Made In America: Foreign Entrepreneurs Who Will Compete Against Us

from the good-to-see dept

While I enjoy reading The New Yorker when I get the chance, it's rare they cover an issue that I'm deeply familiar with. So it's great to see James Surowiecki jump into the pool with an article about the problems with the US's view towards skilled immigration. It's an issue we've been covering for years, and I still can't figure out why people are against opening our shores to skilled immigrants. It often seems like the arguments against it are a mix of just under the surface racism with a healthy dose of ignorance about economics. Skilled immigrants help expand the pie, creating new companies and new jobs, rather than taking away from the market, as some falsely assume.

The Surowiecki piece is a good one in debunking many of those arguments and highlighting why we really need reform to let in skilled immigrants -- because as we keep turning them away, plenty of other countries have been welcoming them with open arms, meaning that they'll be building businesses that compete with domestic companies, rather than building companies in the US. And, even worse, a large number of those that we're turning away are people who were schooled here. So we're building our own competitors -- who want to stay here and help our economy -- and then sending them elsewhere to compete with us. How does that make any sense at all?
Of course, with unemployment here above eight per cent, too little immigration may not seem like a bad thing: surely we need more jobs, not more workers? But this is a shortsighted view. Economies are not static, with a limited set of resources to go around. As the work of the economist Paul Romer has shown, economies grow faster when there is more innovation, and having more smart people in the workforce is a key driver of innovation. And the quickest, cheapest way to get more smart people is to make it easy for them to move here. What’s more, historically there has been a clear connection between immigration in the U.S. and entrepreneurship, with immigrants creating companies (and jobs) at a disproportionate rate. In one famous study, the social scientist AnnaLee Saxenian showed that Chinese and Indian immigrants alone founded a quarter of Silicon Valley start-ups between 1980 and 1998, while a 2007 study found that a quarter of all technology and engineering start-ups between 1995 and 2005 were founded by immigrants. On a larger scale, more than forty per cent of the companies in the 2010 Fortune 500 were started by immigrants or their children.
Of course, the piece also explains why various bills to fix this (even with bipartisan support) don't seem to be moving: "there is no urgency in Washington on the issue, and voter anxiety about the weak economy and the scarcity of jobs gives politicians an excuse for inaction." Basically, some fear mongering among those who don't like "foreigners" during an election season is holding back good and useful policy, much to our own detriment.


Reader Comments (rss)

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  1.  
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    Forest_GS (profile), Aug 28th, 2012 @ 8:04pm

    The best way to guarantee a job seems to be to make a brand new business >.>

     

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  2.  
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    Anonymous Coward, Aug 28th, 2012 @ 8:52pm

    Well I would definitely like skilled immigrants.

     

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  3.  
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    Anonymous Coward, Aug 28th, 2012 @ 9:35pm

    Re:

    Blowjobs 4 u?

     

    reply to this | link to this | view in thread ]

  4.  
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    Anonymous Coward, Aug 28th, 2012 @ 9:39pm

    I'm a US citizen who came here as an immigrant. I have a graduate degree and, in "the old country", used to work in a field that had me coming to the USA a dozen or more times a year, often for high level negotiations.

    Although it might have served my career, I never tried to move here, because the process was so onerous. In fact, when I met and married my US citizen wife, she was the one who emigrated.

    It was only years later, when I had retired from that job the we came to the USA, so that she could be with her family. While the process was still onerous, I note that my experience, skills and credentials were never a part of the equation.

    One might think that a country that was built by the immigration of people with skills might welcome more such people. Another might counter that current immigration law is, in many respects, similar to current corporate support for useless and burdensome regulation. A means by which those who think that they have "got theirs" use government to pull up the drawbridge after them.

     

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    The Original Anonymous Coward (profile), Aug 28th, 2012 @ 9:39pm

    The reason? Nativism...

    The US has a long history of nativism {Wikipedia] where trained and talented people from other countries were denied entrance, or once on shore, were mistreated. We are seeing that same thing raise it's ugly head once again.

     

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  6.  
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    Anonymous Coward, Aug 28th, 2012 @ 9:54pm

    "As the work of the economist Paul Romer has shown, economies grow faster when there is more innovation, and having more smart people in the workforce is a key driver of innovation. "

    Actually, this would seem mostly to be a reason to subsidize higher education, make student loans easier to get, and perhaps to change the tax burdens for those who do go to school.

    If you always have to go outside to get smart people, you end up with a country full of dummies... and those other guys who actually do everything for you.

