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H-1B Visas Essential to Attracting and Retaining Talent in America – NFAP Policy Brief

H-1B temporary visas have been an essential avenue for allowing high-skilled foreign nationals to work in America, according to a Kauffman Foundation-funded National Foundation for American Policy report.

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The report, “H-1B Visas Essential to Attracting and Retaining Talent in America,” details how the “Gang of 8” Senate immigration bill would dramatically change employment-based immigration policy, attempting through a variety of means to discourage or, in some cases, prohibit the use of H-1B visas, while providing more employer-sponsored green cards (for permanent residence).

The study finds premises on which new restrictions have been proposed for H-1B visas are mistaken, overstated or based on incorrect information. The study recommends Congress expand the number of green cards and H-1B visas without burdening employers or visa holders with new rules and limitations that will harm the competitiveness of U.S. companies.

The full report is available at www.nfap.com.

Ready, Willing, and Able? Kansas City Parents Talk About How to Improve Schools and What They Can Do to Help

Schools seeking to boost parental involvement will need to tailor their approaches to match parents’ differing views and concerns, according to a new report funded by the Kauffman Foundation.

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The report from Public Agenda, “Ready, Willing and Able? Kansas City Parents Talk About How to Improve Schools and What They Can Do to Help,” indicates that parental involvement means very different things to different parents, with some drawn to advocacy and school reform while others are more comfortable participating in time-honored tasks like helping with school clubs, sports and bake sales.

While the research explores the views of Kansas City parents, it also echoes findings from a previous Public Agenda national study and raises important questions for education leaders nationwide.

Parents surveyed are divided on what kind of parental involvement will do the most to strengthen public schools: 52 percent say it is improving the quality of parental involvement at home versus 42 percent who say that it is getting parents more directly involved in running schools. Parents are also split on whether better teachers (27 percent chose this), more money (34 percent) or more parental involvement (34 percent) would do the most to improve their own children’s school.

Just over half (51 percent) of the Kansas City region’s parents acknowledge that they could be more involved at their child’s school if they tried harder, though parents are divided on how they prefer to be involved. Many parents (27 percent) say they could help out more in traditional ways at the schools their children attend and nearly a third (31 percent) seem ready to embrace broader roles in shaping how schools operate and advocating for policy reform. Some parents (19 percent) are primarily looking for more guidance from their schools on how to help their own children succeed. In addition to exploring the similarities and differences among parents, the report includes a set of concrete and practical measures that education leaders can employ to engage parents in more effective ways.

Public Agenda recommends that school leaders heed and apply these important over-arching principles to engage more parents:

  1. Assure communication goes two ways. Clear communication from educators on academic expectations, school policies and resources is important, but parents must also have the opportunity to bring their perspectives to the table.
  2. Begin by listening and addressing key concerns. School leaders should identify the pressing concerns of parents and gain understanding of how they think and talk about them. When parents know their chief concerns are being addressed, they are most open to constructive involvement.
  3. Approach parents with a clear request. Nearly one-quarter of parents surveyed say they haven’t been asked to volunteer or help out at their children’s schools in the past year. School leaders should ask parents for help.
  4. Provide many and varied opportunities to engage. When school leaders provide diverse opportunities for parental involvement, they have a greater chance of attracting parents of differing views and readiness.

The report offers specific ideas for engaging different types of parents, whether they are comfortable shaping education policy, prefer more traditional activities or need support to improve their involvement at home.

Overall, parents surveyed are supportive of their principals and teachers. Seventy-seven percent say the principals and teachers at their child’s school are connected to the community and have a good feel for what’s going on there. Sixty-four percent of parents surveyed say their school goes out of its way to encourage parents to get involved.

Many parents surveyed lack knowledge about important school issues. Nearly four in 10 (37 percent) do not feel well-informed about where their child’s school ranks academically compared to other area schools. Only 40 percent of parents say they know “a lot” about their children’s teachers, and one-quarter is unsure whether or not their child’s school made “adequate yearly progress” the year before.

