March 2015 \ Diaspora News \ DIASPORA NEWS IN BRIEF
Want to grow? Send workers abroad

A study reveals that small firms should allow their employees to learn from the developed markets to go from “zero to hero” in a short time.

  • Mr Sourindra Banerjee, Mr Jaideep C Prabhu, Mr Rajesh K Chandy

A study by three Indian-origin researchers has revealed that successful small firms study competitors, network with other firms and allow their employees to learn from the developed markets to go from “zero to hero” in a short time. “There are big benefits in encouraging citizens to study and work in developed markets, gaining education and experience to become future leaders whose knowledge can drive growth,” added the study that compared business data from India and Britain across a 10-year period. The research was carried out by Mr Sourindra Banerjee from the University of Warwick, Mr Jaideep C Prabhu from the University of Cambridge and Mr Rajesh K Chandy from the London Business School.

The authors feel that this study is a wake-up call to smaller nations to make important changes in how they do business. They compared business data from 116 firms from India and 160 firms from Britain to understand how smaller Indian companies, despite their lack of experience, were able to grow at a remarkable speed. The authors found that the most successful small companies had been able to learn from the personal business experience of their own well chosen leaders.

Smaller nations often fear that allowing citizens to study and work in developed countries results in “brain drain” and must be discouraged. “Theories from developed contexts do not easily transfer to emerging markets. Policymakers in emerging economies should be careful about placing obstacles in the paths of their citizens who try to study or work in developed markets,” the trio observed. “Indeed, they might encourage their citizens to study in developed markets by providing them with scholarships, increasing the availability of loans, and removing foreign exchange restrictions on spending in developed markets,” the authors concluded.