    The real issue isn't workers from outside coming in, the real issue for America is that the middle class jobs have gone offshore. This isn't because we didn't let talented people in, it's because people in other countries are willing to do the work for a whole lot less, leaving America's middle (and lower middle) class with less and less jobs to do.

    It's actually a challenge in many places to find any small manufacturing companies in operation, rather more people these days deal with containers, shipping, and processing things coming from cheap labor countries.

    These jobs would be offshored no matter who you let in at the top. The smart guys would just design the new stuff, innovate, and then send it off to China, India, and Mexico to knock out the product on the cheap. There is no trickle down because there is little work done at the lower levels.

    The story is interesting, and he raises many good points. I just think that he (and you as well Mike) tend to ignore where the vast majority of people can and will work.

    Further, there are other effects to: The family member effect. How many people come into the country as a result of a skilled working coming to the US? How many of them have skills, and how many of them are unskilled (and often under educated) but willing to do a job an American would do for less money, less benefits, and longer hours? Remember, many immigrants bring not only themselves, but their immediate and sometimes extended families with them. Your population doesn't get a +1, it might get a +4 or more. It may not be net as good as you make it out to be.

     

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  7.  
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    Pixelation, Aug 28th, 2012 @ 9:56pm

    What we need are stronger IP laws. That will really drive innovation. Make people pay to compete or face lawsuits. It's a win win for the 1%. Yay. *waves flag*

     

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  8.  
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    Anonymous Coward, Aug 28th, 2012 @ 11:11pm

    Re:

    #occupyhugepilesofmoney

     

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  9.  
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    Anonymous Coward, Aug 28th, 2012 @ 11:26pm

    Re: Re:

    #occupyingkoolaidstand

     

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  10.  
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    Hardison T., Aug 28th, 2012 @ 11:26pm

    Americans don't deserve jobs

    If Americans aren't willing to work for third-world wages (while living with first-world expenses), then they don't deserve the jobs in the first place. Sure, real unemployment is at 12%, and sure the recession has hurt a few middle-class peons who were stupid enough to invest 401Ks in the stock bubble, but corporation profits are at an all-time high (and taxes an all-time low) so things are great overall. It's the free market in action. Mere technicians will find plenty of jobs at Walmart.

    It's better if we import H1B workers, since their visa is attached to their job it's easy to deport them if we don't like their work or don't want to pay them. You need that kind of leverage to keep labor costs low.

    Face it, America isn't willing to make the changes needed to survive in the 21st century. Pensions, unemployment insurance, public education, "Social Security", fire and police departments, food safety regulations, public health, drug regulations, foreign policy, they're all Big Government sinkholes that serve no useful function whatsoever other than making people fat. Get rid of them, and whatever percentage of the population survives will be lean and mean and ready to profit!

     

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    That Anonymous Coward (profile), Aug 28th, 2012 @ 11:29pm

    Re:

    "but willing to do a job an American would do"
    I give you the southern state that passed a show us your papers law.
    All of the immigrants, legal and otherwise, fled the state.
    The news reporter interviewing a farmer who was gleefully happy about the law making those damn foreigners leave, while standing in front of his field of crops rotting away.
    He had a few people show up to work, but they quit before putting in even 1 full day. The work is backbreaking and the pay is horrible.
    I am sure the farmer was happy because someone will pass a bill giving him a bailout for letting his crops rot, but it sort of cut the visual of jobs being "stolen" down.

    There are lots of jobs out there, but many people just refuse to do them. People make short sighted decisions for quick relief, killing off a tax break for a company... not understanding they will move to another state or country.
    People expect to make wages not in line with reality, because someone else is making more.

    There is a company in Ohio, IIRC, they make a heater. They COULD have moved to China and saved a bunch of money. Instead the CEO redesigned the unit slightly so it could be done in the US still. They pay a decent wage, and the CEO isn't hiding all of her assets in offshore accounts.

    We have lots of problems in this country, but immigrants to a nation of immigrants shouldn't be one.

     

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    ECA (profile), Aug 29th, 2012 @ 12:39am

    nEED TO SAY THIS,

    As I dont think MANY MANY people get the point..

    Copyright ISNT a STANDARD..
    Every nation has different laws and regulations.
    SOME dont have nay laws, and some give everything away..
    Just because you have a CR in the USA dont mean anything to much of Europe.
    Think thats strange??
    How about products from Europe costing TONS more in the USA then in Europe.. but Sending things in from Japan/middle east is CHEAP.. hmm..and it isnt the VALUE of the money.

