October 31, 2014

The Immigrant Exodus Examines an Entrepreneurial Crisis in America

The Immigrant Exodus

“A vibrant United States that opens its doors to skilled immigrants will provide a greater benefit to the rest of the world than a closed, shriveling United States because the rules by which the US practices the game of economic development, job formation, and intellectual capital formation grow the global economic pie.”

So says Vivek Wadhwa (@wadhwa), author of the book The Immigrant Exodus: Why America Is Losing The Global Race to Capture Entrepreneurial Talent.  I discovered the Wharton Press book via a mention in the author’s Twitter feed and I reached out to ask for a review copy.

Wadhwa’s bio reads exactly as a pinnacle of venture research would be imagined.  He holds multiple distinguished university roles – Arthur & Toni Rembe Rock Center for Corporate Governance, Stanford University;  Director of Research at the Center for Entrepreneurship and Research Commercialization at the Pratt School of Engineering,  Duke University; and distinguished visiting scholar, Halle Institute of Global Learning, Emory University.

His bio notes that in February 2012, Wadhwa received the distinguished recognition as an “Outstanding American by Choice” from the U.S. government— for his “commitment to this country and to the common civic values that unite us as Americans.”

Wadhwa briefly notes his honor of receiving the award – and his cherished affirmation of the American dream – as he raises the question why America should be concerned about incorporating skilled immigration into its economy.  He also shares the challenges he has faced in discussing immigration (receiving threats in one instance).

Overall, the reader gets a short but powerful 84 page book on immigration and its impact on the US economy.  The book simply gets to the heart of an elusive yet stirring crisis without feeling abridged in its topic.

And that crisis is growing, slowing shifting the economic direction of the country. The end result is a disturbing brain drain that masks America’s diminishing global economic impact:

“The American dream is losing its luster. Restrictive US immigration policies and the rise of other countries’ economies are driving talent elsewhere….The irony is that the majority of these skilled immigrants and the thousands of startup founders who have been barred from getting a visa remain intent on obtaining one.”

That irony stems from the increasing institutional education capabilities developing abroad.  Wadhwa notes evidence that improvements are leading to more attractive   entrepreneurial environments outside the US, even in neighboring Canada.

“Countries competing for global talent have mounted strong campaigns to bring in skilled immigrant students.  For example, in Canada, foreign science and engineering students comprised roughly 7% undergraduate and 22% of graduate science and engineering enrollment in 2008. This represents a significant uptick from 4% and 14% in 1999.”

Stats also convey the scope of the impact among universities and the research community, significant sources of research and development for large organizations as well as a springboard for many startups.

“A June 2012 report by the Partnership for a New American Economy found that 76% of the patents awarded to the top patent-producing universities in 2011 had at least one foreign-born inventor.”

Real Lives Behind The Numbers

Stories from entrepreneurs and professionals paint a clear portrait of real people impacted by policy.  For example, take Sophie Vanderbroek, a CTO at Xerox.  She joined Xerox after a New York multinational firm dragged its heels in support of her and other internationals for a green card. During this time Vanderbroek commuted 300 miles to work with two children at home; She joined Xerox, which immediately sponsored her.

Wadhwa surmises that Vanderbroek, like many foreign students, would have left if she was forced to wait longer – he conducted a follow up to an earlier research study to note the decline of entrepreneurs.

I always enjoy books with a few stats to make you think, but as I earlier mentioned, Wadhwa shines by offering his context in an efficient manner.  He has a straightforward explanation of H-1B worker status, while other text will help you understand why a lopsided green card process can disrupt future entrepreneurial development.

The last chapter features recommendations meant to reduce the bureaucracy that hinder immigrant contributions. They include untethering the H-1B worker from the employer and instituting a startup visa, to address delays cause by.  The suggestions are made with a clear love for the US – not at pro-US propaganda-levels, but with such terrific appreciation, one that makes the reader appreciate the irony Wadhwa raises.

Some insights of what institutions are currently doing to address the crisis could have been offered, but further in-depth topics are most likely tied to an in-depth research study Wadha co-authored with Dean AnnaLee Saxenian of UC Berkeley and Prof. Dan Siciliano of Stanford Law School.  This book compliments that study.

Startups and human resource managers at large companies will want to take some cues in discovering what impact immigration policies have in attracting talent.

Those whose outlook on immigration goes no further than a definition in Wikipedia will certainly reconsider the value of their knowledge after reading the book.  In fact the book compliments analytics in some ways – the human mind is the new capital, essential to draw value from today’s challenges such as big data and spreading equal access to resources for small businesses.

Wadhwa has been a champion of diversity in Silicon Valley. His book shows that the mantle awarded his research of key influences of global economies is well earned.

Even better, The Immigration Exodus shows small startups and large organizations how to make a true mark in the world beyond a balance sheet.

5 Comments ▼

Pierre DeBois - Associate Book Editor


Pierre DeBois Pierre Debois is Associate Book Editor for Small Business Trends. He is the Founder of Zimana, a consultancy providing strategic analysis to small and medium sized businesses that rely on web analytics data. A Gary, Indiana native, Pierre is currently based in Brooklyn. He blogs about marketing, finance, social media, and analytics at Zimana blog.

5 Reactions

  1. We have got to stop importing poverty from Mexico. The country of Mexico pockets taxpayer dollars sent home because we are stuck with the bill of feeding and careing for the parasites.

  2. Wow – “closed, shriveling” ? Hard to reconcile this with the simple fact that the U.S. allows in more immigrants every year than all the other nations on earth combined.

    Guess Vivek Wadhwa won’t be happy until all 7 billion people on the planet pile on in.

    Plenty of room and resources for them, right? – empty highways, plentiful job market, bountiful energy supply …

  3. Pierre: Thanks for the book review. As an American in spirit, I am glad to see a sound book on immigration. I have studied and worked in the United States of America and my long-range goal is to return to the Land of Opportunity! It is still the greatest country in the world due to the strong American sense-of-life.

    I recommend you to read Harry Binswanger’s essay, Open Immigration.

  4. In my previous company, we were a startup with a limited budget for salaries, fringe benefits, etc. While we probably would have been willing to do so had the H-1B requirements been less burdensome, we couldn’t afford to sponsor those visas as a bootstrapped startup. That doesn’t mean that we weren’t contracting with great talent overseas, but since we couldn’t really afford the hiring process to sponsor citizenship, we contracted with these people. Would they have made great citizens? Probably, but as a bootstrapped business, we simply couldn’t afford that outlay in getting all of the paperwork properly completed, submitted, etc.

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