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Is the Nation of Immigrants Becoming a Nation of Emigrants?

Wednesday, October 3, 2012

Vivek Wadhwa on the immigrant exodus that threatens the United States.

Editor's Note: Vivek Wadhwa has emerged in recent years as one of the most influential thinkers on entrepreneurship, technology, and immigration. In his new book, “The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent,” he documents how the United States is experiencing an unprecedented slowdown in the number of high-growth, immigrant-led start-up companies. He discussed America’s immigration landscape with THE AMERICAN’s editor-in-chief Nick Schulz.

Nick Schulz: If a spaceship were to land in the United States and extraterrestrial visitors were to listen to the nation's discussion on immigration, they would conclude America is being overwhelmed by immigrants. And yet you have published a book called The Immigrant Exodus. What's going on?

Vivek Wadhwa: The extraterrestrials would wonder why America is even debating this issue.

As they watched the progression of this land over the past 300 years, they saw wave after wave of immigrants bring new ideas, energy, and culture. They watched the development of the economic miracle that became the United States of America. They were impressed to see America lead the world in values such as freedom, democracy, and human rights. They saw the great advantage that America’s diversity and openness provided its people. They noted that every wave of immigrants that had just landed faced resentment and discrimination from the wave that arrived before, but was eventually accepted—and lauded for making everyone work harder and think smarter. They were delighted to see that new immigrants such as myself who have been speaking up against flawed U.S. government policies aren’t treated as pariahs—they are given national awards for being “Americans by Choice” for their “commitment to this country and to the common civic values that unite us as Americans.”

We only provide 140,000 visas for highly skilled workers. Why not bring in two or three times as many?

The extraterrestrials, who surely regard America as the beacon of hope for humanity, would worry that America was hastening its own economic decline by reversing the immigration policies that have benefitted it, that the land of immigrants was becoming a land of emigrants, and that it was inadvertently strengthening its global competitors. 

NS: What countries are winning the race to capture the world's entrepreneurs? What are they doing differently?

VW: Other countries have learned the secret of America’s success and they are trying to emulate it. No other country has the advantage that America enjoys—of having the world’s best and brightest wanting to come here and being prepared to make great sacrifice to do this. So they have to work harder than we do. Here are some examples that I cited in my book:

Australia: In 2012, Australia raised the annual cap on permanent residency visas for skilled immigrants and their families to 126,000. The United States issues 140,000 employment-based green cards each year for immigrants and their families. The U.S. population is more than ten times larger than that of Australia. Obviously, Australia values employment immigration more highly on a per-capita basis. Unlike the United States, Australia allows regional governments to award preference for specific skillsets and bring in skilled immigrants to meet regional needs.

Canada: The Canadian government assigns applicants number grades based on key factors such as age, education, and work experience. The Canadian immigration ministry can base immigration decisions on economic development goals without requiring legislative change, giving it unprecedented flexibility from year to year on targeting skillsets in immigrants. Foreign undergraduate and graduate degree holders can, upon getting their diplomas, get a work permit for up to three years without having secured a job in advance. To retain students in STEM [Science, Technology, Engineering, and Mathematics] fields, Canada allows PhDs in those disciplines to apply for permanent residency while they are still enrolled in school. And like Germany and Chile, Canada offers visas to entrepreneurs with a viable business plan even in the absence of funding.

China: The Chinese government has a “National Medium- and Long-Term Talent Development Plan” designed to encourage successful Chinese-born expatriates to come home and work or start a business. The program is extraordinarily generous. The most accomplished returnees are eligible to receive low six-figure cash bonuses (in U.S. dollars). Lower-level scientists with Western PhDs but little experience are eligible to receive a bonus in the high five-figures. Expats who return can get housing subsidies or free housing in the Chinese city of their choosing. Returning entrepreneurs also receive multi-year exemptions from business taxes.

Chile: Chileans have implemented a program that I helped design called Start-Up Chile, which gives $40,000 to start-ups led by foreign entrepreneurs to move and set up shop in one of the most magnificent countries on this planet for six months—no strings attached. As part of the package, the Chilean government helps foreign entrepreneurs settle in, provides free office space, teaches them Spanish, and connects them to investors and mentors.

