The Comeback Read online

  These immigrant founders tended to be highly educated—96 percent held bachelor’s degrees and 74 percent held graduate or postgraduate degrees, with 75 percent of these degrees in science, technology, engineering, and mathematics-related fields. The vast majority of these company founders didn’t come to the United States as entrepreneurs—52 percent came to study, 40 percent came to work, and 5.5 percent came for family reasons. Only 1.6 percent came to start companies in America.

  Even though these founders immigrated for other purposes initially, they typically started their companies just 13.25 years after arriving in the United States. And, rather than settling in well-established immigrant gateways, such as New York or Los Angeles, they moved to a diverse group of tech centers across the country and helped fuel their growth.28

  Although remarkable, these results are not surprising. During the last half of the twentieth century, almost every top student in the world wanted to study and settle in America. This created an enormous American talent pool of the best and the brightest. In the 1990s, when I would meet with my counterparts who also ran technology associations around the world, they would complain that the United States was taking their smartest students.

  RISK-TAKERS

  We can say that the success rate of highly motivated immigrants is a result of the U.S. economic system, which encourages risk and rewards success. But I think this only tells half the story. The other half is on account of the immigrants themselves, who, like Sergey Brin’s father, risked everything to build a better life.

  In other words, the type of people who choose to immigrate to the United States is just as important as the economic system they find when landing here. These are the risk-takers of the world. It takes a certain person to leave everything he or she knows behind to come to a strange new land. But that’s just the type of people who have always come here.

  From the founders of our country onward, the pioneering spirit that leads the world is a product of our immigrant background. The early European settlers left behind religious persecution and government tyranny to create their own societies, the frontiersmen of the early Republic carved out a nation from a wilderness, and today industries like Silicon Valley are on the cutting edge of discovering what’s possible. Like the results of the Kauffman Foundation study, none of this is a coincidence.

  This land of opportunity attracts not only the best and the brightest—but also the risk takers who want something better for their children. Our nation is the most diverse in the world. Our national gene pool includes those who hungered for something better and instilled that desire genetically and spiritually in their children. As AnnaLee Saxenian, author of the original 1999 Berkeley study, said in a 2007 interview:

  The advantage of entrepreneurs is that they’re generally creating new opportunities and new wealth that didn’t even exist before them. Just by leaving your home country, you’re taking a risk, and that means you’re willing to take risks in business. You put them in an environment that supports entrepreneurship, and this is the logical outcome.29

  But an immigrant’s ability to add his or her ingenuity to the U.S. economy—creating wealth and jobs—rests on two very important factors: 1.) Do we let him or her in? and 2.) Do we let him or her stay here? Let’s return to the Kauffman Foundation study:

  We found that, as of September 30, 2006, 500,040 individuals in the main employment-based visa categories and an additional 555,044 family members were in line for permanent-resident status in the United States. Another 126,421—who already had job offers—were waiting abroad, a total of 1,181,505 educated and skilled professionals waiting to gain legal permanent-resident status.

  Thus, far more skilled workers are waiting for U.S. visas than can be admitted under current law. Only around 120,000 visas are available for skilled immigrants in the key employment categories. These numbers are particularly troubling when you consider that no more than 7 percent of the visas may be allocated to immigrants from any one country. So, immigrants from countries with large populations like India and China have the same number of visas available (8,400) as those from Iceland and Mongolia. We estimate that more than one-third of the million workers in line for permanent resident visas are from India.

  This means that immigrants from the most populous countries who file for permanent resident visas today could be waiting indefinitely. In the meantime, they can’t start companies or lay deep roots in American society.

  Indeed, the Kauffman study further notes that there’s been an influx in the number of foreign nationals filing U.S. patent applications (337 percent over eight years, to be exact):

  In 2006, foreign nationals residing in the United States were named as inventors or co-inventors in an astounding 25.6 percent of patent applications filed from the United States, a substantial increase from 7.6 percent in 1998. Foreign nationals also contributed to a majority of some U.S. companies’ patent applications, including Qualcomm—72 percent, Merck—65 percent, GE—64 percent, and Cisco—60 percent. More than 40 percent of the U.S. government-filed international patent applications had foreign authors.

  These foreign nationals were doing business within the United States, working alongside American companies, but they weren’t allowed to become Americans. And when they can’t get in, the fruit of their ingenuity and labor goes elsewhere.

  But if they’re doing business in the United States, adding to our companies’ growth, then why does it matter? Because we need these innovative foreign nationals to build their lives in the United States, not simply contribute every once in a while. The immigrants go where the opportunity is, and if they can’t set down roots and build a life, they will move on, taking all that wonderful immigrant spirit with them.

