Immigration policy must target entrepreneurs

Opening the doors to skilled talent will boost economies on both sides of Atlantic, says leading academic

Vivek Wadhwa: “We’ve messed up the magic formula. It used to be that you could get a green card [in the US] within 18 months. Now it takes about 15 years.”

Vivek Wadhwa: “We’ve messed up the magic formula. It used to be that you could get a green card [in the US] within 18 months. Now it takes about 15 years.”


In just a few years, successful entrepreneur-turned-academic Vivek Wadhwa has become the go-to guy in the United States for research into a phenomenon perhaps best recognised in Silicon Valley: the close connection between entrepreneurship and highly skilled immigrants.

Work he produced five years ago showed that more than half of Silicon Valley companies had an immigrant founder, often Indian or Chinese. His writings for a range of publications point to more evidence: 40 per cent of Fortune 500 companies were founded by first generation immigrants or their children.

Immigrants are more than twice as likely to start a business. They comprise three-quarters of the key product or management teams in VentureSource’s 2011 top ranked venture-backed companies.

And now, Wadhwa has become a leading voice for US immigration law reform, an issue that, having been highlighted by President Barack Obama, has made its way onto the current political agenda – writing opinion pieces, quoted by politicians.

Trying to catch up with him can be hard. One week he is on the US east coast, where he holds positions at Duke and Emory universities. The next, he’s back to his home base in Silicon Valley, where he holds another position at Stanford University, and is vice-president of academics and innovation, Singularity University, a unique venture based at Nasa’s Silicon Valley research park.

Sitting in an old Spanish-style building part-occupied by Singularity University – and once used as astronauts’ quarters – the amiable Indian native argues that, given economic stagnation, not only should the US introduce a proper entrepreneur visa, but it should dump so-called “diversity visas” (a significant share of which have been historically targeted at Ireland) and instead give them to skilled workers and graduates in Stem (science, technology, engineering and maths) subjects.

“If you look at Silicon Valley during the last technology boom, 1995 to 2005, 52 per cent of the start-ups have been founded by immigrants,” he says.

“I’ve been researching what makes Silicon Valley tick, and it’s really the diversity. It’s the free thinking, the sharing of ideas, a fearlessness to take risks, that makes it what it is. And all of this comes with the immigrants who are coming here.

“You come here knowing you have to prove yourself again and you have to succeed at all costs. So you’re a risk taker. You come with a different background. You come with a global outlook.”

That’s why he believes immigrants are so driven to found companies. But he is alarmed that the H1B immigrant visa system, which for years has been oversubscribed and in huge demand from technology companies, is so broken that those immigrants are leaving the US and returning home to establish their start-ups – to the detriment of the entrepreneurial ecosystem and the entire US economy.

Entrepreneurial ecosystems
“We’ve messed up the magic formula. It used to be that you could get a green card within 18 months. Now it takes about 15 years, and the trouble is you can’t change jobs within that 15 years, so if you started as a computer programmer, you can’t now become a manager, you can’t now move in to product design or project management.

“You’re stuck in the same stupid job as when you started this whole process. So the problem is, you’re going to get frustrated and get the hell out of the United States.”

This is especially true now, as for Indians and Chinese, growing economies mean they can be just as successful back home. And, he says, they are – because they are not staying in the US, entrepreneurial ecosystems are “booming” elsewhere.

“In South America, India, China, a great big boom. You're not seeing the same in Europe, because there are other obstacles to entrepreneurship there. Namely government, and attitudes, and society and so on.”

Isn’t it better for these entrepreneurs to go back home and help build their own economies?

“Yes. It’s better for the world, but it’s not better for the United States,” he says with a big laugh. “I’m speaking as a true American! As a pure, selfish American.”

And even if the opportunities are as good – sometimes better – in their home countries, he insists that most would prefer to stay in Silicon Valley with it’s gentle climate, energetic business atmosphere and other amenities.

“What we’ve done is that America’s giving billions of dollars in foreign aid to countries, without realising it’s doing that. They are educating people and then sending them back. They’re sending entrepreneurs back. I mean, what a gift to the world, it’s like money falling out of their pocket.”

But if diversity is also historically important for entrepreneurship, isn’t it important to keep some H1B visas for that purpose rather than for Stem skills?

First-generation immigrants
“You don't need diversity in America; there is no shortage of diversity,” he says. And where they go – as to Ireland right through the Celtic Tiger boom when arguably Ireland needed them least – is just politics anyway, he says. If you want to help people through diversity visas, bring them in when the economy is good and there’s a wide range of jobs available.

But he has noted that it is also the children of first generation immigrants who go on to create successful companies, such as Yahoo’s Jerry Yang.

“Yeah, I don’t disagree with that but I don’t want to wait 30 years to fix the economy! In 30 years, it will be a different world. I’m saying do what you can now, fix it short term, because the economy is sick.”

What about the argument – accepted by Obama – that immigration overall, especially the situation of undocumented immigrants, needs to be fixed? Is that aspect less important than bringing in Stem skills?

“You need to do both. But let’s go for the low-hanging fruit, which is the entrepreneurs and the skilled workers-and then we worry about the unskilled.”

His worry is that there’s already evidence of a decline in US entrepreneurs starting companies based solely on the difficulty in getting an H1B. His recent research has shown a drop in foreign entrepreneurs from 52 to 44 per cent within the last nine years.

“The economy is not exactly in stellar shape. Yet with another 10,000 start-ups, the economy would be booming.”

Immigration reform
He is hopeful that the US may at last be at the point when immigration law change will come, not least as senior business figures are also pushing for reform. Only last week, a long roster of them sent an open letter* to the president pushing for such change to benefit technology companies.

“There is more momentum now than there has ever been. If there was ever a chance it is going to get through, it’s going to be now.

“But that doesn’t mean it’s going to get through. I don’t underestimate the incompetence of our politicians,” Wadhwa says with another laugh.

And would he advise a similar approach towards immigration reform for the Irish Government?

“Yes. Absolutely. The Irish Government needs an influx of entrepreneurship. I would have Ireland open the door to all of Europe and the rest of the world, let the entrepreneurs from anywhere come there. It would be an amazing boost to the Irish economy if they would do it.

“I believe they could create a programme to create a few thousand start-ups at almost no cost which would be a very powerful boost to the economy.

“Just bring the entrepreneurs in. You don't have to give them citizenship, just give them temporary visas. Let them be there for five to 10 years. Let it be the pathway to getting permanent residence.”

Successful companies
The Irish Government may have a chance to hear that first hand, as Wadhwa will be a keynote speaker at thee inaugural MBA World Trophy, which runs from May 16th to 18th in Dublin (

So why did he go from entrepreneurship to academic work? It wasn’t what he expected to be doing after founding two successful companies after immigrating to North Carolina in the 1980s, he admits.

“I had a heart attack,” he says, smiling. “So I became an academic. And as an academic, I started researching the things that I used to be part of. Entrepreneurship, immigration, competitiveness. I shifted focus because I had to. And it’s a lot of fun.”

* See for text of open letter to President Barack Obama

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