Friday, November 24, 2006

Immigrant Entrepreneurs

November 24, 2006

Everyone knows that Intel, Yahoo, Google, eBay and Sun Microsystems are wildly successful U.S. technology companies. Less well known is that immigrant entrepreneurs played a role in founding each one -- and a whole lot of others.

After an election season that featured an unfortunate amount of anti-immigration posturing, a new study from the National Venture Capital Association is a welcome reminder that foreign workers make their fair share of important contributions to our economy.

Titled "American Made: The Impact of Immigrant Entrepreneurs and Professionals on U.S. Competitiveness," the report found that "Over the past 15 years, immigrants have started 25 percent of U.S. public companies that were venture-backed." These businesses employ some 220,000 people in the U.S. and have a current market capitalization that "exceeds $500 billion, adding significant value to the American economy."

The authors surveyed smaller, private venture-backed companies as well and discovered that nearly half of the founders also were immigrants. Protectionists insist that immigrants "steal" jobs from native workers, but this survey found evidence that these newcomers are more likely to expand the job pool. "[A]lmost two-thirds (66 percent) of the immigrant founders of privately held venture-backed companies have started or intend to start more companies in the United States," according to the report.

Despite these contributions, and the potential for more, U.S. policies today have made it increasingly difficult for foreigners to come here and start businesses. H-1b visas, which go to skilled workers, are capped and tend to reflect not market demand but the political mood of Congress. And of late, lawmakers have been content to raise immigration fears instead of adjusting U.S. policy to fix the problem.

The U.S. currently grants just 65,000 visas annually to foreign professionals in certain fields, such as computer science and biotechnology. This year, as in nine of the past 11, the cap was reached well before the beginning of the fiscal year in which the visas can be used. Earlier this year, Republican Congressman John Shadegg of Arizona introduced a measure that raises the limit and allows it to fluctuate with market demand. The Shadegg bill also would shorten the average wait for a green card, which is currently between five and seven years and a disincentive for these skilled workers to stay in the U.S.

It's unfortunate that so many of Mr. Shadegg's GOP colleagues were more interested in using the immigration issue to help demagogue their way into the minority. They'd have been better off embracing immigration as a major source of American economic vitality.

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