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The Obama administration recently announced that it would stop deporting young illegal immigrants who entered the United States as children if they satisfy certain requirements. The desirability of such a welcoming gesture may be open to question in an election year, but what ought not be in question anymore is that we need welcoming gestures to attract foreign entrepreneurs into the United States.
Consider what some other nations do to attract entrepreneurs to their shores. According to The Economist, as long as one invests $77,000 and the source of this money is British, the United Kingdom grants three-year visas to foreigners with ideas. In Singapore, the investment threshold is even lower. Foreigners with ideas who invest $40,000 from any source are granted one- to two-year visas to set up shop in Singapore. Even Chile is entrepreneur-friendly! Not only does Chile not require any initial monetary investment, but its government helps foreign entrepreneurs establish themselves by paying $40,000 and taking no equity in the resulting entrepreneurial ventures.
By way of comparison, what do we do in the United States? Very little, to put it succinctly. We have no visa category for foreigners who wish to come to the United States to set up one or more companies. What we do have is a visa for investors, but the requirements for qualifying for such a visa are so onerous-for example, one generally needs an initial investment of $1 million-that the annual quota of 10,000 such visas is rarely filled.
The problem for the U.S. is more acute because while we do not have any visa category for entrepreneurs-in contrast to nations like Australia and Canada-our immigration laws are based primarily on family reunification. In this era of globalization, what we need are immigration laws that grant points to potential immigrants based not on their family status but on the skills they possess, particularly in science, technology, engineering and mathematics, disciplines in which an insufficient number of Americans have advanced training.
There is no gainsaying the fact that Americans are our first priority, and our immigration and workforce policies ought to be crafted with this principle front and center. However, recognizing this does not mean that we cannot also be strategic about our national interest. Competition for entrepreneurs in particular and talent more generally is now global, and our competitors are doing a lot more than we are to be hospitable to foreigners with ideas.
The Economist recently reported that the share of permanent U.S. visas granted for economic as opposed to kinship reasons fell from 18 percent to 13 percent between 1991 and 2011. In contrast, this share rose from 18 percent to 67 percent in Canada. The United States will not be globally competitive for very long with such statistics.
Fortunately, the picture isn't entirely saturnine. A bipartisan group of senators has recently proposed legislation called the Startup Act 2.0, whose objective is to make the United States an attractive place for entrepreneurs. This act seeks to create a new visa category for foreign entrepreneurs looking to start businesses in the United States with American workers. In addition, this bill also endeavors to create a new visa category for American-educated foreigners with advanced degrees so they can stay here and strengthen our economy. Similar legislation is also being considered in the House of Representatives. One can only hope that this measure actually becomes the law of the land.
Amitrajeet A. Batabyal is the Arthur J. Gosnell professor of economics at Rochester Institute of Technology; these views are his own.7/6/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email firstname.lastname@example.org.