eBay was founded by immigrant entrepreneur Pierre Omidyar, who became a billionaire at 31. (Photo Credit: Sarah Gilbert/Flickr)
What do eBay, Facebook, Google and Yahoo have in common? These California startups-turned-Fortune 500 companies were all co-founded by immigrants. And a provision in the comprehensive immigration bill, now on its way to the House, would create a whole new class of visas designed to attract entrepreneurial foreigners to the United States.
A larger percentage of California’s economic growth is driven by foreign-born entrepreneurs. One third of all California businesses, and more than half in Silicon Valley, were started by immigrants. However, immigrant entrepreneurship has stagnated in recent years.
Since 2006, 44 percent of Silicon Valley firms were founded by immigrants, down from a 52 percent of companies from 1995 to 2005. This downward trend has the potential to hurt the job creation and innovation machine in California, but reversal requires Washington to stop punting on immigration reform.
For years Silicon Valley has been lobbying Congress to reform our broken immigration system as a means to revitalize our sluggish economy and boost jobs numbers.
“Current laws undermine U.S. competitiveness,” said Sean Randolph, President and CEO of the Bay Area Council Economic Institute. “Skilled and educated immigrants from abroad, many with advanced degrees from U.S. universities, are disproportionately represented in STEM–science, technology, engineering and math–occupations, and in the ranks of entrepreneurs. Our immigration policy should focus on attracting and keeping these valuable people here, not keeping them out or sending them away.”
Faced with strict regulations, immigrant entrepreneurs struggle to obtain visas required to stay and build a business, resulting in the flight of high-skilled foreign talent. Currently, immigrant entrepreneurs can apply for H-1B visas to hire foreign employees but cannot apply for one themselves.
After months of debate and an onslaught of public pressure, the U.S. Senate passed a sweeping overhaul of our nation’s immigration system Thursday. The bipartisan legislation, proposed by a group of senators dubbed the “Gang of 8”, passed by an overwhelming majority, 68-32 in the U.S. Senate, makes it easier for immigrants to kickstart and build a business here.
In an effort to fuel job creation and economic growth, the bill would grant 10,000 temporary “startup visas” to foreign-born entrepreneurs.
Applicants would be required to have secured a minimum investment of $500,000 from U.S. investors. To obtain the three-year visa, entrepreneurs would also be required to create five domestic jobs and generate annual revenue in excess of $750,000.
The passage of the bill couldn’t come at a better time. While previous attempts to create “startup visas” have floundered, other countries like Canada, Chile, and Singapore, hoping to capitalize on Congress’ inaction, have already launched similar programs to lure talent to their respective countries.
The introduction of this new category of visas could potentially create of 1.6 million jobs nationwide, according a conservative estimate by the Kauffman Foundation, a nonprofit that researches entrepreneurship.
The world’s best and brightest flock to U.S. universities but our current immigration system forces many to return home upon graduation. While the U.S. needs to do a better job of training in STEM fields, it’s also in our economic interest to encourage STEM immigrant graduates to stay, start business and create high-tech jobs. The economic contributions of foreign-born entrepreneurs are undeniable.
At the same the U.S. looks to create a more intelligent immigration system, California needs to strive toward making it easier to start and run a business here by increasing access to capital and creating innovation partnerships with universities and industry, among other initiatives of the California Economic Summit. Doing just that and making it easier to recruit top foreign-born talent to start those businesses will help fuel California’s future economic growth and sustainability.
Who knows? The next Google might be started in Vancouver, not Silicon Valley.