Coming back home after the sun rises: Returnee entrepreneurs and growth of high tech industries

Recently, the role of returnees in the economic development of various East Asian nations has received much attention. The early literature on the relocation of the most highly trained individuals from a developing nation to a developed nation viewed the phenomena as a “brain drain.” Since the 1990s, a new strand of thinking has suggested that for developing nations this was actually a positive phenomenon; as these expatriates studied and then worked abroad, they absorbed technical expertise, managerial, and entrepreneurial skills. These theories stipulated that these expatriates then returned home, and ignited a virtuous circle of technological entrepreneurship leading to rapid economic development. Much of this literature gives returnees a critical role in the home country's take-off period of the local information and communications technology (ICT) industry. This interpretative essay examines the evidence for three of the most prominent East Asian economic success stories – Taiwan, China and India – to determine the actual role played by returnees in their ICT industries’ growth. The key question is whether returnees were critical for the initial development period, or whether they played an important role only in the later, expansionary phase of the industry. We find, contrary to the current literature that returnees were not critical, in the initial formation of these countries’ ICT industries, but did play an active role in the secondary developmental phase after indigenous entrepreneurs and policy makers had laid the groundwork for the industry.