The study identifies three distinct groups of parents:

  • Potential Transformers are poised for deeper action on education policy, though still on the sidelines. These parents say they would feel “very comfortable” serving on committees to decide school policies and advocating for school improvements by contacting public officials and the media. However, very few have been involved in these ways. Thirty-one percent of parents surveyed fall into this group.
  • School Helpers are willing to get more involved in traditional ways.These parents are less comfortable with advocacy roles but say they could be more involved helping out directly at their children’s schools. School helpers say they feel “very comfortable” participating in traditional involvement activities, including volunteering during school trips, bakes sales or sporting events, or attending PTA meetings. Twenty-seven percent of parents surveyed fall into this group.
  • Help Seekers are concerned about their children’s learning and are primarily looking for more guidance from their schools.These parents are unlikely advocates, and they feel they are already doing as much as they possibly can at their children’s school, yet all help seekers feel they have not yet succeeded in helping their children to do their best in school. At the same time, this group is more critical of their teachers and schools than other parents and more skeptical about most initiatives to improve parental involvement. Nineteen percent of parents surveyed fall in this group.

Schools in Kansas City and elsewhere need to consider the needs and priorities of these three groups as they seek to not only increase parental involvement but also engage parents in school improvement.

Kauffman Index of Entrepreneurial Activity 1996–2012

As the unemployment rate fell in 2012, another economic indicator dropped too: the overall business creation rate. According to the annual Kauffman Index of Entrepreneurial Activity, the 2012 rate declined slightly from 0.32 percent of American adults per month starting businesses in 2011 to 0.30 percent in 2012.

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That translates to approximately 514,000 new business owners per month in 2012 compared to 543,000 the year before. The 2012 business creation rate is slightly higher than pre-recessionary and long-term levels.

The Kauffman Index of Entrepreneurial Activity is a leading indicator of new business creation in the United States. It provides the only national measure of business creation by specific demographic groups. The 2012 data allow for an update to annual reports dating back to 1996. Interactive data spanning all 16 years is available at www.kauffman.org/kiea.

The overall decline in business creation rates was entirely driven by a significant decline in rates among men, from 0.42 percent in 2011 to 0.38 percent in 2012. Entrepreneurial activity remained unchanged in 2012 for women at 0.23 percent, though men still held a substantially higher rate than women.

Entrepreneurship rates for all races and ethnicities declined from 2011 to 2012. The Latino business-creation rate declined from 0.52 percent in 2011 to 0.40 percent in 2012, but remained at a high level relative to previous years and other demographic groups. The Asian entrepreneurial activity rate decreased slightly from 0.32 percent in 2011 to 0.31 percent in 2012.

The youngest age group (ages 20–34) experienced a large decrease in business creation rates, dropping from 0.27 percent in 2011 to 0.23 percent in 2012. The 45–54 age group also experienced declining rates from 2011 to 2012. From 2011 to 2012, both the 35–44 and 55–64 age groups experienced slight increases in rates.

Geographically, entrepreneurial activity rates decreased in all U.S. regions. Rates remain highest in the West and lowest in the Midwest.

Among states, Montana had the highest entrepreneurial activity rate, with 530 per 100,000 adults creating businesses each month during 2011.

Rounding out the top five highest rates were Vermont (520 per 100,000 adults), New Mexico (520 per 100,000 adults), Alaska (430 per 100,000 adults), and Mississippi (430 per 100,000 adults).

The states with the lowest rates of entrepreneurial activity were Minnesota (150 per 100,000 adults), Nebraska (170 per 100,000 adults), Michigan (180 per 100,000 adults), Wisconsin (180 per 100,000 adults), and Ohio (190 per 100,000 adults).

For the first time in this series, entrepreneurship rates are reported by veteran status. In 2012, the business creation rate was 0.28 percent for veterans, a decline from 0.30 percent in 2011. The non-veteran entrepreneurship rate was 0.30 percent.

Over the last seventeen years, veteran entrepreneurship rates generally have been higher than non-veteran entrepreneurship rates.

