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LEADING EDGE - by Vivek Wadhwa

Our Reverse Brain Drain

U.S. immigration policies are sending entrepreneurial talent abroad.


We are mistreating and mishandling engineers who want to join in the American Dream and contribute to our success. - Vivek Wadhwa"It breaks my heart when some of our brightest students — who graduated from the top of their classes in countries like India and China—are forced to leave. There aren’t enough work visas for them, and even when companies want to hire them, the arduous procedure of sponsoring them for a special exemption discourages them from doing so. And if the students want to start their own companies, the chance of approval has been historically even more slim. I have also noticed a distinct change over the last decade in what they say about their opportunities back home. Before, most considered the United States their only option. Now they have good opportunities back home.” This is what Tom Katsouleas, dean of the Pratt School of Engineering at Duke University, told me when I interviewed him for my book.

Yannis C. Yortsos, dean of the Viterbi School of Engineering at the University of Southern California, added that most of his school’s foreign students express a strong desire to stay in the United States for at least a few years after they graduate. But the tide is turning. “We have noted a trend for some Chinese students, particularly those from large cities, to return home as soon as they have good job opportunities at home. Similarly, students from India are also increasingly returning home after they have some work experience,” said Yortsos.

These comments explain the findings of our latest research on immigrant
entrepreneurship.

In 1998, AnnaLee Saxenian, now dean of the School of Information at the University of California, Berkeley, documented that Chinese and Indian computer scientists and engineers were running one quarter of Silicon Valley’s tech firms. I worked with Saxenian in 2006 to update this research. We found that from 1995 to 2005, the proportion of immigrant-founded start-ups in Silicon Valley had increased to 52.4 percent. And the trend that began in Silicon Valley had become a nationwide phenomenon, with 25.3 percent of the nation’s engineering firms being started by immigrants. We also documented an alarming increase in the backlog of skilled immigrants waiting for permanent resident visas: more than 1 million in line as of October 2006. The problem is a shortage of these visas — only 140,000 are available every year for skilled workers of all nationalities. And there is a 7 percent per-country cap. This means that people from high-population countries like India and China get the same number of visas as those from Iceland and Mongolia. Indians and Chinese face waiting times exceeding a decade.

Based on these findings, in 2007, we predicted a reverse brain drain of talent — with highly skilled workers becoming frustrated with the visa situation and leaving the United States.

In our latest research paper, America’s New Immigrant Entrepreneurs: Then and Now, published by the Kauffman Foundation, we report that immigrant entrepreneurship has indeed stalled. The proportion of immigrant-founded start-ups in Silicon Valley has dropped to 43.9 percent and nationwide to 24.3 percent. It is not that Americans are gaining greater opportunities because immigrants are leaving. Kauffman Foundation data show that U.S. entrepreneurial activity has essentially remained stagnant. In other words, the economic pie is becoming smaller.

True, this is a good thing for the global economy. Tech entrepreneurship is booming in countries like India, China, and Brazil. It is being fueled by engineering students returning home from the United States. But we aren’t sharing this talent out of generosity. We are mistreating and mishandling engineers who want to join in the American dream and contribute to our success. As I concluded in my book, “In alienating and locking out skilled immigrant entrepreneurs and inventors, we have not only blocked the flow of the very lifeblood that built the economic backbone 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.”

 

Vivek Wadhwa is a scholar specializing in entrepreneurship and the author of The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent. He is vice president of academics and innovation at Singularity University and is also affiliated with Duke University’s Pratt School of Engineering, Stanford University, and Emory University.

 


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