Immigration and our Global Competitiveness

This week the Ewing Marion Kauffman Foundation will release an important report on globalization and America’s competitiveness. The report, done by researchers at NYU and Harvard including the economist Richard Freeman, will cite the “reverse brain drain” occurring in the U.S. because our crummy immigration policies encourage bright educated immigrants to pack up and go home. Bill Gates has already noted this issue, deciding to expand Microsoft in Canada rather than in the U.S. because of his difficulties in getting visas for talented employees.

Skilled immigrants have created most of America, as we might do well to remember. But that’s anecdotal. According to people who have seen early copies of this study, it has now been documented that fully half of the tech companies in Silicon Valley and a quarter of those started nationwide between 1995 and 2005 were started by immigrants. That’s nothing new. Andy Grove, one of Intel’s founders, was also an immigrant. I’m sure this has been true for more than the past decade.

While politicians argue (or sweep under the rug before the next election) over the 12 million illegal and unskilled workers, this report will document that over a million skilled immigrants are awaiting green cards, lost in limbo. But only 120,000 visas are given per year, and each country only gets 7% of those. That means countries like India and China are beginning to get back their best and brightest, whom they had previously lost to the U.S. Rather than wait six to ten years for a visa, these guys are beginning to get disgusted and are leaving the U.S.

When they get home, they are not only lost to us, but trained to become our competitors. What is the point in training them and then forcing them to leave? This has already happened in the health care field, leading to “medical tourism,” in which Americans go to India and Thailand for surgeries performed by American-trained doctors who have returned to their native countries. These surgeries are less expensive and the care is often better than our own. Is this what we want?

I hope Kauffman does a bang-up PR job on this report, because the CEOs of the large technology companies have, up until now, gotten no traction in Washington. Maybe this will help draw attention to the fact that not every immigrant to America is a member of a Mexican drug gang just interested in our free public education for his ten children.

Disclosure: my son-in-law is currently caught in this immigration limbo. So it hits home for me.

update: the study appears today in Business Week Online