Why Immigration Drives Innovation

Economic history reveals one unmistakable psychological pattern.

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By Joseph Henrich

When President Coolidge signed the Johnson-Reed Act into law in 1924, he drained the well-spring of American ingenuity. The new policy sought to restore the ethnic homogeneity of 1890 America by tightening the 1921 immigration quotas. As a result, immigration from eastern Europe and Italy plummeted, and Asian immigrants were banned. Assessing the law’s impact, the economists Petra Moser and Shmuel San show how this steep and selective cut in immigration stymied U.S. innovation across a swath of scientific fields, including radio waves, radiation and polymers—all fields in which Eastern European immigrants had made contributions prior to 1924. Not only did patenting drop by two-thirds across 36 scientific domains, but U.S-born researchers became less creative as well, experiencing a 62% decline in their own patenting. 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).

In ending the quotas imposed under the Harding-Coolidge administration, President Johnson remarked in 1964 that “Today, with my signature, this system is abolished…Men of needed skill and talent were denied entrance because they came from southern or eastern Europe or from one of the developing continents…” By the mid-1970s, U.S innovation was again powerfully fueled by immigrants, now coming from places like Mexico, China, India, Philippines and Vietnam. From 1975 to 2010, an additional 10,000 immigrants generated 22% more patents every five years. Again, not only did immigrants innovate, they also stoked the creative energies of the locals.

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.

Over the last millennium, the expansion of the collective brain can be seen in the acceleration of innovation in Europe and then around the world. Beginning in the High Middle Ages, European cities began growing and proliferating as rising rivers of commerce wove them into networks. Mobile artisans, merchants, monks and scholars flowed into urban centers, bringing their know-how to different workshops, banks, guilds and universities. After 1450, printing presses began to pour out books and pamphlets, and with the Protestant reformation, a growing number of people learned to read—connecting even more minds across space and time. Public libraries, postal services and the Encyclopédie connected together the minds of scientists, engineers and tinkerers. On the eve of the Industrial Revolution in 18th century Britain, counties with more ‘philosophical societies’—social clubs interested in new ideas—generated more patents each decade and more award winners in the 1851 World’s Fair.

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Underlying large and densely interconnected collective brains lie an unusual cultural psychology, a set of motivations, beliefs, attitudes and dispositions. These include an openness to outsiders, a willingness to trust strangers, a readiness to embrace novelty and a deep individualism—a commitment to judge oneself and others based on personal attributes, intentions and achievements over ethnic affiliations, family relationships, religions or castes. In medieval Europe, forces favoring greater tolerance can be discerned by the fact that urban centers that maintained their Jewish communities—e.g., avoiding pogroms—tended to expand and prosper: intolerance was costly. Later, in colonial America, William Penn’s experiment with religious freedom attracted Quakers, Jews, Huguenots and Amish into Pennsylvania, which led Philadelphia to flourish relative to its less tolerant rivals like Boston. In late 20th century America, cities more willing to celebrate diversity, captured by the Bohemian (artists) or Melting Pot Indices, were more innovative relative to their similar, but less open-minded, competitors.

Where did this cultural psychology come from and why does it change over time?

Surprisingly, the medieval Roman Catholic Church appears to have unintentionally played a substantial role in altering people’s social worlds in ways that opened the door to new psychological patterns. The Church, throughout the Middle Ages, promulgated a package of prohibitions and prescriptions surrounding marriage and the family—including broad incest taboos on marrying even distant cousins—that slowly dissolved the kindreds, clans and family networks of Europe, eventually leaving mostly monogamous nuclear households. Expelled from the security and constraints of tight kin networks, individuals were compelled to form new voluntary associations, including guilds, charter towns, free cities and universities, that provided personal security, mutual insurance and a more individualistic sense of identity.

To attract members over their competitors, these associations increasingly adopted impersonal norms and impartial principles that endowed people with individual rights, obligations and privileges. In a dynamic process, through centuries of intergroup competition, cultural practices, beliefs and worldviews were pushed toward expanding the social circle in ways that nourished the collective brain. While setbacks were (and remain) numerous, inclinations toward intolerance, mistrust and parochialism declined because they tended to lose in competition to those who were more broad-minded and thus more innovative.

To thrive and compete, as an organization, city or nation, we need to continue to nurture our collective brains by celebrating diversity, embracing novelty and opening our doors to outsiders.

Joseph Henrich is a Professor and Chair of the Department of Human Evolutionary Biology at Harvard University. This piece builds on Professor Henrich’s notion of the collective brain, which he developed in his 2016 book, The Secret of Our Success: How culture is driving human evolution, domesticating our species and making us smarter, and again in his 2020 book, The WEIRDest People in the World: How the West became psychologically peculiar and particularly prosperous.

9 Jan 2021

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