Brain Drain From Smaller Cities, and Why Some Founders Stay Leave, Learn, Return

The best graduates often leave. Research shows the loss is real but not the whole story, and some founders build where they grew up.

Picture a classroom of twenty final-year students in a mid-sized city. Ask who plans to move to a bigger city or another country after graduation. Most hands go up. Now ask who plans to come back. A few hands, maybe.

That picture is a thought experiment, not a survey. But the pattern behind it is real, and economists have a name for it. I read up on it because I wanted to understand both sides: what a place loses when its best people leave, and why some founders choose to stay anyway.

What "brain drain" actually means

The idea is called human capital flight. It means people with advanced training, often a university education, leaving their home region or country. When the receiving place gains, people call it "brain gain." When the sending place loses, they call it "brain drain." Wikipedia's summary notes that some scholars prefer neutral words, because "brain drain" suggests that leaving is always harmful.

The same summary lists three kinds. One is organisational: talented staff leaving a big company. One is industrial: skilled workers moving between sectors. The third is geographical, and that is the one I care about here: graduates leaving the town or region where they grew up.

The reasons are not mysterious. The usual list has push factors, such as fewer opportunities or weak local jobs, and pull factors, such as better pay, better living conditions and bigger networks. Then come personal reasons: family abroad, career plans, plain curiosity. Nobody should be blamed for following a better opportunity.

The honest numbers: it is not all loss

Here is what surprised me. The research is mixed. It does not say that leaving is simply bad.

On the loss side, the summary reports that the economist Frederic Docquier argues human capital flight harms most developing countries, though not all of them. It also reports an IMF finding that the exit of highly skilled workers from Eastern Europe slowed productivity growth and income catch-up within the European Union. And it gives a very concrete case from Ghana: 448 doctors, about 54% of those trained between 1999 and 2004, left to work abroad. When more

On the gain side, the same summary lists several studies. In a lottery that let people from Tonga move to New Zealand, winners had incomes 263% higher after one year than people who entered and lost. A 2014 survey estimated that when 10% of workers leave, wages for those who stay rise by about 2% to 5.5%. A 2021 study found that the chance for Filipino nurses to work abroad produced a net gain in skills at home. And

I would not treat any one of these as the final word. They are studies of different places and different times, and the summary itself says the evidence on money sent home is mixed. But together they say something useful. The question is not "does leaving hurt?" The better question is "what comes back?"

When people return, or keep the link

The summary also gives examples of people coming back. In Greece, it says about 600,000 professionals left during the financial crisis. Eurostat data from 2025 shows about 350,000 of those who left between 2010 and 2021 had returned. (These two numbers cover different groups and periods, so do not read them as a neat "60% came back.") It also cites Yugoslav refugees who returned from Germany in 1995 and brought skills and technology home, which helped

So a place can gain from people who leave, if there is a path for knowledge, money and sometimes the people themselves to flow back.

The loop only works when there is something to come back to. That is where the founder comes in.

Where the loss is sharpest

Not all departures are equal. The loss tends to hurt most when the people leaving are a large share of a small trained group. The Ghana doctors are the clearest case in the summary: when more than half of one trained group leaves, a whole service can thin out.

The summary lists a few other cases. It says a 2019 analysis linked youth emigration from Italy to lower innovation, while a 2011 study of the same topic found mixed effects: more important inventions, but fewer inventions on average. It also says the emigration rate among Turkish higher-education graduates rose from 1.6% in 2015 to 2.0% in 2024, according to the national statistics office, TÜİK. Those are small percentages, which is a good reminder to

The most extreme example it gives is East Germany. About 3.5 million people, roughly 20% of the population, left by 1961, before the Berlin Wall went up. That is a whole country losing a fifth of its people, very different from a mid-sized city losing some graduates each year. Most places are nowhere near it.

So the first question for any town is not "are people leaving?" It is "who is leaving, how many, and are they the ones we cannot replace?"

The case for a founder who stays

I want to be careful here. I have not found hard data on how many founders stay in smaller cities or how well they do. So what follows is reasoning, not a finding.

Start with cost. Rent, salaries and office space are often lower in a smaller city. Here is an illustration with made-up numbers: if a small team costs 100 a month to run in a big city and 70 in a smaller one, the founder who stays has 30 extra to spend on surviving longer, marketing, or hiring one better person. It is illustrative only, and your numbers will differ. But the logic is simple. Lower costs buy

Next is competition for talent. A founder in a smaller city is not fighting ten other firms for every good hire. A person who wants to stay near family may take a role that is interesting but not the highest paid. That is a real edge, as long as you actually offer room to grow.

Then there is trust. In a smaller place, people know each other. A good reputation travels fast, and so does a bad one. That helps if you run a clean business and hurts if you do not.

The risks are just as real. A smaller city may have fewer customers, fewer investors and fewer people who have done what you are trying to do. You may have to sell outside the city from day one. For many founders the practical answer is to live in the smaller place and sell to the wider world. That is easier now than it used to be, because customers can be reached online, but it still takes work.

Three small things a founder can try

These are ideas from my own reasoning, not results from the research above.

Stay in touch with people who left. If someone from your town now works somewhere bigger, they know things you do not: how other companies hire, which tools they use, what customers elsewhere expect. A short, friendly call now and then costs almost nothing.

Offer a real first role. A graduate who can run a small project with real responsibility often learns faster than one stuck at the bottom of a big company. If you can offer that and be honest about the pay, you have something a bigger city cannot easily copy.

Hire from far away, too. If your product does not need everyone in one room, you can hire a good person who has already left, without asking them to move back. That keeps the link alive, and it may turn into a return later.

What this means if you hire

If you hire, you are part of this story. The graduates leaving your town are, in effect, your future team. If your company offers a real career, some will stay, and others may return later with more skills. If it does not, they will go and probably not come back.

That does not mean paying more than you can afford. It can mean clearer growth paths, early responsibility, or a project that gives a young person something to be proud of.

If you are a student or young professional, the useful question may not be "stay or go?" It may be "what do I want to learn in the next five years, and where can I learn it?" For some people the answer is a bigger city. For others it is a strong local firm. Both can be fine.

What I take from this

A simple view is that leaving is just a loss for a place. After reading, I see it as a loop that can break or grow, depending on what the place offers people to come back to. I am trying to ask one question when I think about hiring or building: would a good graduate from here have a reason to stay, or a reason to come back?

Try this week: Write down three people you know who left your city for work. For each, note one thing that might have made them stay, or one thing that could bring them back. Then pick the smallest of those that you can actually do something about.

Sources

• Human capital flight (Wikipedia): all studies and figures in this piece come from this summary, which cites the original research. I did not read the original papers myself.