Combined buying power of the minority population in the US is around $2.5 trillion
As part of its efforts to leverage the strengths of the diaspora, the US Department of State and the US Agency for International Development (USAID) hosted the second annual, two-day Global Diaspora Forum for 2012 in Washington, D.C. in July. More than 500 leaders from diaspora communities with roots in over 50 countries, US government officials, private stakeholders and executives from nonprofit organizations and foundations explored new ways to tap the diaspora to boost economic growth in the US and in countries of their origin or heritage.
The Minority Business Development Agency (MBDA) of the US Department of Commerce estimates that the combined buying power of the minority population in the US is around $2.5 trillion. MBDA pegs the combined economic output of diaspora-owned and operated businesses in the US at $1 trillion currently and the number of jobs created directly and indirectly by minority-owned businesses at 16 million.
Participants discussed how the interplay of migration, culture, technology and economics is shaping a world that is less defined by a zero-sum game of winners and losers, but more by integration, interconnectedness and interdependence that offers the potential to create value globally. Along with this comes the growing concept of universal kinship, powered in large measure by diaspora communities whose hyphenated identities enable them to contribute to their country of origin and the country in which they live or have lived through entrepreneurship, volunteerism, mentorship, philanthropy and diplomacy.
The United Nations estimates the global diaspora population at 214 million, which would hypothetically make them inhabitants of the fifth most populous country in the world. Of this, the size of the US diaspora is 62 million. The Indian-American diaspora, which consists of People of Indian Origin (PIOs) and Non-resident Indians in the US (NRIs), is 2.8 million per the US Census data for 2010.
“By tapping into the experiences, the energy, the expertise of diaspora communities, we can reverse the so-called brain drain that slows progress in so many countries around the world, and instead offer the benefits of the brain gain,” said Hillary Rodham Clinton, US Secretary of State, who was keynote speaker at the conference. She was alluding to the concept of the loss of intellectual capital in areas of the world from where people migrate.
That concept has since given way to terms such as brain gain, brain bank and brain circulation in the context of the diaspora’s transferable skills and knowledge across multiple geographic boundaries. (The International Organization for Migration and the Migration Policy Institute's 2012 handbook provides information on how governments, including India, are promoting these concepts. Click here to read more )
“Now, in terms of international development and our work to reduce poverty and improve lives, this can be a game-changing effort,” she said. “But that is not all. It is also a recipe for spurring greater economic growth in the United States as well. And it holds the promise of advancing strategic interests like rebuilding societies after conflicts or disasters and improving relations with key countries.”
As an example of how diaspora entrepreneurs create economic opportunities for the US and their countries of origin, Clinton talked about a recent trip to Hanoi, Vietnam, with a delegation of American businesses.
“The business leaders were all buzzing about the opportunities they are discovering in Vietnam’s burgeoning market. But a few savvy entrepreneurs were clearly way ahead of the curve. One was Jonathan Hanh Nguyen. He had left Vietnam as a young man, lived in the Philippines, and then studied in the United States, and when relations between America and Vietnam opened up in the 1990s, he was one of the first to see the economic potential. And he built a thriving business bringing well-known American brands into the Vietnamese marketplace, from designer clothing to fast food pizza, creating in the process thousands of jobs and bringing our countries closer together,” Clinton said.
In the area of soft diplomacy, Tara D Sonenshine, the Under Secretary of State for Public Diplomacy and Public Affairs at the US Department of State, talked about her mandate to strengthen people-to-people connections between the US and other countries.
“The diaspora community is central to our efforts,” she said. (Click here to read Sonenshine’s interview in Forbes India on how the Indian-American diaspora is an important voice in strengthening Indo-US people-to-people ties).
Romi Bhatia, Senior Advisor for Diaspora Partnerships, Global Partnerships Division, USAID, discussed opportunities in promoting public-private partnerships with diaspora communities to enhance economic development initiatives. For example, leveraging the efficiency of Indian-American entrepreneurs in Silicon Valley to promote economic development in India. (Click here to read Bhatia’s interview in Forbes India on how the USAID is engaging the Indian-American diaspora to leverage social development goals).
US government officials discussed their strategy to build long-term economic opportunities for the US in developing countries through diaspora entrepreneurs.
During a breakout session at the US Department of Commerce, Steve Glickman, Director for International Economic Affairs, National Security Council at the White House, pointed out that the goal of the National Export Initiative of 2010 is to double US exports in five years.
He asked the group of immigrant minority-entrepreneurs what the government could do to leverage diaspora communities to grow exports. According to data from 2007, the US Census Bureau estimates that minority-owned businesses in the US are three times more likely to export.
Glickman said diaspora entrepreneurs have a natural advantage in exporting and expanding operations in countries of origin because they understand the culture, speak the language, are knowledgeable about the local business and policy environment and have local networks.
He said that in addition to gaining economic benefits from exports, the goal is to promote what he referred to as economic statecraft – building trading relationships with companies and other governments, which would lead to better bilateral foreign relations.