  I can’t say it better than the Kauffman study, so let’s return to it one last time:

  We are on the verge of a reverse “brain-drain.” If the United States doesn’t fix its policies and keep these highly skilled immigrants, India and China will welcome them home. So will countries like Singapore, Canada, Dubai, and Australia, which are opening their arms to skilled immigrants. They will start their ventures in Bangalore or Shanghai instead of Silicon Valley and Research Triangle Park. Our loss will be their gain.

  After September 11, 2001, we flipped a switch and began discouraging this brain fuel for our economy. We pulled back the welcome mat and put up real and perceived barriers to the world’s educated people who previously would have studied or created companies in America. Today, other nations welcome these students, entrepreneurs, and engineers. Our recent reputation for unfriendliness creates an impression of xenophobia and increasingly repels the best and the brightest. This is not only a shame, but it is also harmful to our future.

  As a recent Small Business Administration report notes:

  A direct impact of 9/11 has been felt in the tightening of U.S. immigration policy. Though required due to security concerns and rising domestic opposition to illegal immigration, it has nevertheless affected entrepreneurship in the United States to some extent by controlling the flow of skilled workers into the country. In this respect, countries like Canada, New Zealand, and Australia have all been more pragmatic by giving strong incentives to attract educated, skilled workers to their shores—whether doctors, engineers, or academic researchers—and to keep them there with offers of residency and citizenships. Accompanying a tighter U.S. immigration policy is a growing feeling of disenchantment among large sections of the American population, including the existing immigrant groups, who are at times limited and constrained in terms of opportunities to exploit their potential and skills.30

  We must reverse course and work to attract these future entrepreneurs. Even if we start modestly, just at the university level, we are creating ambassadors of goodwill when they leave. But if we are strategic, we will insist that they stay, even after they get their degree. More than half of the 22,500 doctorates in science and engineering awarded by U.S. universities in 2007 went to foreign nationals.


  Why would we not immediately offer a PhD student citizenship? Because he or she is from a nation that harbors terrorists? Do a background check. Because we’ve filled our quota from his or her country for the year? A doctorate should be an exception to the quota.

  Denying citizenship to our top university students is an insane policy if the United States wants to keep pace with the rest of the developing world. Most countires gladly take the engineers we don’t want. Moreover, if we care about our competitiveness, we will expand the H1B visa program and get the highly skilled talent here rather than forcing our companies to locate their facilities elsewhere in the world.

  According to a recent National Science Foundation report, of 568,000 foreign students who studied in the United States in 2008, 248,000 were enrolled in science and engineering fields. The second highest field in terms of enrollment was business, with 120,000 students.31

  These numbers should drive home the point that it’s no secret why students come to the United States to study: They come because we offer the best science and engineering education in the world. But once here, why would we then send them back home? Why wouldn’t we let them use what we’ve taught them to build wealth and jobs in America?

  Our best hope for economic growth is immigration. According to a 2008 Future of Small Business report by Intuit Inc., immigrants have higher rates of starting a new business than native-born Americans. Remarkably, immigrant men start businesses at a rate that is 71 percent higher than native-born men, while immigrant women are starting businesses at a rate 57 percent higher than native-born women.32

  The report notes:

  Through small business formation, the growth of the U.S. immigrant pool is driving economic growth and success in a number of major U.S. cities. In the “Los Angeles Economy Project,” the Milken Institute reports that the economic recovery of Los Angeles is due in part to immigrants forming new businesses. The local economy is becoming global as immigrants and others use cross-national market knowledge and ties to develop their businesses.

  In addition to the entrepreneurs, we also need the diligent, motivated, hard-working immigrants who did not have the opportunity to receive advanced degrees. A subject of intense controversy today, this group takes the jobs Americans don’t want, even in an economic downturn. Most of them also pay taxes and appreciate what this nation has to offer. Yes, some of them are illegal, but they don’t need to be.

  INCREASING THE RIGHT KIND OF IMMIGRATION

  Proposals on increasing immigration may be the most counterintuitive, and among the least popular in the national debate today. Both union liberals and conservative right-wingers agree that immigration should be limited, even reversed in some cases, because they claim that immigrants are taking jobs from Americans and driving up costs, such as health care. As these two factions are usually also the biggest campaign donors, they have the ear of many politicians.

  One of the most difficult and frankly frustrating discussions I’ve had took place on the air on CNN when I debated Lou Dobbs on his eponymous program. Although styled as a news hour, it was really just a platform given to Dobbs by Time Warner to broadcast an anti-immigrant screed each night. Dobbs played on blue-collar fears of immigrants stealing their jobs. Such xenophobia led Dobbs to argue that closing our borders was the only way to save our economy. This position runs counter to the fact that 95 percent of the world’s consumers live outside of the U.S. and purchase billions of dollars of American-made products each year.

  But the unavoidable truth is that a growth economy requires an expanding population, and the immigrants are the hardest working, most entrepreneurial, and hungriest for success in our society. What the extremes of either wing don’t want to admit is that denying our nation this vital work force is a recipe for long-term economic decline. With that in mind, there are specific actions we should take.