    PRODUCTS ARE NOT FINITE..
    most of the fighting it to get LAWS, equal or WORSE in other nations then in the USA.

    What would really happen if it was killed or LIMITED..
    I hope you understand that MANY developments tend to be inside Corps, paying employees, WHO DONT get very much for the advancements..and SIGN their rights away when they JOIN UP with the corp..

     

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  13.  
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    Zakida Paul (profile), Aug 29th, 2012 @ 1:39am

    We have the same ignorant attitude towards immigrants in the UK. People see the Daily Heil reporting that some immigrants come in and live a life mooching off the state and completely ignore the fact that the overwhelming majority of immigrants come here to work and do contribute to society through taxes and paying rent (maybe even a mortgage), buying food, oil, electronics etc in our shops, and generally making use of the services we offer. Then there are a lot of immigrants who go on to start successful businesses and create jobs. That doesn't even take into account how they enrich the atmosphere of the country with their culture.

    Still, all they see are the Abu Quatadas of the world and those who make a living on benefits.

    Of course some will abuse the system buy the majority are here for a better life with a better future and they will go on to achieve that.

     

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  14.  
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    Anonymous Coward, Aug 29th, 2012 @ 2:26am

    The US is in danger of falling behind the rest of the world...

    I work with a software product that is in high demand and used in Europe, Asia and beyond. US-based companies have only just discovered this product are starting to deploy it across their enterprises, but are having trouble finding the type of skilled professionals to administer it in the US.

    As part of my job I provide consultancy and training in this product - but we're finding it very difficult to get into the States to offer training and services due to the high level of protectionism and hurdles on immigration.

    We want to offer training and eventually hire our own workers in the US, but we just can't do that because so far we haven't been able to get a visa for any of our UK based workers (despite spending 1000's on lawyers and fast-track visa applications).

    The reality I see in my field and a lot of similar fields is that when these US companies realise that the products they have bought are of no use to them because no-one can administer them; they'll not only reject those products and go with something inferior, they'll fall behind the rest of the world in terms of technological progress.

    This is not an opinion, this is a current observation.

    The quagmire created by legitimising software patents - something that Europe doesn't recognise - can only hasten and add to this dilemma.

     

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  15.  
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    Anonymous Coward, Aug 29th, 2012 @ 2:42am

    Re:

    Living in a country with almost as harsh immigration laws there are more than one thing at stake here.

    A debate you need in the USofA is about education and assuring that your people can get certificates of a 1 day/1 week course so that you can call it "skilled" labour. Who should pay for it? Is a question of the ages, but if you want to stop the bleeding of middle class non-service jobs, it is the way to go...

    A debate we have had for a long time is about the connotations of letting one person get into the country. It has become almost as impossible to become a dane as it is becoming an american! The only thing that has held Denmark from making things worse is actually international agreements and EU law.
    The debates left to be taken are are about how to treat immigrants while they wait for the answer. Some wants to have them secluded from the general population and make it impossible for them to get a job while under review.
    All I can say is that these area are almost impossible to find a good solution on.

     

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  16.  
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    Someguy, Aug 29th, 2012 @ 3:01am

    Punching above your weight

    The Swiss regularly punch above their own weight because of immigration - and not only from skilled immigration. In a country with some of the highest costs of living in the world (we can argue over protectionism later...), the only way that it can stay competitive with the surrounding countries is to import cheap labor from abroad. This is particularly true in tourism - a major part of the economy. At the high end of the spectrum, Switzerland simply can't produce enough talent to manage all of their international businesses: Nestle, Lindt, Glencore, UBS, Credit Suisse, Roche, Novartis, Syngenta, Swatch, Zurich insurance Group, SwissRe, plus loads of large specialist firms most people haven't heard of.

    Sadly, like the US and UK, the Swiss have an uneasy relationship with immigration. The well educated understand that most immigrants are transient and thus help subsidize their social services, but there is still a lot of resentment towards foreigners "taking our jobs".

    I think in the end, no one wants to blame themselves for their own situation and someone who looks or talks differently from you makes an easy target to point a finger at.

     

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  17.  
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    Jessica Lohse, Aug 29th, 2012 @ 3:13am

    Underlying Racism What?

    Have you BEEN to America? WTH to start out something as serious as this as claiming underlying racism. You lost this reader.

     

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  18.  
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    Bengie, Aug 29th, 2012 @ 4:36am

    Re: Americans don't deserve jobs

    There will always be some corner-case example of how much these off-shore workers save money, but the rule of thumb still is "you get what you pay for".

