The Economic Value of Relocation of Experts:
Abstract
Global corporate relocation refers to a phenomenon of the global mobility of experts.   Modern industries and services increasingly rely on human expertise to add value to their operations. When this expertise is not available locally, employers frequently import it from abroad. In this article we refer to experts who are being relocated to other countries for a limited period of time, up to two or three years.
 
  The relocation of experts relocation contributes to a country’s economy in both the Micro Level and the Macro Level. The Micro Level refers to the immediate and close impact. Experts may have a large effect on the close environment, such as creating new jobs for locals. We propose some measurement tools to quantify the economic effects.  These tools include the quantity of new jobs, which have been created due to the foreign experts, and the relocation costs for companies, which serve as the lower bound to the value of the relocation of experts to companies.

  An example is a World Bank project in Kyrgyzstan (1998 – 2004), conducted in order to prevent and repair flood damage. 53 foreign experts stayed there for a total of 61 staff weeks.  Thanks to those foreign experts, about 3000 local new jobs were created, equal to about 400 man-years of local workers.

  According to a research conducted by Salt, Mervin and Shortland, 1993, the average cost of relocation of an English expert is about $131,000.
  The Macro Level refers to broader effects – how does the whole country benefit and what are long-term effects? A possible quantification tool could be the effect of bringing foreign experts on the unemployment rate.   

Singapore, with rules and regulations that encourage the relocation of foreign experts to the country, is an excellent test bed to examine the impact of foreign experts on the local economy. Based on empirical data, it was found that a 1% increase in the number of foreign skilled workers in Singapore increases the employment rate of local skilled workers 1.9%, and unskilled local workers’ rate by 0.2%. Furthermore, out of a total of 7.79% average growth per quarter in GDP between 1991 – 2000, foreign skilled workers contributed about 37%. These and additional findings show us the tremendous impact that an open door policy for foreign experts can contribute to local economies.

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