Abstract
The paper examines the flow of highly skilled workers employed by foreign companies in Hungary. It explores the relationship between foreign direct investment (FDI) and tacit knowledge flows through the mobility of highly qualified workers in this age of globalisation. The paper shows that mobility is a very important factor in the transfer of knowledge linked to the movement of capital—to FDI. The paper analyses the potential transfer of knowledge and skills from advanced market economies to Hungarian companies as accompanying FDI. The analysis is based on a pioneering survey on business-led mobility.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
Enormous literature and political papers are available on Eastward–Westward migration. This study does not deal with the highly debated issue of highly skilled workers’ mobility, namely brain drain effects. Much less attention has being devoted to Westward–Eastward flow that investigated here.
The current UN definition, which is the basic for official statistics, defines migrants by calculating the length of stay (1 year + 1 day of residence in another country and foreign citizenship or permanent residence in a different country). This means that simple migration statistics cannot assist too much in classifying HS migrants as emigrant/immigrant or mobile.
This pilot exercise was contracted by the EU Brain-Drain Project (EU ERBHP V2 CT 1999–07). The IKU Innovation Research Centre of Budapest designed a survey to study the inflow of FDI business-led, highly skilled workers. The aim was to attempt to measure this process and collect adequate data for further investigation (Inzelt 2005).
The survey focuses on the role of foreign investors in HS inflow where the investors are either small foreign firms or giant MNCs (The main characters of the survey are described in Inzelt (2005)).
Data collection of Ministry defined broader the innovative firms than Oslo Manual. It took into account not only those firms that introduced technologically new products or processes but those ones too that performed any kind of innovation activities such as training and retraining of employees, outsourced R&D activities.
The questionnaires were carried by István Miklós (PhD student) and Katalin Berényi Üveges (research assistant) at IKU. PRIME EU NoE support allowed arranging this follow-up exercise.
In the initial period of foreign investment, Hungarian language skills were held to be a crucial knowledge-conveying capability, and one of the functions of returnees was to help in communication with their particular language skills. Foreign owners preferred to recruit returnees and they could offer suitable jobs, providing salary and benefits packages were fully comparable to those in the West. After a very few months, however, it became clear that this function is, in fact, not so important. Returnees posted largely for easy communication purposes were replaced very quickly—either by locals or by other foreigners who could communicate in one of the better-known foreign languages.
More detailed information is needed on distribution of business R&D tasks by routine and breakthrough research activities.
References
Avveduto, S., & Brandi, M. C. (2001). The evolution of theories of the brain drain and the migration of skilled personnel, 2nd interim report, CNR, Rome.
Canberra Manual (1995). The measurement of scientific and technological activities. Manual of the Measurement of Human Resources Devoted to S&T. Paris: OECD-Eurostat.
Caves, R. E. (1996). Multinational enterprise and economic analysis, 2nd ed. Cambridge: Cambridge University Press.
Cheese, J. (1991). Attitudes to innovation in germany and britain: A comparison. London: CEST Centre for Exploitation of Science and Technology.
Davenport, S. (2004). Panic and panacea: Brain drain and science and technology human capital policy. Research Policy, 33(4), 617–630.
David, P., & Foray, D. (1995). Accessing and expanding the science and technology base. OECD STI Review, 16, 13–68.
Dunning, J. H. (1993). Multinational enterprises and the global economy, reading. Great Britain: Addison-Wesley.
Dutrénit, G. (2000). Learning and knowledge management in the firm. Cheltenham, Northampton: Edward Elgar Publishing.
Findlay, A. M., Lelievre, E., Paddison, R., & Boyle, M. (1994). Skilled labour migration in the European context: Franco-British capital and skill transfers. Societies, 1, 85–94.
Frascati Manual (2002). Proposed standard practice for surveys on research and experimental development. Paris: OECD.
Gaillard, J. M., & Gaillard A. M. (1998). The international circulation of scientists and technologists: A win–lose or win–win situation? Science Communication, 20(1), 106–115.
Gupta, A. K, & Govindarajan, V. (2000). Knowledge flows within multinational corporations. Strategic Management Journal, 21(4), 473–496.
Inzelt, A. (1994). Privatisation and innovation in hungary: First experiences. Economic Systems, 18(2), 141–158.
Inzelt, A. (2003). Foreign Investment-Related Immigration; Pilot Survey. Knowledge-flow through Brain Circulation, Summary, http://www.cordis.lu/indicators/publications.htm
Inzelt, A. (2005). The inflow of managerial knowledge and direct investment in transition economies: The case of Hungary, devoted to Research Policy.
Mahroum, S. (1999). Patterns of Academic Inflows to UK Higher Education System, Higher Education in Europe, The Entrepreneurial University: How to survive and prosper in ERA of global competition, vol. XXIV, No. 1.
Nelson, R., & Winter, S. (1977). An evolutionary theory of economic change. Research Policy, 6, 36–76.
North D. (1995). Soothing the establishment: The impact of foreign-born scientists & engineers on America. Lanham, MD: University Press of America, Inc.
Polanyi, M. (1962). Personal knowledge: Towards a post-critical philosophy. New York: Harper Torch.
Salt, J. (1997). International movements of the highly skilled, OECD, International Migration Unit, Occasional Paper no. 3, 2000, OECD/GD (97)169.
Saviotti, P. (1996). Technological evaluation, variety and the economy. Cheltenham, UK: Edward Elgar.
Senker, J., & Faulkner, W. (1996). Networks, tacit knowledge and innovation. In R. Coombs, A. Richards, P. Saviotti, & V. Walsh (Eds.), Technological collaboration. The dynamics of cooperation in industrial innovation. Cheltenham, UK: Edward Elgar.
Taggart, J. H. (1998). Strategy shifts in MNC subsidiaries. Strategic Management Journal, 19(7), 663–681.
U.N. (1998). Recommendation on Statistics of International Migration, Revision 1, Statistical Papers, Series M., No. 58, United Nations, New York.
UOE (2001). Data collections; definitions, explanations, and instructions, UNESCO OECD EUROSTAT.
Winkelmann, R. (2002). Why do firms recruit internationally? Results from the IZA international employer survey 2000. In OECD (Ed.), International mobility of highly skilled. Paris: OECD.
Wolff, E. (1996). Technology and the demand for skills. OECD STI Review, 18(1999), 95–123.
Acknowledgement
The author wishes to express her special thanks to Jasminka Laznjak, Ágnes Hárs, Teréz Laky, Jacky Senker and Vincent Mangematin for their valuable comments on the previous versions of this paper. Special thanks for granting agencies: EU Brain-Drain project (EU ERBHP V2 CI 1999–07) supported data collection in 2000, and PRIME NoE granted the follow-up exercise in the frame of the Globpol project. Thanks for the human resources managers of responding companies. Without their contribution this study could not have been completed.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Inzelt, A. The inflow of highly skilled workers into Hungary: a by-product of FDI. J Technol Transfer 33, 422–438 (2008). https://doi.org/10.1007/s10961-007-9053-z
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10961-007-9053-z