In a previous article, we touched upon the concept of remittances and its impact on a country’s development. While the concept of remittances is often thought of in purely economic terms, we will see that the recent emergence of the term “social remittances” shows that remittances can’t be confined to a solely monetary aspect.
Definition
“Social Remittance” is a term coined around a decade ago by Harvard Professor Peggy Levitt. Succintly put, it refers to “the social impact of migration that leads to social development back home”. This includes all the skills, knowledge, values, and experiences that are being transmitted from the diaspora to their home country via phone calls, emails, social media or when diasporas travel back home. Levitt identifies four main types of social remittances: norms, practices, identities, and social norms.
This transnational circulation of ideas can influence the home country in areas such as technology, healthcare and even politics. Regarding the latter, a study (Sasse and Ahmadov) showed that the Polish diaspora living in multi-cultural Britain had an impact on the opinions and voting decisions of Poles in Poland. Another interesting finding (Lodigiani and Salomone, 2012) found “that migration to countries with higher political empowerment for women significantly increases the share of women in parliament in the home country.”
The power of social remittances resides in the fact that previously foreign ideas, knowledge or norms can all of sudden be exposed to countries by way of the diaspora. What this means is that these ideas and norms now have a seamless way to diffuse throughout a country’s culture and institutions. The importance of the diaspora in this equation is that diasporas already have the network and the “audience” to spread ideas that would’ve never entered the country without them.
Case in point: the development of India’s IT industry
India is the country with the largest diaspora in the world, as well as the largest annual flow of monetary remittances sent back home ( $79 billion sent back in 2018). While India’s diaspora is extremely diverse, including profiles ranging from migrant workers in Dubai to Microsoft’s current CEO, the way in which they contributed to the rise of India’s extremely performant IT industry is worth an analysis. Based on a paper by Amba Nande from the Centre for Indo-Pacific Studies, at Jawaharlal Nehru University in New Delhi, we will evaluate the symbiotic relationship between India’s diaspora and its IT industry, and what that means for other countries.
What’s compelling about this case study is the way in which the Indian diaspora managed to reverse the process of “brain drain”, instead using the skills learned abroad to carry out development at home. Transfer of skill between the Indian diaspora and the emerging Indian IT industry was fundamental to the latter’s rapid growth. In the 1970–1980’s, the Indian diaspora in the US essentially became the link between US tech clusters and nascent Indian IT companies. Through mentoring, coaching and knowledge-intensive outsourcing, the Indian IT sector received previously unattainable cutting edge skills through a convenient messenger.
This early cooperation led to a virtous circle. Indian diasporsas started moving back to India and starting businesses there, bringing breakthrough technology from abroad directly to India. Some Indian entrepreneurs also relied on diaspora networks to get business leads and export their products abroad. In recent years, the Indian governemnt has taken note that the Indian diaspora represents more than just a source of monetary remittances, with the establishment of the Global India Network of Knowledge. This symbiotic relationship has not only led to the increase in Indian talent in major IT companies worlwide, but has also cimented India’s reputation as an IT hub, attracting investments from both the diaspora and outside investors.
The statistical results of what we have described above are quite breathtaking. Indian software exports went from $4 million in 1980 to a whopping $62 billion in 2011–2012. The now-massive Indian IT sector, which racks in around $100 billion anually, also provides 54% of all jobs in smaller towns and cities, but more importantly 74% of jobs for people under 30. Moreso than the topic of pure social remittances, countries should further explore how the IT sector could provide relief from lingering youth unemployement.
Are social remittances always good?
The Indian example definitely paints remittances and more specifically social remittances as a net positive. But is that always the case? Is the transnational transfer of ideas always a good thing? Does it erode cultures by clashing with traditional values?
In reality, this question is not only multi-faceted but also incredibly subjective. For a conservative, more “liberal” values from abroad might not necessarily be seen as a gain for his/her country. However, that same person might also recognize the usefulness of knowledge transfer from the diaspora. Judging social remittances as “good or bad” is thus a relatively fruitless exercise, considering all of social remittances’ moving parts and how they might be perceived by different sets of people.
Scholars in the field have attempted to shed a pragmatic light on the different aspects of social remittances. One of the most important findings is the correlation between economic and social remittances, that is, the more money someone sends back home, the more social influence they will have. This amounts to the fact that richer diasporas’ ideas are more influent back home. This might seem obvious, but it is important to note that there is severe inequality in social remittances, too.
Conclusion
Social remittances are a direct complement to economic remittances and one cannot be spoken of without the other. The transfer of different norms and values might be controversial, as can be seen in global resistance to American individualism and consumerism, but the transnational circulation of skills and knowledge is undoubtely a force for good (except maybe nuclear weapon codes). What we do at GrowHome is capitalize on these knowledge transfers, by creating a platform putting diasporas and entrepreneurs back home in contact. The Indian IT miracle can be replicated by any country in any sector; GrowHome’s platforms allows to do just that.
Who we are
GrowHome is a platform connecting diasporas to entrepreneurs back home. The problem we’re trying to solve is twofold: on one hand, diasporas often gain professional and financial resources abroad which they want to share with people back home, but they have no easy way to do so. On the other hand, entrepreneurs in emerging countries have incredible talent, but lack access to business opportunities. On GrowHome, diasporas can mentor, collaborate and fund entrepreneurs from their home countries. Through the social media interface, diasporas can do what we call “impact tracking” by seeing updates from the entrepreneurs they help directly on their feed.
We are launching our BETA product in Jordan and Palestine. Visit our website www.growhome.app and sign up for our BETA waiting list, either as a diaspora or an entrepreneur.
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