With the recent passage of the Inflation Reduction Act, the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, and the Infrastructure and Jobs Act, the United States is poised to invest over $133 billion more in innovation—as well as critical and green technologies— which will renew America’s economic competitiveness. That recent debates about innovation and economic competitiveness elevate science, technology, and engineering as national security imperatives bodes well for ensuring American prosperity and stability. Innovation – creating and developing ideas, building scientific knowledge, developing new products and processes that are then scaled into new ventures – is essential to economic security in a technology-driven age. Out-innovation will allow the United States to compete effectively against China and other strategic competitors in the battle for technological supremacy and economic security.
To that end, the CHIPS Acts seek to strengthen domestic talent by funding science, technology, engineering, and mathematics (STEM) education programs. We need this badly. The US is currently not producing enough people with STEM degrees and training to work in the US-based semiconductor sector. Increasing homegrown STEM talent will do much to help our aging manufacturing and industrial workforce, and continue to support the development of future innovators. But the race for STEM talent is a global game, not a regional or local one. What is lacking is action to attract, grow, and retain the many talented foreign students and immigrants who come to the United States and become start-up entrepreneurs. If the United States is to remain competitive and innovate strategic competitors, it must attract and retain foreign talent as well.
Innovation is a cornerstone of social and economic progress, but an innovation strategy that overlooks the importance of immigration threatens strategic goals and economic competitiveness. Manufacturing and technology industry advocates have warned for years that underinvestment in STEM education, a laissez-faire policy toward basic science research and development, and immigration laws that prevent U.S.-educated STEM graduates from remaining in the U.S. all undermine American Innovation.
Renewing America
Ideas and initiatives to renew America‘s economic strength.
Ideas and initiatives for renewing America’s economic strength.
The Silicon Valley model of innovation will suffer the most. According to a 2018 study by the National Foundation for American Policy (NFAP), immigrants have started or are key members of the management teams of 55 percent of startups valued at more than $1 billion. And that number is likely an underestimate since the authors don’t include publicly traded companies. During Silicon Valley’s heyday in the 2000s and 2010s—when Apple introduced the now-ubiquitous iPhone, Google became the standard for searching the Internet, and Tesla pushed the boundaries by mass-producing battery-electric vehicles—33 percent of the venture-backed tech companies that went public between had at least one immigrant entrepreneur. On the same subject : United States Attorney and United States Marshals Announce Task Force Results. Immigrants educated in the United States are a critical part of this story. Today, almost a quarter of a billion dollar startups had a founder who first came here as a student. Nearly 12 percent of privately held “unicorns,” companies valued at $1 billion or more, were started by immigrants who came to the United States as children.
Beyond Silicon Valley tech firms, many of today’s most valuable companies have immigrant roots. Immigrants have founded 43.8 percent of Fortune 500 companies, which employ more than 12.8 million people globally.
Limiting immigrant talent hurts American innovation in the long run. Economists have found that quotas that prevented Eastern and Southern European-born researchers from moving to the United States in the 1920s caused major damage to American innovation that persisted into the 1960s. And because collaboration is an essential part of scientific progress, the loss of this talent also hurt US-born researchers. The same study estimated that the United States produced 60 percent fewer patents (a common measure of innovation) in the scientific fields of those prevented from immigrating to the United States. Ultimately, these quotas cut innovation in American businesses by 53 percent. Many of these talented researchers immigrated to other countries.
Meanwhile, Canada today has positioned itself to take advantage of potential American high-skilled immigrant talent and entrepreneurs. The Canadian Startup Visa Program targets foreign entrepreneurs with the skills to start innovative businesses that create Canadian jobs and support growing technology hubs in Vancouver and Toronto.
Whether you come to the United States as young children, as students seeking higher education, or as adult professionals, researchers or entrepreneurs, immigrant talent is a critical component of American innovation. Barriers to entry for foreign STEM students and start-up entrepreneurs undermine US policies to stimulate innovation. And without that innovation, the United States will not outperform our strategic competitors and fall short in building the technological prowess needed to ensure the prosperity and security of the American people for decades to come.
