Institutions, Innovation and Growth

Institutions, Innovation and Growth

Selected Economic Papers

The Cournot Centre series

Edited by Jean-Philippe Touffut

The first book in this important new series, under the general editorship of Nobel Laureate Robert Solow, Institutions, Innovation and Growth assembles a stellar cast of international contributors. Leading economists join the debate on innovation and economic growth, focussing on a broad spectrum of issues ranging from labour markets to corporate governance. Growth paths within the OECD are also assessed, with particular emphasis on contrasts between US and European models. The book seeks to identify those institutional factors, taking into account different national trajectories, which might serve to promote economic growth in Europe.

Chapter 4: Transnational technical communities and regional growth in the periphery

AnnaLee Saxenian

Subjects: economics and finance, economics of innovation, industrial economics, innovation and technology, economics of innovation


AnnaLee Saxenian Discussions of globalization in the early twenty-first century focus primarily on the liberalization of trade and capital flows. However the integration of world labour markets has historically been one of the most significant drivers of economic change, and promises to be at least as far-reaching during the current era. One indication of these changes is the growing political attention paid to highly skilled immigrants. Regular increases in the number of H1–B (Temporary Professional Class) visas for foreign-born workers in the USA in the 1990s and the spate of ‘copycat’ policies in Europe and Asia designed to attract foreign technical skill underscore the perception among policy makers of the need to integrate domestic economies into global labour markets. This chapter examines the labour market behaviour of increasingly mobile and sought-after skilled workers in Silicon Valley – a model for policy makers around the world – where one-third of the technical and professional workforce is foreign-born. It suggests that, whilst highly skilled immigrants have generated substantial wealth and employment in the region, their long-term contributions to the economies of distant regions will be still more significant. Several thousand US-educated immigrant engineers and scientists have returned from Silicon Valley to their home countries, either temporarily or permanently, in the past two decades. The trend shows no sign of slowing. These transnational entrepreneurs are transforming the ‘brain drain’ into a more dynamic and reciprocal process of ‘brain circulation’ and, in so doing, creating unprecedented new economic opportunities for formerly peripheral economies, from Israel...

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