Rossana Weitekamp, firstname.lastname@example.org, 516-792-1462
Barbara Pruitt, Kauffman Foundation, 816-932-1288, email@example.com
U.S. stands to lose high-skilled immigrant entrepreneurs and science, engineering workforce(KANSAS CITY, Mo.) March 19, 2009
– Large banks, such as Bank of America, and other U.S. firms are reducing plans to hire foreign national students due to concerns over political backlash amidst growing U.S. job losses. However, a Kauffman Foundation study released today indicates that lessening the number of foreign national students in U.S. jobs may be detrimental to the economic health of the country by accelerating the return of talented immigrant students to their home countries.
“Policymakers are misguided if they believe these talented next-generation entrepreneurs and innovators threaten U.S. jobs. They, in fact, offer the promise of more jobs by building successful, high-growth companies—either in their own businesses or those for which they work,” said Robert E. Litan, vice president of Research and Policy at the Kauffman Foundation. “Instead of offering limiting H1-B visas to this talent pool, we need to create a direct path to permanent residency to keep the best and brightest foreign students here.”
The study, conducted by Duke University professor and Harvard researcher Vivek Wadhwa and titled “Losing the World's Best and Brightest: America's New Immigrant Entrepreneurs, Part V,”
surveyed 1,224 foreign nationals currently studying in U.S. institutions of higher learning or who had graduated by the end of the 2008 academic school year.
“Foreign students receive nearly 60 percent of all engineering doctorates and more than half of all mathematics, computer sciences, physics and economics doctorates awarded in the United States. These foreign nationals end up making jobs, not taking jobs,” said Wadhwa. “They bring insights into growing global markets and fresh ideas. Research has shown that they even end up boosting innovation by U.S. inventors. Losing them is an economic tragedy.”
According to the study's findings, very few foreign students would like to stay in the United States permanently—only 6 percent of Indian, 10 percent of Chinese and 15 percent of Europeans. And fewer foreign students than the historical norm expressed interest in staying in the United States after they graduate. Only 58 percent of Indian, 54 percent of Chinese and 40 percent of European students wish to stay for several years after graduation. Previous National Science Foundation research has shown 68 percent of foreigners who received science and engineering doctorates stayed for extended periods of time, including 73 percent of those who studied computer science. The five-year minimum stay rate was 92 percent for Chinese students and 85 percent for Indian students.
Among the study's other findings:
- A key impetus behind students' intentions to depart is the fear that they will not be able to find a job in the United States upon graduation and their growing belief that the U.S. economy will lag global growth rates in the near future.
- A significant majority of foreign students—85 percent of Indians and Chinese and 72 percent of European—are concerned about obtaining work visas; 74 percent of Indians, 76 percent of Chinese and 58 percent of Europeans also are worried about obtaining jobs in their fields.
- Chinese students, in particular, strongly feel the best employment prospects lie in their home country—52 percent said their home country has the best job opportunities versus 32 percent of Indian respondents and 26 percent of Europeans respondents. This contrasts starkly with the beliefs of most skilled immigrants in the 1980s and 1990s that the best opportunities were in the United States.
- More respondents are more optimistic about their home country's economic future than the United States'. Only 7 percent of Chinese students, 9 percent of European students and 25 percent of Indian students stated they believe the best days of the U.S. economy lie ahead. Conversely, 74 percent of Chinese students and 86 percent of Indian students feel the best days for their home country's economy lie ahead.
- A large percentage of respondents have entrepreneurial hopes; 64 percent of Indian, 66 percent of European and 68 percent of Chinese students indicated they want to start a business within the next decade. For Indian and Chinese students, the majority (53 percent and 55 percent respectively) hope to start businesses in their home countries. Only 35 percent of European students wish to open a business in their home country.
The students who were returning to their native countries echo a sentiment expressed by highly skilled Chinese and Indian immigrant entrepreneurs who were surveyed in the recent Kauffman Foundation study, “America's Loss in the World's Gain.” The strongest reason returnees cited for leaving the United States was that economic opportunities in their home country were better and they wanted to be with friends and families at home. Returnees also expressed strong entrepreneurial aspirations, and the majority believed that their best opportunities for entrepreneurship were at home. “Losing the Worlds' Best and Brightest” study is fifth in a series of reports Wadhwa has conducted on immigrant entrepreneurship for the Kauffman Foundation.
Immigrants historically have contributed to some of America's most successful businesses and innovations. Between 1990 and 2007, the proportion of immigrants in the U.S. labor force increased from 9.3 percent to 15.7 percent, and a large and growing proportion of immigrants bring high levels of education and skill to the United States. Immigrants have contributed disproportionately in the most dynamic part of the U.S. economy—the high-tech sector—co-founding firms such as Google, Intel, eBay and Yahoo. In addition, immigrant inventors contributed to more than a quarter of U.S. global patent applications. Immigrant-founded U.S.-based companies employed 450,000 workers and generated $52 billion in revenue in 2006.
The researchers believe continued loss of these talented individuals and their ability to start companies and create patents will reduce U.S. competitiveness. In the near term, entrepreneurs starting new companies will likely provide a much greater boost to the U.S. economy than government bailouts to banks.
“Rather than inciting populist sentiment against foreigners and fostering a new nativism, policymakers could instead provide incentive programs to encourage foreign immigrant entrepreneurship—perhaps pairing fast-track residency status with launching of companies. This would help ensure that those who want to stay and start companies can do so,” said Wadhwa. “America's economic power was built on an open doors immigration and economic policy that welcomed all who were talented and could contribute. In a time of great economic weakness, discarding the mechanisms that have driven economic innovation and growth for so long is dangerous and imprudent.”