Over the past four years, however, veteran rates have been lower. The share of all new entrepreneurs represented by veterans was 12.3 percent in 1996 but has steadily decreased to 5.7 percent by 2012.

This is due to the decline in the Korean and Vietnam War veteran share of the working-age population over the past seventeen years.

The complete report plus interactive data of annual entrepreneurial activity nationally, by state and select MSAs since 1996 is available at www.kauffman.org/kiea.

2013 Thumbtack.com Small Business Friendliness Survey: Methodology & Analysis

This, the second-annual Thumbtack.com Small Business Friendliness Survey showed that Utah, Alabama, New Hampshire, Idaho and Texas rated as the top-five friendliest states for small business.

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In contrast, small business owners gave Hawaii, Maine and Rhode Island an “F,” while California and Illinois rounded out the bottom five, both earning a “D” grade. The top performing cities were Austin, Virginia Beach and Houston.

The Thumbtack.com Small Business Friendliness Survey is the only survey to obtain data from an extensive, nationwide universe of job creators and entrepreneurs in order to determine the most business-friendly locations.

While there are various “business climate rankings” that rate locations as good or bad for business, there are no others that draw upon considerable data from small business owners themselves.

Some of the survey’s key findings include:

  • Texas had three of the top five cities (Austin, Houston, and San Antonio), while California was home to three of the bottom five (Los Angeles, San Diego, and Sacramento). Newark, NJ finished last in this year’s rankings.
  • Professional licensing requirements were 30 percent more important than taxes in determining a state’s overall business-friendliness, confirming the findings from last year’s study. Furthermore, this year’s research revealed that 40 percent of U.S. small businesses are subject to licensing regulations by multiple jurisdictions or levels of government.
  • Small businesses were relatively unconcerned with tax rates — more than half of small business owners felt they pay about the right share of taxes.
  • African-American and Hispanic small business owners were significantly more likely than their white counterparts to encourage others to start a new business.
  • North Carolina was the most improved state, making strides across multiple categories and rising from a “C+'” to a “B+” grade overall.
  • The ease of obtaining health insurance was an important factor for many businesses. One-third of small business owners rated obtaining and keeping health insurance as “Very Difficult,” versus only 6 percent who rated it “Very Easy.”

 The full results can be seen here and include full sets of rankings, dozens of easily searchable quotes from small businesses nationwide, regional comparisons within states, and Census data comparing states’ and cities’ key demographics against those of other states and cities.

Survey methodology

Thumbtack.com surveyed 7,766 small businesses across the United States. The survey asked questions about the friendliness of states and cities toward small businesses, such as:

  • “In general, how would you rate your state’s support of small business owners?”
  • “Would you discourage or encourage someone from starting a new business where you live?” and
  • “Do you think you pay your fair share of taxes?”

Thumbtack.com and the Kauffman Foundation evaluated states and cities against one another along more than a dozen metrics. The full methodology paper can be found here.

Energizing an Ecosystem: Brewing 1 Million Cups

In what some might consider an ironic twist, technology seems to play a lesser role in building a local entrepreneurial community for startups than good old-fashioned face-time and word of mouth.

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That’s one of the key findings in a new paper released today by the Ewing Marion Kauffman Foundation that surveyed participants in 1 Million Cups (1MC), Kauffman’s popular entrepreneur educational program launched in Kansas City, Mo., last year.

1 Million Cups is a weekly program that showcases two startups per week to engage local entrepreneurs, educate them about the startups in their community and accelerate the startups and their founders through mutual collaboration.

“Energizing an Ecosystem: Brewing 1 Million Cups” presents results of an initial survey among 1MC participants to identify their demographic characteristics, information about whether they were a founder or co-founder of a startup, and their attendance patterns at 1MC.

The survey, to which 79 participants responded, representing a response rate close to two-thirds, reflects the state of 1MC in late autumn 2012. An infographic and interactive visualization of some of the data also are available.