    On average, what you save in money, you lose in quality. I guess that doesn't stop the average Walmart shopper. Why pay $100 once when you can pay $20 and replace it every year?

     

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  19.  
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    Anonymous Coward, Aug 29th, 2012 @ 4:42am

    Why should only "skilled" people be allowed in?

    "Give me your tired, your poor/Your huddled masses yearning to breathe free,
    The wretched refuse of your teeming shore.
    Send these, the homeless, tempest-tost to me,
    I lift my lamp beside the golden door!"

     

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  20.  
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    Anonymous Coward, Aug 29th, 2012 @ 5:01am

    Re:

    This was before the age of entitlements.

     

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  21.  
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    gorehound (profile), Aug 29th, 2012 @ 5:04am

    Re: The reason? Nativism...

    This is all I need say::::::::::::::::::::::
    Gabriela Mercer, the likely Republican congressional candidate in Arizona's new 3rd District, once declared that the only goal of Middle Easterners crossing America's southern border was to "cause harm to the United States."

    "I don't have the numbers -- I remember taking notes, but if I remember correctly, it was 25,000 that they were able to apprehend, other than Mexicans," Mercer said in an interview with the conservative website Western Free Press.

    "That includes Chinese, other Middle Easterners. If you know Middle Easterners, a lot of them, they look Mexican or they look like a lot of people in South America: dark skin, dark hair, brown eyes. And they mix, they mix in. And those people, their only goal in life is to cause harm to the United States. So why do we want them here, either legally or illegally? When they come across the border -- besides the trash that they leave behind, the drug smugglings, the killings, the beheadings -- you are seeing stuff: it's a war out there."

    Later in the interview, Mercer, a Tea Party favorite who seems poised to win the right to challenge Rep. Raul Grijalva this November, discussed the damage that illegal immigration was causing to "the habitat."

     

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  22.  
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    abc gum, Aug 29th, 2012 @ 5:04am

    With jobs being outsourced, not sue what the skilled workers would be doing. Seems the way to make money around here is by dismantling what was built in the past. Hey, that could be a new campaign slogan - We Dismantled that.

     

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    saulgoode (profile), Aug 29th, 2012 @ 5:12am

    As with most statistics, I am skeptical of the ones presented in this report.

    Firstly, the startups were not exactly "founded by immigrants"; they were startups where at least one of the founders was an immigrant. The inference that these startups would not have been "started up" were it not for those immigrant founders should not necessarily follow. What is the definition used for a "founder"? How many "founders" were involved in these startups? What was the percentage of immigrant to citizen founders in these startups that had at least one immigrant founder?

    Mr Suriwiecki's article laments the half million skilled immigrants awaiting permanent visas, and yet fails to note that there are about 600,000 college graduates in skilled disciplines each year of which half are unable to find employment.

    Hard numbers are seemingly hard to find (these reports prefer percentages) but by my reckoning, there are around two million engineering jobs in the U.S., while universities are graduating about 200,000 engineers each year. At least in the engineering professions, this does not suggest any shortage in supply.

    The amount of immigration permitted by a nation is not an easy value to determine, but my suspicion is that the H1B visa program, even at its current level, is more about corporations trying to minimize their payroll expenses than an actual lack of an available skilled workforce.

     

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  24.  
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    Anonymous Coward, Aug 29th, 2012 @ 5:32am

    Hey, politicians don't care about pesky things like facts. Why else do you think republicans are making a big deal about Obama saying 'you didn't build that', when he really said businesses didn't build the roads and bridges their business depends on, or build the public education system that gave years of free training to their employees.

     

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  25.  
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    Anonymous Coward, Aug 29th, 2012 @ 7:15am

    Re: Re:

    "People expect to make wages not in line with reality, because someone else is making more."

    But why? It's the amazing paradox that people want to get paid a good living wage, but they also want to pay the cheapest price. In the world produce, as an example, it's still cheaper to produce much of it offshore and transport it in than it is to pay American workers to pick it. If the farms paid American worker the wage they think they deserve, then they would be too expensive in the store for those very workers to buy.

    The US will always face this problem being one of the highest wage economies around. There is always someone willing to do the work cheaper, and out excellent transport systems worldwide mean that you can get fresh fruits and veggies all year long at a good price.

    The US won't fix itself by bringing more intelligent people on the top of the economy, because their manufacturing will be just shoved offshore. It would be way better to improve the education of US workers and move from there. Home made solutions are way better than importing band-aids.

