US' brain drain to be India's gain?

The skilled, Indian-born talent that once flocked to the US is now returning home, a report said.

The initial clamour was over loss of American tech jobs because of outsourcing. Now, an altogether different chorus is on and it warns the US that it could lose its competitive edge to countries like India and China.

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"India is pouring money into technology parks to lure back native talent and produce world class tech companies ... America's brain drain will be India's brain gain," says a new report from AeA, the US's largest high-tech trade body that was formerly known as American Electronics Association.

And China, it points out, is graduating almost four times as many engineers as the US and offers lucrative tax breaks to companies conducting R&D there.

"The good news is that as more countries adopt free markets, they open their doors to US products and services. But, this also presents a challenge for the US as these countries now aggressively compete against us -- or will soon," says John V Harker, chairman of AeA's board of directors.

To meet the challenge, the Washington DC-based body has laid out a two-point prescription for US policy makers: tone up the education system and reconsider the barriers for high-skilled immigration since "foreign workers are indispensable to American science and engineering".

The US's tightened immigration procedures, it points out, has led to a 27 per cent drop the number of skilled workers flocking to the country between 2001 and 2003. These are workers who could have made "significant contributions to the US economy by creating intellectual property and hundreds of thousands of jobs".

Speaking of India's turnaround since the launch of economic reforms in 1991, it says tariffs have plummeted and in-bound trade has skyrocketed. Domestic companies that endured the growing pains of exposure to open competition are now becoming globally competitive.

"India is now embarking on further reform to provide labour flexibility, freer flows of capital and desperately needed infrastructure improvements...This will only make India more competitive and alluring to investors and multinational companies," the report comments.