The program has grown progressively in size and reach over several months, driven primarily by word of mouth. Although 1MC uses its own website, Facebook, Twitter and other social media, nearly 67 percent of survey respondents said they had begun attending 1MC events based on a personal invitation or recommendation.

The 1MC program itself is equally low-tech. Launched in April 2012, the format is simple: weekly one-hour gatherings at a donated space with brief educational presentations by two entrepreneur attendees, followed by time to discuss their companies, offer suggestions and talk.

The program has grown rapidly from 13 attendees at the first event to more than 250 at a recent event in February. The survey, administered in November 2012, found that 66 percent of survey respondents were attending at least twice a month, and 42 percent were attending weekly. This is despite travel time of 30 minutes or more each way for many of the attendees coming from suburbs.

The paper’s authors believe the group’s rapid growth and high level of participation signal the program’s value to its audience and its potential as a model for other cities trying to develop and connect their entrepreneurial community.

1MC programs already have been launched in Des Moines and Cedar Rapids, Iowa, Houston, St. Louis and Reno, Nev.

Other findings from the time of the survey include:

  • The majority (57 percent) of participants have at least a bachelor’s degree, and an additional 29 percent have obtained a master’s or doctoral degree.
  • Most attendees’ startups are in a relatively early stage: 47 percent described their business model as “in development.” However, the majority of founders and co-founders report working full time in their startup (74 percent) and having taken in at least some form of revenue (64 percent).
  • 43 percent of 1MC participants are not originally from the Kansas City metropolitan area, but came to the area to attend college and stayed, or came after college and stayed.
  • Fully 87 percent said they attended a 1MC event “to connect with other entrepreneurs,” with 46 percent also citing “to have fun” as a motivation for attendance.

The Contributions of Immigrants to Cancer Research in America – NFAP Policy Brief

More than 40 percent of the cancer researchers at America’s top cancer institutes are immigrants, according to a Kauffman Foundation-funded National Foundation for American Policy report released.

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The report discusses the contributions of immigrant researchers and details the immigration difficulties experienced even by top cancer researchers.

The study analyzed biographies of approximately 1,500 cancer researchers at the top cancer institutes. In “The Contributions of Immigrants to Cancer Research in America,” the NFAP research shows that cancer researchers often wait years for permanent residence and endure the same long wait for green cards as other highly skilled immigrants and their employers.

The study shows immigrant scientists have played an important role in improving the cancer survival rates experienced by Americans, and thus stresses the importance of allowing immigrant cancer researchers and others in medical-related fields access to additional green cards in future immigration legislation.

The report includes profiles of leading immigrant researchers, as well as a historical look at the contributions of immigrants to cancer research.

Give Me Your Entrepreneurs, Your Innovators: Estimating Employment Impact of a Startup Visa

Startup Visas would unleash a torrent of entrepreneurial energy among foreign-born individuals in the United States, according to a white paper released by the Ewing Marion Kauffman Foundation.

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The report, “Give Me Your Entrepreneurs, Your Innovators: Estimating the Employment Impact of a Startup Visa,” said that offering the visas has the potential to add, conservatively, between 500,000 and 1.6 million new jobs over the next 10 years.

The visas, included in the bipartisan Startup Act 3.0 bill recently introduced in the U.S. Senate, would be available to a fixed pool of 75,000 foreign-born individuals who already hold H-1B visas or F-1 student visas and who start companies in the United States.

In the first year of business, these entrepreneurs would be required to employ at least two full-time, non-family workers and to invest or raise an investment of $100,000 or more.

By meeting the first-year requirements, recipients would be granted a three-year visa extension. If, over that three-year period, the business owner has hired, on average, one additional employee each year, he or she may apply for permanent status.

Using the most recent data from the U.S. Census Business Dynamics Statistics, the study’s authors evaluated the Startup Visa’s job creation potential under three possible scenarios.

Assuming that, if Startup Visas were available in 2014, 75,000 would be filled, BDS statistics indicate that, after four years, 37,108 firms still would be operating. The openings created by failed companies over the previous three years would have been filled by new Startup Visa applicants.

