NEW STUDY | How companies can keep innovating despite tightening immigration rules – 4 ways forward

As more and more countries tighten their immigration rules, it is becoming more difficult for companies to recruit the highly skilled workforce needed to conduct research and development (R&D). A new study, recently published in the MIT Sloan Management Review, shows that this reduces both the quantity and quality of innovations.

Multinational companies have long relied on international scientists and engineers. In industries such as biotechnology and artificial intelligence, access to global talent is crucial for developing new technologies. But as countries like the US, UK, the Netherlands and Australia tighten their migration rules, it is becoming increasingly difficult to bring research teams together in one place.

Research shows that the development of innovations suffers when companies are forced to spread their R&D teams across several countries. Remote communication cannot replace the knowledge transfer, creativity and problem-solving that take place in face-to-face meetings. After the US sharply reduced the number of visas for highly skilled workers, the patent output of US multinationals dropped and innovation work shifted to subsidiaries in countries such as Canada, India and China. Similar patterns are now emerging in Europe.

Despite the challenges, there are ways to mitigate the effects. The study identifies four strategies that can help firms maintain innovation capacity even when mobility is restricted:

1. Immigration arbitrage – Take advantage of differences between countries’ migration and intellectual property policies by locating R&D in countries with more open rules and strong IP protection.
   
   
2. Modularization – Dividing innovation work into clearly delineated parts. Core knowledge is protected and kept together, while other parts can be shared globally.
   
   
3. Flexible geographical coordination –Create hybrid teams with both fixed R&D units and remote experts. This provides access to global talent without building large new offices.
   
   
4. Regional ecosystem – Establish regional centres of excellence that collaborate with local universities, research institutes and technology companies to access specialized knowledge.
   
   

More about the article and the authors
The article Building Innovation Teams Across National Teams in MIT Sloan Management Review is written by Solon Moreira, Associate Professor of Entrepreneurship and Strategy, Ram Mudambi, Frank M. Speakman Professor of Strategy, both at the Fox School of Business, Temple University and Deepek Nayak, Assistant Professor, Max M. Fisher College of Business, Ohio State University.