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Edward Luce
Edward Luce is the Washington columnist and commentator for the Financial Times. He writes a weekly column, FT's leaders/editorials on American politics and the economy and other articles.
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Ron Hira
Ron Hira is an Associate Professor of Public Policy at the Rochester Institute of Technology where he teaches courses on technological innovation, communications and public policy. He is a licensed professional engineer, a research associate with the Economic Policy Institute and the co-author of Outsourcing America.
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Robert Litan
Robert Litan is the Director of Research at Bloomberg Government. He has served as the Vice President for Research and Policy at the Kauffman Foundation and a Senior Fellow in Economic Studies at the Brookings Institution, where his research includes topics in regulation, financial institutions, telecommunications, entrepreneurship and general economic policy.
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Vivek Wadhwa
Vivek Wadhwa is an academic, tech entrepreneur and author of The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent–which was named by The Economist as a Book of the Year of 2012.
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America's immigrant entrepreneurs
Host Ray Suarez talks with Rochester Institute of Technology's Ron Hira about the impact of U.S. immigration policies on entrepreneurship in America. We'll also hear from an immigrant entrepreneur living in America on the H1-B visa program.
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Adapted from the broadcast audio segment; use the audio player to listen to the story in its entirety.

Though many countries are pushing hard to recruit the best and the brightest from abroad, there are a few critics who argue the U.S. has nothing to worry about in the race for global talent. I spoke to Ron Hira, Associate Professor of Public Policy, at RIT, the Rochester institute of Technology.

Ray Suarez (RS): In your view, is the United States losing the global race for highly skilled entrepreneurial talent? 

Ron Hira (RH): No, I don’t think we’re losing the race.  I think that we’re doing just fine.  We have a lot of active policies to encourage entrepreneurship both here, as well as for immigrants. 

RS:  A lot of countries around the world are trying to design new policies, incentives, access to easy loans, tax payer money - is there a bidding war now for the brightest and the best? 

RH: There may be a little bit of a bidding war, but I don’t think it’s a problem - I think more entrepreneurship around the world is a good thing.

RS: So what should the United States Government be doing? Should it let the private market work it’s own magic? What’s the best posture for a government that wants to encourage people who have a bankable idea - to come here rather than go somewhere else?

RH: Well I think we already have a pretty robust regime. If you follow at all the foreign student numbers for example, there are still large inflows of students coming in from India and China and other countries - so I think we are a very attractive place. I think there may be some changes we need to make in terms of our green card policies, but I don’t think there are any fundamental problems in terms of immigration and entrepreneurship - or more broadly, entrepreneurship within the US.

RS: Haven’t we kept some of those students in the past, almost by default? Tech students from China and India stayed here or tried to stay here after graduation, just because things weren’t very promising back home - but now India and China may be good places to go, and they’ll leave after we educate them to a high standard.

RH: People are mistaking the causal effect here. The reason that they’re going back is because there are huge opportunities overseas and that’s mostly because of the offshoring of American jobs and American technology by U.S. based companies.  For example, in the case of India, IBM now has more workers in India than they do in the U.S.  The opportunities are growing much faster in India than they are in the U.S., so it’s a pretty natural move for people like my cousins to go back, rather than to stay.  It’s a matter of job opportunities - it is not really a question of policies around entrepreneurship. 

RS: So there’s really in your view, not much that we could do to get those kids to stay?

RH: No, I think we’re already keeping a lot of them.  It’s not around entrepreneurship, I think that the main changes need to be about a path towards permanent residents, and once they have permanent residence, then they can become entrepreneurs fairly easily. 

RS: Giving out more green cards to entrepreneurs is one of the few areas where there is widespread agreement in America’s polarized immigration debate. We will come back to Ron Hira, but we pause for a moment to give a sense of what life is like for immigrant workers who come here on a temporary H-1B visa. We hear this personal story from a highly skilled German:

“My name is Jens Votsovik, and I am a research associate studying brain diseases at the Mayo Clinic in Rochester, Minnesota. I got my H-1B in October 2012. My wife was actually the first to go to the U.S - she came in 2005. We have a daughter and a son -  both kids born here in the U.S., and both are U.S. citizens.  Unfortunately my wife had to go back start a residency in Denmark.  So my family moves back and forth between the U.S. and Denmark, and of course I’m really missing my family, and I’m just waiting for them to come back. That is the major thing in my life that I’m waiting for.  What people don’t know is that it is actually quite stressful to be on any kind of visa status. You are definitely restricted - it’s time limited - and If anything happens to your working contract, that could be really horrible, because you have to leave the country more or less immediately, and move back to wherever you’re coming from. And that would mean also your kids have to leave whether they are U.S. citizens, whether they go to U.S. schools,  whether we have a house, an apartment, or anything - and that’s really a threat.  Sometimes when people get a green card they say, “Oh I’ve got my freedom”, because they can stay here - they can apply for any kind of jobs. They don’t have the threat in their back - that if something happens to their employment they have to leave the country - and that is definitely freedom.  I am definitely interested in getting a green card, but as of right now, it is too expensive for me.  The ideal future would be that we would live altogether as a family in one place, and spend the rest of our lives here in the U.S. I mean we could just change our origin a little bit and become Americans - that’s how I feel.”

