US Immigration policy is harming the primary driver of wealth creation in our country: entrepreneurship.
by Eric Ries
America is in danger of losing its competitive position as the pre-eminent country for innovation and prosperity. Entrepreneurship, the primary engine of our prosperity in the last two decades, is endangered by our immigration policy, which makes it very difficult for some of the brightest and most motivated individuals to stay in our country. Unless we take steps to rectify this situation, we risk a “brain drain” that can severely impact the long-term competitiveness of the United States in the global economy .
Research by preeminent scholars at universities such as Harvard, Duke and UC Berkeley has convincingly shown the contribution of immigrants to our economy. Nowhere is this impact more dramatic than in the technology and engineering industry. For example, over 25% of the technology companies founded between 1995-2005 had a key immigrant founder. These companies produced over $52 billion dollars in sales in 2005, and employed 450,000 workers that year. Similarly, 24% of all the international patents filed in the US in 2006 had a foreign resident as inventor or co-inventor .
While work by these scholars has demonstrated the positive impact of immigrant founders on our economy, our immigration policy actively discourages this trend. Designed primarily to introduce high barriers to illegal entry into the country, these laws make it difficult for highly qualified individuals, including ones that we train at some of our best institutions, to stay in the country. Lack of visas for entrepreneurs, restrictive visas that tie immigrants to employers, and long wait times for permanent residency (up to 10 years) leave many no option but to return to their home country to start their ventures . These are often some of the brightest and most well trained members of our workforce. For example, over 50% of immigrants returning to India and China in recent years have advanced degrees (masters and PhDs), many were educated in the United States, and as a group are statistically likely to start new companies .
Legal reforms that encourage entrepreneurial immigrants to stay in our country are key to ensuring our global competitiveness. While immigrants make up only 12% of the US population, they constitute over 24% of our science and technology workforce, over 47% of our science and technology PhDs, and have founded iconic companies like Google, Yahoo, eBay and Intel. Startups are the lifeblood of our economy: they account for nearly all the net job growth in the US over the last two decades . Unless we take active steps to encourage our smartest, most creative, and most motivated immigrants to start companies in our country, we risk losing unprecedented wealth creation and economic prosperity to other nations.
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