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Networks and Diaspora

November 29, 2011

Great article in The Economist

“Immigrant networks are a rare bright spark in the world economy. Rich countries should welcome them”

The magic of diasporas and the similarities with networking – trust, ease of business and money – some common threads…..

Excerpts from the article

These networks of kinship and language make it easier to do business across borders

Trust matters, especially in emerging markets where the rule of law is weak. So does knowledge of  the local culture. That is why so much foreign direct investment in China still passes through the Chinese diaspora. And modern communications make these networks an even more powerful tool of business.

Surely nationally, regionally and locally

Diasporas also help spread ideas. Many of the emerging world’s brightest minds are educated at Western universities. An increasing number go home, taking with them both knowledge and contacts. Indian computer scientists in Bangalore bounce ideas constantly off their Indian friends in Silicon Valley. China’s technology industry is dominated by “sea turtles” (Chinese who have lived abroad and returned).

All networking gives you the chance to do this and this…

Diasporas spread money, too. Migrants into rich countries not only send cash to their families; they also help companies in their host country operate in their home country. A Harvard Business School study shows that American companies that employ lots of ethnic Chinese people find it much easier to set up in China without a joint venture with a local firm.

The full  article is available here – full of interesting research and other statistics

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