An EU brain drain or brain gain?

  • 2000-02-17
  • By J. Michael Lyons
RIGA — Young, smart, educated, fluent in English. Vitas Diyokis is in the perfect position to leave Latvia.

Multinationals abroad would hire him without question, probably pay him more money and outfit him with a fancy title and maybe even a company car.

It's tempting, the Stockholm School of Economics student admits, but he wants to stay.

And Diyokis believes he is not alone, that many educated young people will want to stay here even when looming European Union membership and its guarantees of free movement for workers has the potential to drain the Baltics' best brains.

"I see employers coming here rather than me going there," said Diyokis.

That's a feeling shared by optimists in the Baltics who believe that Latvia's young, upwardly mobile workforce will have to look no further than their backyards for well-paying jobs that match their education.

More foreign investment, the theory goes, will follow Latvia's accession to the European Union, which by the time all the Eastern European countries now up for membership get in, will be the biggest trading bloc in the world.

"Capital will come here and at the moment there's not enough workforce for this capital to operate," said Raita Karnite, director of the Institute of Economics at Latvia's Academy of Sciences. "No one will come here for natural resources, we don't have natural resources. All we have is a workforce."

Most of the Baltic countries' highly skilled workers, like software engineers and programmers, will find all the work they want at home, Karnite believes.

And many already are.

Latvian universities churn out about 250 highly educated software programmers each year and government estimates put the number of homegrown programmers in Latvia alone at about 5,000.

Most work on government projects or for some the country's biggest employers like the energy utility Latvenergo or communications concern Lattelekom.

Others have taken their chances at Latvia's burgeoning private information technology companies like Riga-based Fortech, where the wages are beginning to approach the salaries they would expect abroad in countries like Germany or Sweden and jobs are plentiful.

"There are a lot of projects we can't work on because our staff is too busy," said Janis Rancans, head of Fortech's information technology infrastructure unit.

Top programmers at Fortech make 2,000 lats ($3,448) a month, a salary about 13 times the country's average monthly income but still below their counterparts' salaries in Western Europe.

"In two years it will reach European levels," predicted Mara Jakobsone, editor of the technology journal Baltic IT Review.

What worries Fortech the most is a sort of internal brain drain. Young programmers and analysts are coming to the company to cut their teeth and are then heading to multinationals already in Latvia, like IBM, Compaq and Nokia, which can offer more money and a better chance for advancement.

But Fortech, which employs about 250 workers, is growing and last month merged with the Estonian IT firm Microlink to form the Baltics' largest IT concern and one that someday might rival the Scandinavian heavyweights.

For now, both companies are starving for specialized workers, leading Estonia to establish a university specializing in IT education.

Many, like Jakobsone, see the merger as an indication of future trends and so, apparently, does much of the region's IT workforce.

"There has already been a good opportunity to get a good job in the U.S. or Germany but many people have stayed to look for opportunities here," she said.

But the prospect of a developing economy and rapid advancement has lured others to stay as well, like promising students from the Stockholm School of Economics.

Students there are essentially schooled to bolster their prospects abroad. Classes are in English, often deal with global issues and are often taught by professors from abroad.

"This school gives the credentials to work in other countries but they stay," said Roberts Kilis, an economics professor there. "They are probably the best candidates to move out but they stay."

But Kilis and others offer a caveat. Foreign investment here will hinge a great deal on what the government does.

Many point to Ireland, a country for years plagued with astronomical unemployment or underemployment that has leaked its best and brightest for generations, as a perfect example of how a nation can turn around.

Through favorable tax conditions and an emphasis on education, Ireland has managed to attract many émigrés back home and is now riding a thriving economy that's starving for educated workers.

They also point to countries like Portugal and Spain as countries that joined the EU and didn't witness a mass migration of skilled workers as some had predicted.

"All the previous experience shows that there hasn't been such a movement," said Andris Piebalgs, head of Latvia's EU delegation in Brussels.

In a government poll last May, most Estonians surveyed said they would not look abroad for work after the country joined the EU.

But there is one segment of the population that has left all over Eastern Europe — scientists.

Since the late 1980s, scientists, academics and doctors former communist countries, all of whom are still notoriously underpaid, have left by the boatload.

Tens of thousands of academics left Poland, a country that prides itself on scientific advancements and an estimated 20,000 scientists a year left Bulgaria in the early 1990s for better paying jobs in Western Europe and the U.S.

The Baltics were not spared the exodus.

"Maybe 90-95 percent of the scientists who left Estonia have not come back," said Kristjan Haller of the University of Tartu's Institute of Physics. "You see this because of two reasons. First, we haven't a stable science policy that allows them to make plans for the future and second, the economic situation regarding facilities are not quite comparable to western countries."

EU accession will likely mean more funds for scientific research will be available, which might stem the flow somewhat. But what the scientific community needs most, said Haller, is government support.

"Nokia is a good example," he said. "Finland supported it very much so that it could orient itself from making sports shoes and cables and other electronics to doing telecommunications."

Perhaps the greatest fear that will come with the free movement of workers guaranteed by EU membership is what the neo-rightist movements in places like Austria are clamoring about.

"It's not so much brain drain that is a concern but the movement of unskilled workers," said Piebalgs.

Many predict it will take much longer for conditions to improve for the Baltic region's unskilled or non-specialized workforce.

Their prospects for better money might indeed seem brighter in places like Germany or England.

In Latvia that can go even a step further, where tens of thousands educated and often underemployed ethnic Russians might look to leave.

"Almost all Russians think about going somewhere else for a job," said the Stockholm School student Diyokis, who is Russian and sees a future for his start-up.

"I think we have enough brain power to do it here," he said. "And Latvia is a good place to live."