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Little hope for policy to attract entrepreneurial talent

While more than a dozen countries roll out the welcome mat for immigrant entrepreneurs, the U.S. lags in placing value on economic impact of international talent.

Amid the national debate about immigration, the current administration is trying to shut down a policy designed to attract entrepreneurial talent from abroad.

After a protracted period of uncertainty regarding the implementation of the International Entrepreneur Rule (IER) following a decision to delay it from July 2017 to March 2018, the Department of Homeland Security (DHS) released a proposal on May 29 to fully rescind it.

Created by an executive order in the previous administration, the program was designed to allow foreign-born entrepreneurs to oversee and grow a startup in the United States. The final rule of the International Entrepreneur program established regulatory provisions on a case-by-case basis with respect to entrepreneurs who can demonstrate potential for rapid business growth and job creation.

“Such potential would be indicated by, among other things, the receipt of significant capital investment from U.S. investors with established records of successful investments, or obtaining significant awards or grants from certain Federal, State, or local government entities,” the rule states. If granted, the policy would provide a temporary initial stay of up to two-and-a-half years (which may be extended by up to an additional two-and-a-half years).

Alternative needed

More than a dozen countries currently offer a “startup visa,” most recently the United Kingdom (2018), South Africa (2018), Argentina (2017), and New Zealand (2017), following pioneers like Chile (2010), Estonia (2014), Denmark (2015), and many others (see the Startup Nations Atlas of Policies). The United States Congress has been unable to pass a legislative avenue for such policy instruments, despite solid data indicating the benefits of high-skilled and entrepreneurial immigration on job and wealth creation in the United States.

The previous administration intended IER to serve as a workable alternative to an explicit startup visa, explained John R. Dearie, president of the Center for American Entrepreneurship (CAE), a nonpartisan organization, which sent a letter of comment to DHS opposing the proposed elimination of the International Entrepreneur program.

DHS will likely send the mission back to Congress where given the Republican leadership cannot even pass an immigration compromise, it is likely to end. The official statement announcing the DHS recommendation reads: “[T]he IE Final Rule created a complex and highly-structured program that was best established by the legislative process rather than relying on an unorthodox use of the Secretary’s authority…”

While recognizing its imperfect nature, and the need to find an alternative for entrepreneurs beyond the parole period, most experts in the field of entrepreneurship have decried the DHS proposal. “The decision by the current administration to rescind the IER sends the absolute wrong message at the wrong time,” Larry Jacob, vice president of Public Affairs at the Kauffman Foundation, told Entrepreneur Media. “When entrepreneurship has been in a decades-long decline, we need more dreamers, doers, and makers in our country.”

The Kauffman Foundation highlights three facts in its argument to rethink immigration:

  • Immigrant entrepreneurs are twice as likely to start businesses as native-born Americans.
  • More than half of America’s billion-dollar startups have an immigrant co-founder.
  • In 2014, 16 percent of the total U.S. college-educated population was foreign-born.