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America Drives Out Immigrants, Innovation

The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent

By Vivek Wadhwa & Alex Salkever (Wharton Digital Press, 2012)

Reviewed by Elmira Bayrasli

Where have all the American jobs gone? The question comes up in nearly every political and economic conversation. Some of these discussions lead to uncomfortable visions of American decline - a long, inevitable slide to the bottom. Immigrants are a perennial scapegoat; those who have come to this country illegally are blamed for milking an already withering public system, with calls for a crackdown rising in tandem with the unemployment rate. More vociferous voices want to keep them and any future foreigners out. In a new book entitled The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent, entrepreneur and scholar Vivek Wadhwa warns, “Be careful what you wish for.”

Wadhwa is, well, there isn’t a place he isn’t. He started his career as a software developer, helping his then-employer Credit Suisse First Boston create computer-aided software writing systems. It became a $118 million-dollar company. In 1997, just as the Internet was ramping up, Wadhwa founded Relativity Technologies, which helped businesses adapt to the new tech world. He subsequently entered the academic world, teaching or researching at the Pratt School of Engineering, Duke University, Singularity University, Emory, and Stanford. In recognition of his achievements, the U.S. government named him an “Outstanding American by Choice” in 2012. Wadhwa would like to see that title conferred to others.

In The Immigrant Exodus, Wadhwa talks to the U.S. government directly. He does so in Clintonesque manner, embellishing the beginning of each chapter with an anecdote about an amazing immigrant who has founded or is leading a start-up. We first meet Anand Chhatpar and his wife Shikha, who emigrated from India and started multiple tech companies after graduating from the University of Wisconsin-Madison. One of these companies, Fame Express, “grossed about $1 million and paid more than $250,000 in taxes.” Still, the couple’s immigration terms forced them to return to their native Mumbai in 2010. “Today,” Wadhwa writes, “the Chhatpars are living in Bangalore running Fame Express and their other company, BrainReactions.” They are in a bad position, far away from their start-ups. But so, argues Wadhwa, is America, because it has inhibited the Chhatpars’ ability to hire more people, pay more taxes, and drive desperately needed growth.

The subtitle of Wadhwa’s book is Why America is Losing the Global Race to Capture Entrepreneurial Talent. It is a reference to those innovators that America is keeping out because of strict immigration policies, but also to those innovators that are being driven away because it is simply easier and cheaper to start a company abroad. Wadhwa tells the story of Jason Gang Jin, a genome expert. He specializes in cutting-edge DNA chip analysis that applies principles of semiconductor chip technologies to create DNA microarrays. Jin came to the U.S. to study, at the University of California, San Diego, but in 2001, he launched Shanghai Biochip in China with a huge government grant and seed funding from 10 top life science shareholders. Wadhwa explains, “aside from the subsidies and the seed fund, the Chinese government was building out world-class laboratories and beefing up academic programs to feed a biotech ecosystem with local talent.” China won Jin over. How many more countries will do the same, appealing to young, talented people with funding incentives, free workspace and research support.

“Skilled immigrants have soured on America, driven to despair,” writes Wadhwa. This has incredibly dangerous implications for the U.S. tech industry, where a study conducted by Wadhwa found that “over half (52.4 percent) of Silicon Valley’s start-ups had one or more immigrant as a key founder.” Nationwide, these start-ups employed 450,000 people and generated $52 billion revenues in 2005 alone. Wadwha believes that number can be tripled, barring the immigrant exodus.

Wadhwa offers seven fixes to slow the immigrant exodus that include increasing the number of green cards available to skilled immigrants, removing country caps on green cards and instituting a start-up visa. The last point is something that Chile has done through a program called Start-Up Chile. The government funds it, in an effort to “build a more diversified Chilean economy with a robust technology center.” According to Wadhwa it is working. And that poses a threat to Silicon Valley, which is exactly what it and programs like it aim to do.

Now, if only Congress will listen. So far it has not; though solutions to the economic crisis are desperately sought after, immigration policy is seen as a separate issue, one that, Wadhwa notes, “is not really a priority for the U.S. government.” Unfortunately, when it comes to innovation and global competitiveness, immigration is absolutely an economic issue. Anyone who ignores it does so to his or her own peril. Immigrants have long been the backbone of America—our nation itself was a start-up founded by immigrants. The Immigrant Exodus demonstrates the danger this country faces if it continues to turn away such a precious resource.

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Elmira Bayrasli is a World Policy Institute project leader and contributor to Forbes. She is wriring a book on the obstacles to global entrepreneurship.

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