Barriers to immigration undermine innovation. The US is losing the global race for talent.
The west isn’t wild about immigrants anymore. The great entrepreneurial nation has lost its touch. If you want to make it anywhere, anywhere is somewhere other than America. The United States, a nation constructed with the commercial vim of the global diaspora, has become hostile to the kind who built it. Swallowed by nervousness and strangled by red tape, it is passively rejecting the sorts of people who can lead it into a successful future.
A series of impenetrable, politicized and outdated regulations is blocking global talent from coming to its natural home-from-home. The situation for foreign start-up founders is fragile at best: even those that gain temporary rights fear ultimate ejection. The immigrant entrepreneurs who are carving out businesses and building jobs in the United States must keep looking over their shoulders, unless – and until – they eventually gain citizenship.
Immigrating to the United States has become a byzantine art. Founders who want to land between sea and shining sea have to shape their application to fit a bizarre selection of visa types. Increasingly, satisfying the criteria requires such intellectual hoopla that many brilliant businesspeople no longer bother. They go to countries that welcome them instead. This is a clear and present threat to the very fabric of the United States. More than 25 competitor nations, including anglophone rivals Singapore and the UK, are actively courting international entrepreneurs. “It’s not like they came up with the idea,” Jeff Farrah, general counsel of the National Venture Capital Association, told Forbes. “It’s an American idea that we failed to act on.”
The easy thing to do is to blame Donald Trump. The beaten president was indeed no friend to international innovators. Yet while the new administration rejects the anti-immigrant rhetoric of its predecessor, it has done too little, too slowly, to open America’s arms to the brilliant. Towards the end of his presidency, Barack Obama launched the International Entrepreneur Rule, which allowed foreign entrepreneurs with at least $250,000 to invest to remain in the United States without a visa. Trump shelved it. Biden has pledged to revive it. But even this is just a modest armament in the war for talent.
There is a global race, and America is losing it. It is hard to understand the importance of overseas talent to the United States. Some 22% of all US business owners are foreign-born, compared to just 14% of all US residents. Foreign-born entrepreneurs command a combined revenue of over $528 billion. Some of the biggest US brands – Google and Tesla among them – were founded by overseas innovators. Yet the hotbed is cooling to a slow, yet sure, demise. Like a tyre leaking air, its downfall will come slowly at first, before a crash becomes apparent.
But the game is not yet up. President Biden, still riding a wave of popularity, has the opportunity to rebuild for the future. Of utmost focus should be the mangled visa system – a regulatory minefield that seems almost designed to push talent away and into the arms of America’s rivals. It must be fixed. The American way is to freedom and openness. The US requires fresh blood daily so its science, healthcare and tech sectors can win the battle of ideas. After Covid-19 has finally finished wreaking havoc on the world’s economies, there will be much work to do. The danger is that America lacks the innovative talent to lead it out, and into the next era.