RS: Ron Hira, Associate Professor of Public Policy at RIT, you’ve been critical of the design of the major programs in this area - the H-1B and the L-1 visas - what are the problems?

RH: Well, the H-1B and the L-1 visas are used largely to bring in cheaper indentured workers - and that’s outside the letter, but also more importantly the spirit of what those programs are supposed to be designed for. 

RS: In this context, indenture is a pretty strong word - it implies that these workers are not free actors.  What makes this like indentured servitude to you?

RH: Well, it’s an employer-driven system, so the visa’s not held by the worker - the visa’s held by the employer.  And because the employers can pay below market wages, they have every incentive to keep the worker sort of under wraps.  So workers do have some limited mobility on the H-1B, but it’s pretty limited. Basically the worker is tied or indentured to that employer. Once they get a green card, of course, they can become much more mobile.

RS: But can they even look for other work if they’re here under the auspices of one employer in particular?

RH: Yeah, they can.  Under limited circumstances they can switch employers, but they would have to get an employer to sponsor them for an H-1B - and that does happen, but not very much - so the reality is that most of these folks are really tied to their employers - who then can, besides legally pay them below market wages, ask them to do things.  If someone complains about their job or about their working conditions, the employer can threaten them - if they lay them off they’ll be out of status and will have to leave the country.

RS: Recently I was in Ireland and met a young Indian-born engineer, who had come to work for an Irish-based tech multinational, but decided along the way that he had an idea that’s he’d like to start-up himself. He was able to get Irish government encouragement, space to act as an incubator for his business and grants, which were then followed by soft term loans. Could that happen in the United States?

RH: I think If we changed the law. I would fully support changing policy to encourage that  kind of activity, but we should certainly encourage the entrepreneurship - but it’s not the big problem here in terms of high skill immigration.  It’s a problem when we project every single tech worker, every single guest worker coming in as being this entrepreneur. I think there is a larger issue too, which is this one about hoping that entrepreneurship is somehow going to be our panacea or our savior.  In reality it’s large companies that employ large numbers of people and are very innovative.

RS: Others agree, while supporting entrepreneurs is a good thing, that it’s the large companies, not so much small ones, that are driving innovation in the U.S. 

RS: MIT’s Thomas Kochan is the George Maverick Bunker Professor of Management at MIT’s Sloan School of Management.

He says, “The the Bell Labs, the Xerox PARCs, the IBM Research Laboratories were incubators of a lot of the modern high-tech industry.  Unfortunately, those large firms have reduced their emphasis on that kind of R&D, and we don’t have as much of that as we used to have in the economy.” 

RS: Tom Kochan says we still have the Google’s and others like them, that are doing a lot to generate products and services but... 

Thomas Kochan (TK): We need to get back to a situation where we have the equivalent of the Bell Labs that are really generating all kinds of new spinoff ideas that produce sustainable organizations and keep their own industries innovating - and that’s a real resource that the U.S. needs to recreate, and the big companies need to recreate and unfortunately we don’t have as much of that right now as we need.

RS: Like many experts, Thomas Kochan believes the evidence is clear that immigrant entrepreneurs help the U.S. economy - but he also wants the U.S. to focus on strengthening its STEM - Science, Technology, Engineering, and Math - programs here at home. 

TK: America still has an enormously talented workforce and an enormously talented young population, potentially ready to take the next generation of high skilled, high technology jobs and professions.  We simply have to invest in them and the colleges - we have to encourage them to get the right kind of skills and right kind of technical training, the right kind of degrees, and then firms in the United States need to reach out to the universities to build the networks that we know work, to hire those individuals and continue with lifelong learning to keep their skills current. So, I don’t think we are going to lose the race for talent unless we lose it by design - by the design of companies that say, we’d rather just outsource this work to other countries and other organizations - and if we do it, we’re doing it to ourselves.

RS: Kochan argues that if we can continue to provide opportunities for college graduates, whether they’re domestic or foreign born, we will grow our economy.  He is also untroubled by the fact that more foreigners, such as Indians, are staying home and working in good jobs.

TK: I think it’s inevitable. Clearly with all the modern communication technology, it’s not clear that a skilled worker in India needs to come to the United States simply to develop deeper skills or to get so familiar with the unique technology of a particular firm or industry - so I think it’s becoming easier to build these skills on a global basis, and I think that makes the H-1B visa probably less attractive to individuals.

 

Immigration and the Global Talent Search / Produced by Samara Freemark, Bianca Vazquez Toness and A.C. Valdez. and edited by Martha Little, with additional production help from Flawn Williams. Special thanks to Colm Coyne/ Web Producer: Philippa Levenberg / Images courtesy of Flickr Creative Commons contributors: Tyson Crosbie and SEIU International, and AP photos by Andres Kudacki, Grand Island Independent, Lane Hickenbottom and Rafiq Maqbool. Video courtesy of PBS Newshour.

Host: Ray Suarez / Length: 51 minutes / Airdate: May 2013

This program was made possible with the generous support of the John Templeton Foundation and the Stuart Family Foundation.

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