Made In America: Foreign Entrepreneurs Who Will Compete Against Us

from the good-to-see dept

While I enjoy reading The New Yorker when I get the chance, it's rare they cover an issue that I'm deeply familiar with. So it's great to see James Surowiecki jump into the pool with an article about the problems with the US's view towards skilled immigration. It's an issue we've been covering for years, and I still can't figure out why people are against opening our shores to skilled immigrants. It often seems like the arguments against it are a mix of just under the surface racism with a healthy dose of ignorance about economics. Skilled immigrants help expand the pie, creating new companies and new jobs, rather than taking away from the market, as some falsely assume.

The Surowiecki piece is a good one in debunking many of those arguments and highlighting why we really need reform to let in skilled immigrants -- because as we keep turning them away, plenty of other countries have been welcoming them with open arms, meaning that they'll be building businesses that compete with domestic companies, rather than building companies in the US. And, even worse, a large number of those that we're turning away are people who were schooled here. So we're building our own competitors -- who want to stay here and help our economy -- and then sending them elsewhere to compete with us. How does that make any sense at all?

Of course, with unemployment here above eight per cent, too little immigration may not seem like a bad thing: surely we need more jobs, not more workers? But this is a shortsighted view. Economies are not static, with a limited set of resources to go around. As the work of the economist Paul Romer has shown, economies grow faster when there is more innovation, and having more smart people in the workforce is a key driver of innovation. And the quickest, cheapest way to get more smart people is to make it easy for them to move here. What’s more, historically there has been a clear connection between immigration in the U.S. and entrepreneurship, with immigrants creating companies (and jobs) at a disproportionate rate. In one famous study, the social scientist AnnaLee Saxenian showed that Chinese and Indian immigrants alone founded a quarter of Silicon Valley start-ups between 1980 and 1998, while a 2007 study found that a quarter of all technology and engineering start-ups between 1995 and 2005 were founded by immigrants. On a larger scale, more than forty per cent of the companies in the 2010 Fortune 500 were started by immigrants or their children.

Of course, the piece also explains why various bills to fix this (even with bipartisan support) don't seem to be moving: "there is no urgency in Washington on the issue, and voter anxiety about the weak economy and the scarcity of jobs gives politicians an excuse for inaction." Basically, some fear mongering among those who don't like "foreigners" during an election season is holding back good and useful policy, much to our own detriment.

Filed Under: entrepreneurs, immigration, immigration policy, skilled immigrants