2 minute read

Does restricting immigration really have an impact on business?

Restricting immigration is not just about reducing business access to a global talent pool. It also affects the brand of the country imposing restrictions – and that could have economic consequences for many years

Statue of Liberty

Setting aside any political perspectives, what is the impact on business when limiting immigration? The latest developments in the United States of America and current and proposed policies by other governments to restrict immigration pose that critical question. While under pressure from many in their home population to deal with the perceived threat of immigration, governments are considering possible options in response. But even if reasonable in the current application could they be creating a longer term problem? How do you enable access to the talent you need and keep out potential terrorists?

The recent events in the US show that business may see broad and non-focused immigration controls as a threat to their ability to grow, develop and attract talent. The significant number of high tech and other organisations opposed to the initial executive order in the US shows a serious level of concern.

The impact of the controls is likely to apply in two key areas; the immediate issues and the future impact.

Immediate issues: employees from the targeted countries have been blocked from entry to the US. This means that any employees from the relevant countries who do not have residency in the US will be unable to enter or, if in the US now, once they leave be unable to return. For global organisations, academic institutions or others with a global network critical to success citizens of those counties are potentially blocked from delivering a full contribution. From the political perspective these measures are unlikely to affect organisations that are US-centric and who recruit few from outside the country and so are less likely to feel any impact, eg mining and steel, which president Donald Trump has focused on.

Future impact: Global organisations recognise that to be the best in the world they need to attract and employ the best in the world irrespective of their nationality. Restricting access to the global talent pool could potentially mean that they are unable to access the full market of talent. But there is a potential additional effect driven from the individual's perspective, a change in perception of the brand of the country imposing restrictions. Why should you look favourably on a country which takes a negative view of your home country as a whole?

This could make those from such countries currently in the US consider leaving and those in the home country not to wish to go to the US in the future if restrictions are lifted. There is also likely to be a change in government attitudes to the US as a result. Further if the restrictions are felt to be targeting one group irrespective of stated aims, then that may mean that anyone from that group may review their perspective of the US. Countries, just as organisations, have a brand and this could have a negative impact on the US brand which may have unseen negative economic consequences for many years to come.

Given the massive social migrations due to conflict and economic differentials, some immigration controls have to be put in place to control the potentially vast impact that unfettered migration could cause. That said any controls need to be seen to comply with international law, for example Geneva Conventions, and be equitable and reasonable.

They also need to be business friendly – enabling free movement of talent but maintaining security. That is a challenge given the unstated demand from some populists of nil immigration. Nil immigration has never happened in the past and is impossible in a globally connected world. History suggests that terrorists have a habit of using false documentation and travelling via stable third countries, which makes country specific restrictions unlikely to be fully effective anyway.

Governments need to be open, honest and factual about the real issues, not pander to the politics of exploitative populist demagogues, and must keep in mind the needs of business as well as security.

Chris Roebuck is visiting professor of transformation at Cass Business School and a regular PS Contributor

Controls need to be business friendly – enabling free movement of talent but maintaining security

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