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The Case for Immigrant Entrepreneurs and Startups

With the recent introduction of the Startup Visa Act in Congress, the issue of the U.S.’s immigrant “brain drain” has come up fairly frequently. President Obama even referred to the problem in his last State of the Union speech. The brain drain is occurring because bright and hardworking immigrant entrepreneurs living in the U.S. are returning home to their countries because they have given up on the U.S.’s visa process. Stating that the visa process is overly burdensome, time consuming, and restrictive, these talented immigrants are opting instead to continue their entrepreneurial activities at home. As a result, they end up creating jobs and boosting the economy in their home countries rather than here in the U.S.

The Federal Reserve Bank of Dallas’ 2010 yearly report states that the U.S. in fact needs more highly-skilled, foreign-born workers, arguing that these workers actually contribute more to the U.S. economy than take away. In Silicon Valley, in particular, skilled immigrants start the majority of startups, and, thereby, create more jobs. Here are some interesting statistics:

  • Immigrants with more than a high school education contributed $105,000 more in taxes than they used in public services, while lower-skilled migrants actually cost $89,000 more than they contributed in taxes during their lifetime.
  • From 1995-2005, the majority (52%) of startups were founded by immigrants, and, in 2006, foreign nationals residing in the U.S. contributed to 25.6 percent of its global patents.
  • More than one million immigrants were stuck in “immigration limbo,” i.e. waiting for an employment-based green card.
  • 45 percent of medical scientists and 37 percent of computer programmers are immigrants.
  • Immigrants are nearly 30 percent more likely to start a business than are non-immigrants, and they represent 16.7 percent of all new business owners in the United States.

However, because these highly educated and skilled workers cannot obtain visas to stay in the U.S., tens of thousands of them are returning home every year, only to take leadership positions at leading companies and tech startups. According to entrepreneur-turned-academic, Vivek Wadha, entrepreneurship is booming in countries that compete with the U.S., with countries like Singapore and Canada providing government money to support startups and the U.K. successfully implementing a new visa aimed at entrepreneurs and startups.

Because of the U.S.’s outdated immigration policies, the U.S. is at risk of falling behind in the global race for talent. The Startup Visa Act, if passed, should help ease the brain drain and make a profound difference.

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