     

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  26.  
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    bwp (profile), Aug 29th, 2012 @ 7:49am

    We must agree to disagree

    This is one topic that I continue to disagree with Mike. We don't need more skilled workers from overseas to be allowed into the country, we need to develop our own skilled workers and right now we're not doing that. A quick fix like allowing in foreign skilled workers quickly becomes THE fix and nothing will be done about the true root problem which is better educational programs for American children and workers that are out of jobs now. I continue to see a great deal of graduate and PhD programs discriminate against American students in favor of foreign students because of the influx of money they get for those students and I continue to see fully qualified American workers have their jobs shipped overseas.

    As for Mike's absolute statement:

    "It often seems like the arguments against it are a mix of just under the surface racism with a healthy dose of ignorance about economics."

    If Mike is implying that he's the only one that understands economics then to quote Ice Cube - "You better check yo self before you wreck yo self."

    Economics is far from an absolute science and the various schools of economics rarely agree on any so I'm sure there's just as much evidence that the arguments against this has just as much researched evidence as the arguments for, it's just the interpretation of the data that is different. Too often we see people interpreting the data to fit their assumptions rather that reporting on what the actual data says.

     

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  27.  
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    ahow628 (profile), Aug 29th, 2012 @ 9:14am

    Re:

    "One might think that a country that was built by the immigration of people with skills might welcome more such people. Another might counter that current immigration law is, in many respects, similar to current corporate support for useless and burdensome regulation. A means by which those who think that they have "got theirs" use government to pull up the drawbridge after them."

    Those who came before = good. Those who come after = bad. Rent seeking is good when you are the one collecting the rent.

     

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  28.  
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    Gerald Robinson (profile), Aug 29th, 2012 @ 9:30am

    Foreign entrepreneurs

    The idea behind the current visa program was to encourage educated immigration. Instead its being used to suppress wages and export jobs. Even with the real jobless rate at nearly 18% immigration is not a problem (unless you consider Obama's inclusion of nearly a million unskilled illegals); but off shoring is.

     

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  29.  
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    PT (profile), Aug 29th, 2012 @ 9:55am

    Re: Foreign entrepreneurs

    The ostensible idea behind the current visa program was to encourage educated immigration. The real purpose was always to suppress wages. Alan Greenspan said so in plain language in his memoir. I don't have a copy of the actual quote with me at the moment, but in essence he wrote that rewards are going disproportionally to the skilled, that the US education system has failed to create enough skilled Americans, the gap between the skilled and unskilled was too large, so we needed to vastly increase immigration of skilled people - I can quote the last phrase from memory - "thus driving down their wages".

     

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  30.  
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    Anonymous Coward, Aug 29th, 2012 @ 5:53pm

    Re:

    Whether skilled immigration helps or harms your economy all depends on what kind of skills the immigrants bring with them. Members of the top 1% in their native countries tend to be very expert criminals. Importing yet more criminals is an extremely bad idea. Criminals will wreck any economy if given half a chance. Criminality is the reason why the third world is the third world.

    On the other hand importing knowledgeable and hard-working members of the middle class is a very good idea. Those are the guys who start their own businesses and grow the economy.

     

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  31.  
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    Jim, Aug 29th, 2012 @ 6:20pm

    Once again, way over your head, Techdirt

    Whenever this blog wanders out of its tech strong suit, it starts showing its ignorance immediately. Fortunately, many of the insightful commenters who actually have to live outside of San Francisco or New York are here to provide a reality check.

    All these "skilled immigrants"/"entrepreneurs" are just here to grease the outsourcing of jobs, not to create U.S. jobs. So, according to the blogger, of course, we need more of that! The plummeting quality of life in this country will hit Mr. Masnick, and then we'll see what he has to say.

     

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  32.  
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    Tex Arcana (profile), Aug 30th, 2012 @ 12:22pm

    The real problem with this, and a fact ignored by both authors, is that a huge majority of these immigrant workers are being used to replace higher-paying--and just as qualified--American workers. And, as stated above, as a pipeline toward outsourcing said jobs and reducing costs even further.

    Personally, I think as the Romans did: as long as they speak the language and pay taxes, let 'em in.

    But this is being used as a dodge to eliminate jobs and send the, elsewhere.

    When will these idiots realize that, when everyone is unemployed (or employed as slave labor), there will be no money being spent on their crappy poisoned chinese junk?? Talk about watching the economy collapse--then again, these psychopaths don't care, as long as they can abscond with their ill-gotten gains to the nearest non-extradition nation, while the rest of us suffer and die thanks to their murderous practices.

     

    reply to this | link to this | view in thread ]


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