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A public policy blog from AEI
Consider the following summary, posted earlier this year at the World Economic Forum blog:
It is no coincidence that 40% of Fortune 500 companies were founded by first or second generation immigrants; or that more than half of America’s billion-dollar start-ups, known as unicorns, were founded by immigrants like Elon Musk, Peter Thiel and Alexander Asseily. One quarter of those unicorn-founders initially came to the US as students, typically of science, technology, engineering, medicine (STEM) or business. The impact of international students who stay after graduating is felt far beyond billion-dollar start-ups. A one percentage point increase in immigrant college graduates results in between 9 and 18% more patents per capita, benefiting the whole economy.
It shouldn’t be hard to see the value in making it super-easy for international intellectual and entrepreneurial talent to come to America. It is more difficult to see the wisdom in the Trump administration taking steps “toward scrapping a regulation that would have helped more foreign-born entrepreneurs build startups in the U.S. without a traditional visa.”
As I understand it, the International Entrepreneur Rule is the next-best policy since Congress has been unable to pass the Startup Visa Act. (But I am not arguing that the startup visa is optimal immigration policy either.)
To take advantage of this regulatory workaround, Axios notes, “entrepreneurs must provide evidence that the startup entities: (1) have substantial and demonstrated potential for rapid business growth and job creation, (2) have secured $250,000 in funding, R&D award, or acceptance from a startup incubator, [and] (3) will provide ‘significant benefit’ to the U.S.” Indeed, the economic benefits of such entrepreneurs is so widely accepted that other advanced economies are in hot competition for them.
About the best criticism I could find was that the rule created “uncertainty” because the visa is temporary. From Ars Technica: “It would have allowed foreign entrepreneurs an ‘initial parole stay’ of 30 months in the US, which could have been extended by another 30 months.” Or maybe it was executive overreach from the Obama administration. I also recall that Trump White House adviser has in the past stated there were too many Asian CEOs in Silicon Valley, because it somehow harmed “civic society.”
Oh, about that startup visa idea. Here is something interesting from back in 2010 when the bill was being considered:
I am an immigrant founder and I have contributed to the creation of over 100 jobs in the US based on my own startups, and startups I have invested in. In the past few years I have invested in two companies that have had immigrant founders — in both cases the founders had PhDs from Stanford and were able to make the case for an EB-1 (Alien of Extra-ordinary Ability) and an EB-2 (National Interest) visa. At the same time, I’ve met numerous would-be startups where the founders don’t have advanced degrees. They are stuck working at companies in the US, biding their time till they can eventually get their greencard and then be able to start their own companies. These are highly qualified people — they would be able to raise money for their companies, but they still cannot venture out on their own because of visa issues. The Startup Visa addresses this.
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