping on planes to Germany, the rest of Europe and beyond. In itself that isn’t necessarily bad for the economy. But the new Spanish government should address the root causes of that new phenomenon, inasmuch as the new emigration is borne by necessity more than choice.

Arguably, a prolonged outflow of skilled emigrants can weaken a country. For decades, brain drain has been a fact of life in countries like Italy or Portugal. In contrast, Spain, at least in the 1990s, had more “brain exchange” with other EU countries, according to one study. By 2005/06, the emigration rate of highly-educated Spaniards was just 2.2, according to OECD data, up from 2 per cent in 2000. This compared to more than 7 per cent for Germany and Italy, or Portugal’s near 12 per cent.

Clearly, with a 23 per cent unemployment rate — double that for the young — this is no longer the case. But the outflow can be positive. For a start, these emigrants will acquire valuable skills (including languages, generally a weak spot) and experience in faster-growing countries. Many of Spain’s most successful entrepreneurs founded companies in Spain after picking ideas abroad.

What’s more, the prospect of emigrating incentivises graduates to acquire more skills, even if they end up staying home, according to economist Oded Stark. Spaniards abroad can also facilitate trade and create networks: exporters say the lack of significant Spanish diasporas has hindered exports relative to, say, Italian goods. The emergence of Skype and other digital applications also make separation less traumatic.

Of course, the prospect of a sustained talent emigration is worrying. Here, Spain has a trump card: emigrants often come back. But if high unemployment persists, they will delay their return.

That’s why Spain’s new government must focus like a laser on labour reform and job growth. Educated Spaniards will not come back on temporary contracts with miserly pay if they receive much better conditions abroad. The embattled country can’t afford to lose them for good.