Three Longs & Three Shorts

Why Immigration Drives Innovation

Author: Joseph Henrich
Source: Evonomics (

Research is increasingly demonstrating the benefits of diversity within a team or an organisation, particularly when it comes to creativity and innovation. This piece in Evonomics by Prof Joseph Henrich at Harvard University, applies the concept at the economy level relating immigration and its benefits to the economy. Henrich cites studies which showed significant drop in patents in the years following the 1924 Johnson-Reed act which tightened immigration in the US. Not just overall patents to which Eastern European immigrants had contributed immensely, even patents from American scientists declined – “American scientists lost the insights, ideas and fresh perspectives that inevitably flow in with immigrants.”
“Before this, from 1850 to 1920, American innovation and economic growth had been fueled by immigration. The 1899 inflow included a large fraction of groups that were later deemed “undesirable”: e.g., 26% Italians, 12% “Hebrews,” and 9% “Poles.” Taking advantage of the randomness provided by expanding railroad networks and changing circumstances in Europe, a trio of economists—Sandra Sequeira, Nathan Nunn and Nancy Qian–demonstrate that counties that ended up with more immigrants subsequently innovated more rapidly and earned higher incomes, both in the short-term and today. The telephone, hot blast furnace, screw propeller, flashlight and ironclad ship were all pioneered by immigrants. The analysis also suggests that immigrants made native-born Americans more creative. Nikola Tesla, a Serbian who grew up in the Austrian Empire, provided George Westinghouse, a New Yorker whose parents had migrated from Westphalia, with a key missing component for his system of electrification based on AC current (Tesla also patented 100s of other inventions).
…U.S. immigration is but one example of how the interactions of many diverse minds—our collective brains—drive innovation and ultimately economic growth. Contrary to the myth of the lone heroic genius, nearly all innovations—including U.S. patents—arise through the recombination of existing ideas, practices, techniques and ways of thinking, often with a large dose of serendipity. For example: as a new graduate student at Stanford, Larry Page took a guided tour of San Francisco lead by a second-year graduate student, Sergey Brin, a Russian Jewish immigrant. Working together, Page and Brin delivered Google to us by combining existing web-crawlers with page-ranking by popularity, an idea inspired by academic citation counts (both inventors had professors as parents). Collective brains fire up when a network of individuals with different skills, training, customs and ways of thinking interact and freely share what they know, believe and can do.
The collective brain explains why larger and denser cities produce so many more innovations per person and why geographic proximity, communication technologies (e.g., writing), social ties and professional associations spur both innovation and scientific progress. Similarly, focusing on societies without cities or industrial technologies, the collective brain helps explain why more populous and better-connected Pacific Island societies, at the time of European contact, tended to have larger and more sophisticated fishing technologies.”