Startup Act 2.0: Could it be an immigration breakthrough?
Startup Act 2.0 sponsors aim to build a new case for immigration reform. Their point: America has a deficit of employees with skills relevant to an economy built on innovation – and new immigrants can help.
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Adding to the strain, America has a deficit of employees with skills relevant to an economy built on innovation. That's an economy fed by the talents of workers in STEM fields. But by 2018, the US faces a deficit of 230,000 STEM workers, according to an analysis by the Partnership for a New America Economy and the Partnership for New York City.Skip to next paragraph
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Immigrants with STEM skills – and, often, graduate degrees from America's colleges and universities – "put an awful lot of brain power into new markets," says Charley Polachi of Polachi Access Executive Search, a Massachusetts-based firm that conducts executive searches for a variety of high-tech companies.
"A lot of the best innovation is done by newly minted students," Mr. Polachi adds, "that haven't had a lot of bad experiences working for corporate America so they go out and do things that they otherwise get told they couldn't do."
So America needs workers, and it needs STEM workers particularly, the argument goes. But the next piece is what really drives the immigration question home: what those workers do once they've reached the United States.
Research shows that immigrants provide important fuel to America's economic engine. The line of thinking goes like this. Between 1980 and 2005, startups (businesses less than five years old) created an average of 3 million jobs per year and accounted for nearly all net job creation during that time. Immigrants, research suggests, are disproportionately likely to be in the entrepreneurial mix.
Of the current Fortune 500, more than 40 percent were founded by a first- or second-generation American. While immigrants are 12 percent of the US population, they account for a quarter of the nation's Nobel Prizes and patent applications, according to the Partnership for a New American Economy survey. Nearly half of the top 50 venture capital-backed companies in the US last year had at least one immigrant among their founders.
And the outcome? A study by Partnership for a New American Economy and the American Enterprise Institute found that every immigrant with a graduate degree from a US university working in a STEM field creates 2.62 subsequent American jobs.
The risk to not adjusting America's immigration policies? The US, with its high-powered higher education system and massive economy, is the world's most powerful magnet for global talent. Immigration to America accounted for 27 percent of all global immigration flows, the most by far of any nation, according to the Organization for Economic Cooperation and Development (OECD). But Feinblatt worries that without immigration reforms, the US is going to slip in attracting top global talent, particularly as its hospitality to entrepreneurs drops as it has from first in the world to 13th in recent years, according to the World Bank.
"The real difference you see between what is going on in the US and what other countries are doing is that other countries are recognizing that immigration, just like infrastructure or taxation or research and development is part of their economic policy," he says. "We are not integrating it into our economic policy."