Immigration and European Innovation Systems, Challenges for Economic Growth and Prosperity

Abstract

Immigration plays an important role in helping developed economies to maintain and improve their standards of living while their societies are aging. Developed economies are increasingly dependent upon highly skilled immigrants to provide scarce skills and boost innovation. They also rely on a broad range of low and middle skilled immigrants to perform work for which few native workers are available. These demands remain even in times of economic downturns, in particular the need to attract and retain the most talented immigrants. The aim of this paper is to outline how the EU and its member states approach the immigration-growth question. It examines the short and long term trends in how the immigration system supports economic growth and prosperity. The paper is organised into five parts and each provides a partial contribution to the question of how immigration contributes to the economic growth of the European Union. The first part outlines the theoretical framework for this study, which combines the national innovation systems approach with studies of the migration system, in order to get a better understanding of the relationship between immigration and economic development. The second aims to provide a general background to the question of how different migrant workers contribute to economic development. It explores, in particular, the differences between the contribution of immigrants at different skill levels1 and the way in which policy makers have responded to this in general. The third part focuses in on developments in the European Union and its member states. It studies the nature of the economic contribution expected of different types of migrant workers and which impacts are short term as opposed to long term. It also discusses the types of immigration which the EU member states have experienced in recent decades and how these trends have changed. The paper devotes special attention to (super) highly skilled immigrants because of their expected contribution to economic development and the performance of European innovation systems. It also highlights the difference between immigration from third countries and intra European migration as there are important differences in the nature of these flows and the extent to which national governments can influence them. The fourth part consists of the evaluation of policies and institutions, focusing on the features of the migration system which affect economic growth and competitiveness. More specifically, it discusses the extent to which the European innovation and migration systems succeed in selecting, attracting, absorbing, and retaining talented immigrants who contribute to economic development. The final part assesses the impact of the economic crisis on migration flows, policy responses and the role of immigrants in the economy in both the short and medium term. It argues that changed economic conditions and the policy measures taken in response have an impact on immigration flows in the short term. The economic restructuring which accompanies the downturn may lead to a jobless recovery and a changed demand for different types of migrants. In the medium and long term the need for, in particular, highly skilled migrant workers remain.