  Enable visas and citizenship for bright and gifted students. We should want the world’s best and brightest to come here. We need to change our visa programs to make it easy for them and to show them they are welcome. Not only should we change the policy that makes all foreign nations the same in terms of visa quotas, but we should also create a separate visa category for bright students and gifted people to get visas. More, we need to let the best and most promising university students stay in the country once they receive their degrees. A university degree should represent a path to citizenship in the United States.

  Allow a quick path to citizenship for entrepreneurs and the financially able. We want the world’s most savvy and innovative people. We want people who can invest and start new businesses. We can create criteria and thresholds for acceptability (e.g., English proficiency, no criminal record, references, etc.), but we need to put out the welcome mat for them. Canada opens its doors to any person who has a net worth of $300,000. I’m not suggesting that wealthy immigrants purchase their visas or citizenships, but I am saying that a portion of our immigration policy should function like a venture capitalist meeting: If we see promise, we should want to invest.

  Create criteria and a process for granting citizenship to qualified immigrants. We want to attract immigrants who will work hard, contribute to our society, learn English, and respect our laws. This means careful screening and even visas prior to citizenship. Every immigrant who wants to stay and become a citizen should be screened. This does not require a big new bureaucracy, but rather empowering American citizens, who could volunteer to sit on committees that determine who should be allowed the privilege of citizenship. Immigrants would apply to these citizenship boards, which would have a degree of oversight and rules applied to them to prevent fraud and abuse. But an immigrant should be allowed to make his or her case.

  Resolve other immigration problems quickly. Our nation is challenged by a large group of people who came here illegally seeking a better life. Some believe this group costs us much more than it can collectively contribute. Others see hardworking people contributing to our society. Both sides are passionate, both sides have valid points, but the hostility of each side to the other has prevented Washington from reaching a solution to our immigration problems. We need to resolve the problem, quickly. The sooner we do, the sooner we can start the business of returning America to the land of opportunity to the world’s best and brightest.

  These individuals did come here illegally, and they impose costs. But they also are generally hard-working and do the dirtiest work in society. Even with our high unemployment, Americans do not line up for these jobs. If illegal immigrants were sent home tomorrow, it would impose huge costs on our nation. If we make them citizens, we are encouraging lawbreaking. In any event, we need to agree that any new citizens from this group establish a proficiency in English, show an ability to hold a job, and have some way of ensuring contrition if there is to be a path to citizenship. We must also put an end to our porous borders. As hard-working as some of these immigrants are, a nation that cannot maintain the integrity of its borders will not be a nation for long.

  Don’t allow entry of all relatives of all citizens. As to other new immigrants, we need to examine the free entry for all relatives. I suggest that we limit entry to blood relatives and spouses of U.S. citizens with financial ability (e.g., pay $20,000 for each immigrant), and that the host relatives be taxpaying citizens. Moreover, we need to assess the practicality of immediate citizenship granted to everyone born in our physical borders. This is now unique to our nation, and it creates perverse incentives for illegal immigration of parents-to-be.

  Make English our official language. Supporting immigration does not mean lessening America. I am amazed that we have not made English our official language. It is not insensitivity to require those who would enjoy the benefits of this nation to learn the customs of this nation. We should not have to “press 1 for English.” If we want immigrants to succeed in this country, having them learn English as a requirement for citizenship will quickly assimilate them into American society.

  Our politic
ians must set aside their demagogic appeals to the electorate for short-term gain and realize the destruction they’re causing to our innovation industry. America is what it is because of our immigration heritage. Without it we will lose our creative fire.

  6

  The U.S. Constitution and the Fire of Genius

  “Next came the Patent laws. These began in England in 1624; and, in this country, with the adoption of our Constitution. Before then, any man might instantly use what another had invented; so that the inventor had no special advantage from his own invention. The patent system changed this; secured to the inventor, for a limited time, the exclusive use of his invention; and thereby added the fuel of interest to the fire of genius, in the discovery and production of new and useful things.”

  —ABRAHAM LINCOLN, Second Lecture on Discoveries and Inventions, February 11, 1859

  PATENTS

  The only U.S. president to hold a patent is Abraham Lincoln. In 1848, in between sessions of Congress, Lincoln was on his way home to Illinois when his boat became stuck on a sandbar. As his law partner, William Herndon, would later recount in his biography of Lincoln:

  The captain ordered the hands to collect all the loose planks, empty barrels and boxes and force them under the sides of the boat. These empty casks were used to buoy it up. After forcing enough of them under the vessel she lifted gradually and at last swung clear of the opposing sand bar . . . Lincoln had watched this operation very intently . . . Continual thinking on the subject of lifting vessels over sand bars and other obstructions in the water suggested to him the idea of inventing an apparatus for this purpose.