Medical Tourism in Developing Countries

Promoting Medical Tourism ● 109Lastly, there is a new migration that has emerged that might have longtermeffects on the development of medical tourism. There is evidence ofyoung Americans going to “Booming Bangalore” in search of IT jobs andviewing this as a smart career move. 48All these forms of migration bode well for the medical tourism industryinsofar as the brain gain translates into the skilled labor force needed to fuelthe nascent industry.Advantage III: Domestic Research and DevelopmentTechnological change entails new, improved, and cost-saving ways of producingold products, as well as the production of entirely new products.Sometimes technological change results in higher output using the samequantity of inputs. More often than not, it entails labor-saving progress inwhich higher levels of output can be achieved with less labor: computers,mechanical threshers, automated looms, and high-speed electric drills areall examples of inputs that are more productive than manpower. Indeed,labor-saving technology has drastically increased worker productivity, asthe average West European today is some 20 times more productive thanhe was in 1800. 49 Societies with abundance of entrepreneurs and inventorsare the ones most likely to develop, introduce, and profit from such productivetechnological innovation. 50 For this reason, developing countries suchas India and China are seeking not only to increase production, but also toincrease their capacity for technological change (in other words, they wantto design, not to copy other countries’ designs 51 ).Given the highly technical aspects of medical tourism, especially withrespect to invasive procedures and diagnostic services, being the source oftechnological innovation is crucial (although it is easier to receive technologyfrom the outside than produce it at home, such technology is often obsoleteand cannot be used in medical tourism). The ability to do that is tied closelyto the quantity and quality of research and development. Grossman andHelpman claim that research and development (R&D) is positively relatedto economic growth as it enables the increase in both quantity and qualityof goods produced. 52 The United States spends more on R&D than the nextfive countries combined. 53 Of the world’s new investment in R&D, thedistribution is as follows: 42 percent is in the United States and Canada, 28percent in Europe, 27 percent in Asia and 1 percent in Latin America. 54With respect to expenditure on R&D, Israel spends 5 percent of its grossdomestic budget, the United States almost 3 percent, and South Korea 2.5percent. 55 Moreover, according to UNCTAD, multinational corporations