Flight of the Creative Class

Vivek Wadhwa reports on his research which shows how much foreign-born talent mean to the US economy and why US immigration policy is causing many to leave. Money quote: 'We need to do all we can to attract and keep skilled immigrants rather than bring them here temporarily, train them, and send them home."

In over 25 percent of tech companies founded in the United States from 1995 to 2005, the chief executive or lead technologist was foreign-born. In 2005, these companies generated $52 billion in revenue and employed 450,000 workers. In some industries, such as semiconductors, the numbers were much higher—immigrants founded 35 percent of start-ups. In Silicon Valley, the percentage of immigrant-founded start-ups had increased to 52 percent.

When we looked into the backgrounds of these immigrant founders, we found that they tended to be highly educated—96 percent held bachelor’s degrees and 74 percent held a graduate or postgraduate degree. And 75 percent of these degrees were in fields related to science, technology, engineering, and mathematics.

The vast majority of these company founders didn’t come to the United States as entrepreneurs—52 percent came to study, 40 percent came to work, and 6 percent came for family reasons. Only 1.6 percent came to start companies in America. They found that the United States provided a fertile environment for entrepreneurship. Even though these founders didn’t come to the United States with the intent, they typically started their companies around 13 years after arriving in the country.

Most students and skilled temporary workers who come to the United States want to stay, as is evident from the backlog for permanent resident visas. Yet we’re leaving these potential immigrants little choice but to return home. “The New Immigrant Survey,” by Guillermina Jasso of New York University and other leading academics, found that approximately one in five new legal immigrants and about one in three employment principals either plan to leave the United States or are uncertain about remaining. These surveys were done in 2003, before the backlog increased so dramatically.

More here.

Comments

[Dave Reid]

More people need to see and understand these numbers. If the U.S. wants to compete in the future we must dramatically increase the H1B cap. Further programs should be created that, starting very early on to encourage immigrants to come to U.S. colleges and then to stay after graduation.

[Whitney Gunderson]

This problem, and increasing immigration to Cleveland, should be Mark Santo's first priority, as he is the head of The Cleveland Council on World Affairs. According to the article in the Cleveland paper and a July 9 post on this blog, "Cleveland's Talent Blueprint," they want to build an an investment center. God, I wish I was the governor of Ohio. I would fire Mark Santo, rent a cheap old apartment in downtown Cleveland, put in a good high-speed internet network, hire some nice Cleveland kids from the local community college, train them on immigration policy, and get them started on helping highly educated immigrants get proper legal status to stay in this country.... and maybe move to Cleveland. Has anyone saw the movie The Visitor?

[eCurrencyArbitrage.com]

US is very keen in their economical status such that it quiet high always.

[Gary Dare]

"Flight Capital" by David Heenan (link from my byline) is a book that discusses how heading home, or to a third country other than the US, has become attractive to students and professionals who have spent time in the US.

Half of the farewell lunches that I have attended in a couple of high tech companies over the past few years have been for repatriates to India, China, Japan or Europe versus job changes, retirements, or layoff.

A former intern of mine was a UIUC doctoral student who had her mind set to return to India, while her Indian-American contacts in metro Chicago and Silicon Valley told her it was a mistake. She now heads a chip design group for a US multinational and speaks on the conference circuit while many of her old contacts lost their jobs and work in Indian restaurants around the Bay Area or Chicago's Devon Street.

[Gary Dare]

"Further programs should be created that, starting very early on to encourage immigrants to come to U.S. colleges and then to stay after graduation." (Dave Reid) Not only does this go against current US immigration and citizenship policy, but an American immigration lawyer told me once that it's actually against the law to counsel someone to immigrate to the US.

(Corporate transfers do not count under that criterion, I asked that as a follow-up.)