America has always been a nation of immigrants. Ever since the first colonists came over from Europe, wave after wave of people from foreign lands have moved here in search of a better life. But today, we are turning away the best and the brightest among them, and that is hurting the competitiveness of the United States.
Wadhwa, an Indian who lived in the United States as a child and returned as a young man to become a citizen, has already had a successful career as an entrepreneur, having founded two software companies. Today, he works as an academic, writer, and gadfly. He has posts at several universities, including Duke, Singularity, Stanford, and Emory. In the book, he argues that a combination of misguided US immigration policies and growing opportunities in other parts of the world has created a brain drain of innovative immigrants.
He has compiled some convincing evidence of the contribution immigrants make to the high-tech industry in the United States. Among the statistics:
First-generation immigrants or their children had founder roles in more than 40 percent of the Fortune 500, according to a 2011 study by the Partnership for a New American Economy.
A 2012 report by the same organization found that immigrants were responsible for more than one quarter of all new US businesses founded in 2011, even though they make up only 13 percent of the population.
In 2011, immigrants started nearly half of America's top 50 venture-funded companies and are key members of management or product development teams at more than 75 percent of those companies, according to a study by the National Foundation for American Policy. The same study also found that 25 percent of the publicly traded companies created between 1990 and 2005 that received VC funding had immigrant founders.
At the same time, Wadhwa is worried that the talent has begun to flow the other direction. He tells the stories of talented immigrants being forced to go back to their home countries because they can't get green cards or visas. Anand Chhatpar, for example, came to the States from India to get a degree in computer engineering and, in the process, launched two companies. He and his wife applied for citizenship but were denied, even though Chhatpar had been featured in BusinessWeek as one of the "Best Entrepreneurs Under 25."
He is now trying to run both companies, which are located in the US, from Bangalore and starting to hire programmers there instead of in the United States.
While some people in this country complain about US companies moving jobs offshore, here is a talented entrepreneur who would rather have his companies in America, providing jobs here. But this country won't let him.
At the same time, globalization has changed the balance of opportunity in the world. More countries are competing for talent. Developing nations like China are making tempting offers to keep, or lure back, their most talented people. And it's working. Wadhwa describes a trend of Chinese expats who come to the States for education, spend a few years working in high tech, and then return to China to found their own companies. The Chinese call them "sea turtles." They see plenty of economic opportunity, and often a better quality of life, back home. These are talented people who are going East, not West, in search of opportunities.
America is starting to feel the effects. Wadhwa's latest research shows that the proportion of immigrant-founded companies in the United States is declining. In Silicon Valley, it has dropped from 52.4 percent in 2007 to 43.9 percent today.
Wadhwa offers a prescription for fixing the problem, including increasing the number of green cards for skilled immigrants, changing the H1B program, and instituting a visa program for immigrants who want to start companies in the United States. But I doubt that Congress or the administration, whoever ends up winning the election, will have the political will to do much about the problem. Our leaders pay lip service to some of these ideas, but nothing ever gets done.
The so-called "startup visa," which would allow foreign entrepreneurs to found companies in the United States if they could attract a certain amount of venture capital and create a certain number of US jobs, has languished in Congress for two years. Most recently, a bill that would have increased the number of green cards available to foreign students who graduate from a US university with advanced degrees in science and engineering fell victim to partisan bickering, despite bipartisan support. (See: Partisan Quibbling Kills Green Card Bill.)
And with the fiscal cliff looming immediately after the election, there's no reason to think that Congress will be focusing on these issues anytime soon. Even if they do, it may already be too late.
Do you think America is in danger of falling behind in innovation because of the loss of skilled immigrants? What should we do about it?
I believe BO has been "trying" to have a immigration reform. The US should have a more flexible process. The problem now is that right after graduation, students need to get a job, and maybe lose their entrepeneurship - simply because a job might mean a H1B and afterwards, it might mean a Residency and Green Card.
Canada has a system in which immigrant students, after finishing, can opt for residency - independently of having a job. This gives people more flexibility to create, design, innovate.
The "Offshoring Research Network," http://en.wikipedia.org/wiki/Offshoring_Research_Network#Research_partners at Duke University is being sponsored by the planet's most notorious offshoring organizations, led by NASSCOM, the organization of Indian H1B body shops. Also included is Wipro, the International Association of Outsourcing Professionals, and other organizations that strip US jobs and send them to India. Soon after the "Offshoring Research Network" was created at Duke University, Vivek Wadhwa was annointed to the position of "professor" in which Wadhwa does not have to show up for work, and without any justification other than his being an entrepreneur of some mysterious unidentified companies.
Again, you wrote this story without the knowledge of where Wadhwa was an "entrepreneur?" Don't feel bad. Other members of the corporate media have done the same, some calling Wadhwa, "entrepreneur turned scholar."
Wadwha is a flim-flam man, with absolutely NO credentials. He is a snake oil salesman, and the corporate media is just using his fake science to feed the corporate narrative being used to replace highly skilled, well educated US STEM workers with cheap, entry level, submissive third world workers, primarily from India and Communist China.
I feel they are loosing it since everyday you see the skilled migrants for Technology is rising. Every company in the US you see expats working in the technological section. That clearly is a proof to show US is loosing the battle sadly.
Do you have any evidence of this? Can you back up this statement? If so, send me the source of the information. I believe it can be verified that Wadhwa has launched a couple of software companies, at least one of which was VC-backed That makes him a former entrepreneur. And he has appointments at multiple universities.
Tam? You don't know anything about Vivek Wadhwa's fake entrepreneurship? Don't worry, neither does anyone else.
Wadhwa is not an entrepreneur! He is not an academic either. He only became a professor at Duke after NASSCOM, the cartel of Indian H1B body shops, made a significant "donation" to Duke University to conduct some shill science for the benefit of the outsourcers in India.
"But if the company grows, they will still expand the number of U.S. employees for finance, marketing,"
I see! It seems that most congress members don't really understand that the country is falling behind in innovation because of their adversarial policies towards immigrant entrepeneurs.
Vivek made that decision and founded those companies many years ago, in the 1990s I think. One of the points he makes in the book is that it was easier back then, and that companies were able to sponsor more immigrants and reward them for their good work. Post 9/11 and with the bad economy, much of the U.S. public is against this kind of immigration these days.
I don't think that labor is necessarily the issue here. At the startup phase, we're looking at a group of talented people finding funding and starting a business. Sure, they might outsource some of the design and - if they are making a hardware product - all of the manufacturing. But if they company grows, they will still expand the number of U.S. employees for finance, marketing, etc.
Prabhakar, What can I add? You made the case simply and succintly. Several decades from now many would review current events and wonder why our generation made so much hoopla about a lot of things. One of these is likely to be all of the gatekeeping we are doing in immigration, employment and work patterns.
Qualcomm has launched a big push to spread its cellular technology, and thus increase its royalty income, not to mention chip sales, beyond mobile phones.
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Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
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While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
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