After 10 years, nearly 100,000 companies will have reached four years and aged out of the visa program. New companies also would have been added over the 10-year period, growing the denominator of new firms by more than the number of available visas.

Under two scenarios, the report demonstrates that companies founded by Startup Visa holders would create between 500,000 and 889,000 jobs, equating to 0.5 percent to almost 1 percent of GDP, respectively.

The third scenario assumes that half of the age four firms would be technology and engineering firms established by H-1B holders, who typically are employed in science, technology and engineering.

Previous research has shown that immigrant-founded technology and engineering startups employ an average of 21.37 people per firm.

This scenario would create, at minimum, 1.6 million jobs over 10 years, or 1.6 percent of GDP, among companies that age out of the Startup Visa program. Adding job counts from younger companies established as new visa slots open and jobs created after Startup Visa companies age out of the program could raise these estimates considerably.

A National Foundation for American Policy analysis of the top 50 venture-capital-backed companies in 2011 revealed that 24 were founded or co-founded by immigrants.

At an average company age of 5.8 years and 153 employees, this small sample of immigrant-founded companies added 27 new employees per year, indicating the potential such companies — or even a sliver of Startup Visa companies — have for extraordinary job creation in the United States.

The Start Uprising: Eighteen Months of the Startup America Partnership

How does a newly formed nonprofit organization tasked with helping entrepreneurs across America effectively serve startups that are in different places, in different industries and with wildly different needs? Region by region, is the central lesson this white paper.

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“The Start Uprising” examines where the Startup America Partnership started and where it is now. It is a story chock full of lessons for anyone interested in being a catalyst for entrepreneurship.

Launched at the White House in January 2011 as a demonstration project by the Kauffman Foundation and the Case Foundation, Startup America Partnership initially focused on helping entrepreneurs get their companies off the ground by delivering free or low-cost services and connecting them with large corporations.

By mid-2012, however, the initiative’s leaders had discovered that what startup entrepreneurs need most is the mentorship and fellowship of other entrepreneurs who can help them avoid missteps and point them toward customers, funders and talent. This learning shifted Startup America Partnership’s focus toward becoming the catalyst for a movement of entrepreneurs, by entrepreneurs, through startup regions.

Pivoting to regional hubs was a response to what the Startup America Partnership team learned was a lack of connectedness among entrepreneurs and is consistent with Kauffman research that challenged misconceptions about where high-growth companies start and what entrepreneurs need to succeed.

The white paper traces Startup America Partnership’s evolution over the past 18 months and includes interviews with leaders of state startup regions.

Startup America Partnership aims to create visible networks so that a startup in one city can be connected to the other startups and leaders in that city, as well as to those in adjacent cities and to the entire country. Once those networks exist, other players, from government to media to educators, can engage and add value.

High-Growth Firms Flourish in Unexpected Locations and Industries, Kauffman Studies Show

The studies examined geographic trends of firms included in the 1982 to 2010 Inc. 500 lists to analyze for the first time how regional characteristics are associated with high-achieving companies and innovations.

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Certain regions of the country continuously produce innovative, high-growth companies that have transcended the economic downturn of the last few years. Surprisingly, those regions include more than the expected locales like Boston and Silicon Valley.

“The Ascent of America’s High-Growth Companies,” a report series released by the Ewing Marion Kauffman Foundation, reveals that high numbers of fast-growing firms are concentrated in unexpected regions and industrial sectors.

The study examined geographic trends of firms included in the 1982 to 2010 Inc. 500 lists to analyze for the first time how regional characteristics are associated with high-achieving companies and innovations. A survey of Inc. 500 founders from 2000 through 2008 also provided insight into the movement of these entrepreneurs from the cities of their alma maters to the locations where they founded their companies.

The first report in the series, “The Ascent of America’s High-Growth Companies: An Analysis of the Geography of Entrepreneurship,” indicates that fast-growing Inc. firms encompass numerous industries beyond the sectors traditionally seen as the reserve of technology-based businesses.

