01 Sep 2015
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Faculty Q&A: The Working World

Professor Bill Kerr on innovation and its connection to a global workforce
Re: Evan Baehr (MBA 2011); Bill Barnett (MBA 1971); Forrest Cook (AMP 67); Lindsay McGregor (MBA 2013); Juan Enriquez (MBA 1986); Mike Farmer (MBA 1971)
by Julia Hanna

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Photo by Susan Young

How did you become interested in the impact of high-skill immigrant labor?

In the 1990s I helped develop a wireless data technology for a Korean company. The inventor was a Korean scientist living in Silicon Valley, so I spent a lot of time flying back and forth between Seoul and California to help make the product a reality. That made an impression—that an immigrant living in the United States was turning back to his home country to help realize the products of his invention. So my first work in this area was about the outbound effects of high-skill immigration to the United States for the sending countries.

 

What are the inbound effects of high-skill immigration for the United States?

Legal immigrants represent about 14 or 15 percent of the workforce, but our studies of patent data show that ethnic names [primarily Indian and Chinese] are responsible for roughly 25 percent of domestic patents. If you look at the PhD workforce for science and engineering, the immigrant share is even higher at roughly 50 percent. The math and science skills behind many of these innovations are relatively easy to port across locations—they aren’t as reliant on having an American cultural background as pursuits like marketing or law.

Immigration is such a hot-button topic in politics. Do you hold out any hope that your research can provide a more balanced perspective?

I do believe that over time it’s possible to inform policymakers in a way that leads to improved choices and decisions. The more analysis informs this debate, the better, so that we can more easily understand and model the outcome. When we make changes to immigration policy, what is the impact on GDP growth and tax revenues? You need studies to accomplish that. Policy is a tremendously powerful lever when it works. With that said, I’m not a fan of forever sitting on the sidelines, waiting for policy to make change. Business needs to strategize to ensure it has access to the talent it needs, while thinking through the constraints that exist.

What is a key takeaway for anyone operating a business today—global or local?

People do not move between countries, or even states, in a generic way. We have affinities and particular skill sets for places that we connect back to—places where we have insight into how things work. The best companies figure out how to internally and externally manage those affinities and ethnic networks to their advantage.

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You also study companies like Netflix and Airbnb that have a multi-country presence as part of their model from the get-go.

The course Launching Global Ventures grew out of the realization that we have MBA students who envision a company that has its R&D in India and manufacturing in China with a couple of key executives in London. So a key point that I’ve been narrowing in on is how well companies build globalization directly into their value proposition. Airbnb is one of those special organizations that embedded globalization and the differences that exist across countries into the heart of its model. It’s set up with the idea of unlocking value by leveraging the opportunities created by a worldwide community. Not all companies have those network effects, of course—Rocket Internet copies ideas for online businesses and thinks of the best place in the world to build up a business around that idea, whether it’s a Zappos clone or something else. It’s striking because it’s just a way of looking at the world through a different lens. They approach it as: Here’s a really big idea and here’s a really big place that needs it.

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