Thought leaders like Vivek WadhwaSteve Blank and others have helped emerging market countries to walk on the path of knowledge creation by creating programs like Start-Up Chile, an initiative of the Chilean Government to attract entrepreneurs to start their early stage companies in Chile.

From Manila to Moscow to Mumbai, from Shanghai to San Paulo, these cities have a shortage of talent to create the mass of innovation, venture capital & new enterprises required for economic diversification & job growth.  Start-ups need serial entrepreneurs, innovators & seasoned CEOs, yet the number of such candidates is thin in the emerging markets.

Creating this pool of talent will take a generation to achieve on its own, but policy makers, citizens and investors can’t wait that long.  Recommendations to alleviate this shortage include attracting those who left their motherland for greener pastures, and liberalizing immigration policies to attract Westerners and non-Westerners.  Some Governments offer financial carrots to attract talent, e.g., a $40,000 grant for entrepreneurs to start their business in Chile or tax benefits from the Russian Government to locate in Russia; other incentives include lucrative compensation packages.

Monetary incentives alone are insufficient for relocation to succeed without a safety net for smart talent to leave their homes and make the leap of faith to emerging markets & new countries.  While high salaries with the thrill & excitement to create new start-ups in a foreign country appeals to free spirits and the unmarried, moving to an emerging market & uprooting the family is just too high of a risk for most, given the high failure rate of SMEs.

Once a person relocates thousands of miles from their personal network, future employment opportunities available back home diminish rapidly, and jobs on the local market are not readily available to foreigners.  These facts are reasons why multinationals repatriate country & senior managers back home once their work is finished in an overseas assignment.  To attract the human capital for the emerging markets in the numbers needed to make impact, a safety net is needed and must reflect the human dimension of relocation, especially when the culture of failure in emerging markets puts a black mark on a person’s career in these countries.

Next Time, Part II:  The Way Forward