Germany: Historically a country closed to immigration, Germany had many guest workers but little immigration. To deal with growing labor shortages in the fast-growing STEM fields, Germany rolled out a special “green card” program that put in place a fast-track for non-European IT experts to allow them to live in Germany on a temporary basis. Germany also allows senior academic researchers, top-level business managers, and others with particularly high-demand skillsets to gain permanent residency very quickly. Like Chile, Germany has a visa program for start-ups that allows them to come to start their companies legally in Germany without any funding. All that’s required is a credible business plan.

NS: Representatives of both major political parties say they want more skilled immigrants. So what's blocking reform?

Research shows that the majority of entrepreneurs who already returned home are doing better in their home countries than they were in the United States.

VW: Both sides support skilled immigration. What is getting in the way is the plight of the unskilled and undocumented. This is a contentious, toxic issue. The Republican Party will not support legislation that provides any form of amnesty to immigrants who did not enter the country legally. Democrats have been rallying for “comprehensive” immigration reform. In other words, it’s all or nothing. Some Democrats fear that if the skilled immigration issue—which also has broad public support—is resolved, then they will lose critical leverage on the broader issue.

Here is the problem: If we wait another two to three years to resolve the broad immigration issue, the unskilled, undocumented workers will still be here. Sadly, these people have few options. The high-skilled, well-educated doctors, scientists, engineers, and entrepreneurs who entered the country legally will be long gone. These people earn large salaries, pay full taxes, and are in high demand all over the world. As I have discussed in my book, why would they put up with treatment from the U.S. government that many call “insulting” or “humiliating,” when they have much better options? Research shows that the majority of entrepreneurs who already returned home are doing better in their home countries than they were in the United States. The word is out about this and tens of thousands more are returning home every year. This could be a disaster for the U.S. economy and competitiveness.


NS: What are the top three things we should do if we want to make the United States more attractive and welcoming for immigrants?

VW: Unlike other countries that have to offer subsidies and incentives for people to come to them, the United States has to do nothing other than offer a visa. Top engineers, scientists, and entrepreneurs will not only spend their own money to come here, but will also bring their life savings with them and have their friends back home invest in their start-ups here. This is how it has been over the past few decades. This is why 52 percent of Silicon Valley’s start-ups from 1995 to 2005 were founded by immigrants and why Silicon Valley leads the world in innovation. (Sadly, this has changed, as my book details—the proportion of immigrant-founded technology start-ups has dropped significantly in Silicon Valley).

Here are some of the recommendations I make in the book and explain in much greater detail:

1. Increase the number of visas available for skilled workers. We only provide 140,000 visas for highly skilled workers. Why not bring in two or three times as many? 

2. Remove bureaucratic hurdles. To start with, there is a restriction on spouses working. This may come as a shock to most people, but wives of workers on H-1B visas are not only prohibited from working, but in some states, they can’t get driver’s licenses or open bank accounts. Is this America?

3. Create a start-up visa. Allow foreign entrepreneurs to start their companies in the United States rather than abroad.

NS: Who are your philosophical and intellectual influences?

VW: I don’t have any one person that has influenced my thinking, and I am neither on the left nor right. I take input from many great people and try to learn from every failure and every success. Ever since coming to America, I have been enamored with this land’s ideals and values. I have been working as hard as I can to assimilate these and to give back to this nation. That is why I do research, and that is why I wrote the book. My worry, as I said in the book, is that with our immigration policies, “we have not only blocked the flow of the very lifeblood that built the economic bone structure of this great country, we have also deadened the nerve endings that create the next great thing. If we restore this flow, we restore our nation.”

Nick Schulz is the editor of THE AMERICAN.

FURTHER READING: Schulz also writes “Mobility Matters: Understanding the New Geography of Jobs,” “Here’s How to Replace the Income Tax,” and “Innovation, Risk, and the ‘Most Hated Book of the Year.’” Madeline Zavodny discusses “Immigration as Economic Renewal.” Rohan Poojara says “The U.S. Shouldn't Wait to Fix Immigration for Skilled Workers.” Michael R. Strain adds “Stapling Green Cards to Diplomas: Time to Make This Cliche a Law.”

Image by Dianna Ingram / Bergman Group

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