By: Jared Sorin
Many in the U.S. recognize that we truly are a nation of immigrants, but few understand the extent to which the U.S. economy has long been fueled by talent that comes here from abroad. Immigrants are increasingly the driving force behind innovation, research and development and are far more likely to start companies. Unfortunately, however, political debate on the role of immigrants in America far too often finds immigration policies in place that make it difficult for them to stay or and even actively disincentivize them to do so. Currently, the annual demand for visas greatly outweighs the supply, causing would-be entrepreneurs – and the valuable ideas, jobs, and wealth they create – to return to their home countries.
There is no doubt that immigrants make a huge positive economic contribution to the U.S. In fact, 40% of Fortune 500 companies were founded by an immigrant or the child of an immigrant. According to Dow Jones VentureSource, 48% of America’s top 50 venture-backed companies have at least one immigrant among their founders. Currently, 20% of the CEOs of Inc. 500 companies were born outside the U.S. Finally, among the top ten U.S. universities that produce the most patents, foreign-born inventors are responsible for 84% of information technology patents issued.
The contributions of immigrants attracted to the US must not be understated. Despite the benefits associated with the immigrant population, however, our annual cap for visas is 85,000. That number is wholly insufficient to meet the demand, which is almost four times the available supply. The effect locally is tremendous as the NY metropolitan region has the most H-1B visa requests (requests for workers with specialized skills) in all of the U.S. According to the Brookings Institution, the average annual number of H-1B visa requests in NY in 2010 and 2011 exceeded 52,000, far outpacing the next largest metropolitan region (Los Angeles), in which the demand for such visas averaged just over 18,000.
The results are frightening and do not bode well for our economy, American innovation or entrepreneurial activity. According to Inc.com, many highly educated entrepreneurs and innovators are returning to their native homes. These “returnees” are an educated, entrepreneurial lot. Among Chinese and Indian immigrants returning home, 92% and 78%, respectively, held a master’s degree or a Ph.D. Similarly, 50% of the Chinese immigrants and 57% of the Indian immigrants intended to start new businesses. Of 1,203 Chinese and Indian immigrants, more than half intended to launch new companies. Sadly, after generations of immigrants who saw greater opportunity in the U.S. than in their home countries, 61% of the Chinese immigrants and 54% of the Indian immigrants believe that there are better entrepreneurial opportunities in their home countries than in the U.S. These statistics are a wake up call. We must adopt a rational immigration policy immediately, one that recognizes the vital role of immigrants and incentivizes them to use their skills here, rather than returning to their home countries. If we fail to attract highly educated immigrants and make it difficult for current immigrants to stay, they will leave and utilize their skills in their home countries leading to a decline in “American” innovation and entrepreneurial culture. That is something we can ill afford.