While Silicon Valley, Austin, Texas, and other traditional high-tech hotbeds are well-represented among the cities that house high-growth companies, the research shows that Salt Lake City, Utah; Indianapolis, Ind.; Buffalo, N.Y., and several other Rust Belt icons also have accumulated a significant cache of Inc. 500 firms. The greatest number of Inc. firms is clustered in Washington, D.C., with nearly half of these firms operating in the government services sector.

The study also showed that spending growth in Washington, D.C., since the 1990s – regardless of which party held the White House – has fed the huge complex of fast-growing firms in the D.C. area. The growth of the private sector in the D.C. metro area, among the nation’s fastest-growing metro areas in the past two decades and the first to recover from the housing bubble in early 2009, then, ironically has deep ties to the federal government.

“The Ascent of America’s High-Growth Companies: Founder Mobility,” the second report in Kauffman’s Inc. series, found that 75 percent of company founders started their firms in different metro areas from the ones where they last received a degree. However, 67 percent of the founders remained in the same regions where their alma maters are located.

Cities that educated the most founders, not surprisingly, were most apt to retain the highest number of founders. However, the cities with the highest number of founders – Washington, D.C., New York, and Los Angeles – also had the highest founder attraction rates, indicating that founders are relatively mobile.

Regionally, the South (as defined by the U.S. Census Bureau) had the highest number of founders, as well as the highest number of founders educated, retained, and attracted. Although the fewest number of founders were educated in the West, that region had the second-highest number of founders, founders retained and founders attracted.

Voices of Small Business: Discussion and Policy Implications

Potential job creators – U.S. small business owners – do not view high tax rates as the biggest barrier to their success; it’s the complexity of the tax code that they find most troublesome. Other key concerns they have include overly complicated regulations and licensing requirements.

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These are the key findings in this paper, which analyzes feedback from small business owners about the ease of doing business in their state.

‘Voices of Small Business: Discussion and Policy Implications” focuses on responses to an open-ended question in a survey conducted in late 2011 by Thumbtack.com, an online platform for service providers to connect with customers, in collaboration with the Kauffman Foundation.

The survey itself gathered data from a large sample of 6,730 newly registered professionals concerning the ease of doing business in their respective states. The “Voices” report examined 2,463 respondents’ answers to the open-ended question that asked, “Please let us know any experiences or thoughts you have regarding the ease of doing business in your state.” The analysis revealed three major areas of interest for small business owners: taxation, licensing and regulation, and employment.

Around half of the 15.5 percent who mentioned taxes described the taxes in their state as “high.” Other respondents complained about various taxes, from sales to franchise to corporate income, but also about the complexity of the tax codes and, in some states, the absence of clear, accessible tax information and payment systems. Of those respondents with positive feelings about their states’ tax environments, ease of obtaining tax code information and making payments online were among the reasons for their satisfaction.

The clarity and enforcement of state and local business regulations and licensing requirements – or lack thereof – also affected respondents’ perceptions of state business friendliness. Fully 28.9 percent of those who answered the open-ended question mentioned regulation or licensing, with 75.1 percent expressing negative viewpoints. A common theme was not that regulations were too onerous, but that the layers of regulation – city, county, state and others – made business operations, and sometimes hiring, difficult.

Based on the analyzed data, the paper offers policy recommendations for states seeking to create a business-friendly environment, including:

  • Consider simplifying tax codes, especially sales tax codes, and creating more uniformity among local, county and state policies.
  • Implement easily understood online systems with clear information on the tax code and a mechanism to manage and pay business taxes via the Internet.
  • Make compliance with regulation easier by pushing for conformity among municipal, county and statewide regulation. License or permission requirements by multiple cities and counties will be cumbersome to businesses, and states can help reduce this burden.
  • Establish a single, easily understood website where individuals can establish a business and see all relevant regulatory policies for their establishment.
  • Evaluate licensing regimes and enforcement. If licensing is vital to provide quality assurance, states should enforce it. If states cannot enforce it, they should disregard such licensing schemes, as they hurt competition.