The Entrepreneurs We Can't Afford to Lose

WASHINGTON POST (Blog)

By Robert Litan

July 11, 2012

http://www.washingtonpost.com/national/on-innovations/the-entrepreneurs-we-cant-afford-to-lose/2012/07/11/gJQAwru8cW_story.html

Robert E. Litan is vice president for Research and Policy at the Ewing Marion Kauffman Foundation.

Immigrant entrepreneurs have not only helped build the U.S. economy and, by extension, the country, they hold the key to our future success.

We already know from the pioneering research of Singularity University vice president and Washington Post columnist Vivek Wadhwa and Berkeley’s School of Information Sciences dean Annalee Saxenian how important immigrants have been to the high-tech community.

Echoing a theme developed in an Oct. 2011 e-book by MIT economists Erik Brynjolfsson and Andrew McAfee titled Race Against the Machine , Wadhwa has also argued that this century promises even more rapid technological innovation than the last one. Across multiple fields — genomics and medicine more broadly, artificial intelligence, and robotics — the exponential power of computing promises innovations we cannot yet conceive of but seem very much within reach based on past trends.

But scientific advances alone do not translate into improved standards of living without entrepreneurs to realize their commercial potential. Immigrants in the recent past have been so crucial to our tech success due to skills — often acquired at American universities — in science, technology, engineering and math (STEM). So, surely it is not unreasonable to project that they will be crucial to achieving the breakthroughs made possible by continuing advances in information technology.

Here is the question: Will we have enough immigrants, along with technologically sophisticated, U.S.-trained scientists and entrepreneurs, to realize the optimistic future that awaits us?

Current immigration law makes that doubtful. Aside from the well-publicized 65,000 annual cap on H1B “temporary” six-year visas, which are useless for qualifying immigrants who want to start a business and remain in the United States, current law counter-intuitively sends many immigrants who earn STEM degrees at U.S. universities each year back to their home countries. These are among the most highly skilled individuals we train. They would not only be useful to new and established businesses, but their immigrant backgrounds suggest they will be especially likely to start new companies employing other Americans.

Speaking of immigrant entrepreneurs, current law also puts a tight limit on the EB-5 visa reserved for immigrants who launch businesses in this country. They are only awarded the visa if they bring $1 million with them (or $500,000 if the business is started in a low-income area). This policy is even less justifiable than the other limits on skilled immigrants, since individuals coming here to launch businesses cannot take jobs away from any U.S. citizens, but can only create jobs for them as their firms grow.

Fortunately, there is growing bipartisan sentiment to lift these restrictions. As part of the Startup Act 2.0, backed by Republicans and Democrats in both the Senate and House, 50,000 new green cards for foreign graduate school graduates from U.S. universities with STEM degrees would be created annually and another 75,000 green cards would be authorized for immigrants establishing new businesses here and who meet certain minimum investment and hiring benchmarks.

Up to now, sensible immigration reforms like this have been held up because of reluctance on the part of members in both chambers, as well as the Administration, to split off opening the doors wider to skilled legal immigrants from doing something about the 11 million less-skilled illegal immigrants.

Yet the backers of the Startup Act 2.0 and other far-sighted members of Congress who have offered proposals to expand green cards for STEM graduates and immigrant entrepreneurs in stand-alone legislation realize what I believe is a consensus within the general public – or one that is readily formed with enough political leadership – that more skilled, legal immigrants will only be a boon for this country.

The Kauffman Foundation released a video that puts a human face on immigrants who want to come here and realize their entrepreneurial dreams. When married with clear statistical evidence and anecdotes about the past and likely future contributions of such individuals to our economy and society, these stories can help bold leaders convince any doubters that the time for reforming immigration policies toward skilled immigrants is long overdue.

Perhaps it will take these human stories to help convince the politicians to take the risk.