No, I don't mean the so-called 1% -- for various reasons, they aren't leaving. I mean the immigrant entrepreneurs and foreign students at our best universities.
'The great competitive advantage of India is that it draws on the entrepreneurial and creative energy of 1.2 billion people. The great strength of America is that it draws on the entrepreneurial and creative energy of almost 7 billion people.' Indian Media and Tech Entrepreneur, Mumbai India, Spring 2011
In the U.S., our leading companies and universities routinely have teams composed of the best and the brightest from around the world. In America, a typical research team could be composed of (for example) a Pakistani Muslim, an Israeli Jew, a Hindu from India and a Christian from Iowa. In China or India, this would be unusual or impossible.
The U.S. faces increasing competition from other countries, and has relatively few natural competitive advantages that cannot be duplicated elsewhere. One of our few sustainable competitive advantages has been our openness to immigration, but that great American tradition has recently been under assault.
We literally have a situation where the world's best and brightest are educated at our finest schools -- but our immigration policy makes it unnecessarily complicated for them to stay -- precisely when the U.S. most needs highly educated, highly skilled workers to expand its economy.
To cite a few statistics for the U.S., keeping in mind that immigrants are around 15% of the population:
- Immigrants are twice as likely as non-immigrants to form a new business (In 2010, about 30% of new business formation was by immigrants).
- For the period 1995 to 2005, over half of Silicon Valley startups had one or more immigrants as a key founder.
- In 2005, immigrant-founded companies employed 450,000 workers.
- According to statistics collected by the National Science Foundation, foreign students received nearly 60% of all engineering doctorates awarded in the US and over 50% of all doctorates in engineering, mathematics, computer sciences, physics, and economics.
- The future belongs to knowledge workers, who are the real creators of wealth. The US has a structural shortage of high educational attainment workers and can't afford to lose talent. (Unemployment for this group is under 5%, and has been as low as 2%. We need the world's best talent to continue to grow!)
But, as has been widely reported, we don't make it easy for these wealth creators to stay in the U.S.
One proposal aimed at this problem is the 'startup' visa, championed by a group of leading venture capitalists and entrepreneurs. The proposal would modify the existing EB-5 visa to enable non-U.S. entrepreneurs (with funding support from a U.S. investor) to get a visa to start a U.S. company.
For those of you who don't follow the esoteric minutia of our immigration system, the EB-5 program currently allows wealthy foreign investors to receive a green card for themselves and their families by investing in the U.S. Generally, the program is structured to invite passive investment by the foreign investor, but not active participation (i.e., we welcome and reward foreign investors, but not foreign-born entrepreneurs who could use their education, talents and energy to create jobs here).
To remedy this situation, legislation for a 'startup' visa was proposed in the House in December 2009 (i.e., the Employment Benefit Act of 2009). This proposal was joined in February 2010 by the Senate's Startup Visa Act of 2010.
Instead of the visa going to a passive investor -- the proposed legislation allows a startup company founder or entrepreneur (i.e., a job creator, and potentially, the creator of a new industry) to qualify as a visa recipient with a minimum equity investment of $250,000 (at least $100,000 of which must come from an American investor).
This legislation is widely supported by the venture capital industry and high tech entrepreneurs -- some of the major underwriters of growth for our economy.
Leaving aside the specifics of the 'startup' visa, we as Americans should support legislation that: (1) stops the brain drain of American-educated entrepreneurs and researchers, and (2) encourages the creation of high-tech companies (and the founding of potentially new industries) here -- in the U.S. -- rather than overseas.
Sources: The Kaufman Foundation, www.startupvisa.com, BLS, Statistical Abstract of the United States, United States Census Bureau.
Steven Strauss was founding Managing Director of the Center for Economic Transformation at the New York City Economic Development Corporation. He will be an Advanced Leadership Fellow at Harvard University for 2011-2012. He has a Ph.D. in Management from Yale University. Follow him on Twitter @steven_strauss.