If the US government really wants to stimulate job creation, it should do much more to welcome entrepreneurs and other skilled individuals from abroad who want to build companies in the United States. The data are clear. Immigrants found companies at greater rates than native-born Americans, and are disproportionately successful in starting successful high-tech firms. Recent analysis of the Fortune 500 finds a large number of those companies with founders who are immigrants or children of immigrants. Welcoming more such job creators would help expand US employment; boost demand for housing, helping to alleviate depressed real estate prices; and renew the innovation engine that drives long-run growth in living standards for all Americans.
Here are two simple ideas for bringing to the United States more entrepreneurs who could build large-scale companies. The first, embodied in the revised version of the Kerry-Lugar StartUp Visa Act of 2010, would grant entrepreneurs from other countries entry into the United States. Initially, these entrepreneurs would be eligible for temporary visas based on either the outside capital they had attracted or revenues from US sales they had already recorded. Permanent work visas or green cards would be granted once they hired a minimum number of US workers. Although the Kerry-Lugar provisions limit the number of these startup visas, there is a strong case for having a high limit--or none at all--given the jobs each entrant would create without "taking" a job from any other US worker.
Such a visa program, especially one without caps, would enable many potential founders of large-scale companies to realize their dreams and in the process strengthen the US economy. These foreign-born entrepreneurs would include some portion of the roughly one million skilled immigrants already here on temporary H1-B visas, as well as some of the more than 60,000 foreign students who receive an undergraduate or graduate degree in science, technology, engineering and math (STEM) from a US university each year.
A second, mutually reinforcing idea would be to grant green cards to foreign students when they receive their STEM degrees from a US university. Although a case can be made for extending this idea to all foreign graduates, regardless of the kind of degree, it makes sense to start with STEM graduates. The skills they possess underpin the technological advances that drive improvements in productivity and living standards. While most of the STEM graduates who would receive visas would compete with US workers for jobs, there is (and will likely continue to be) a strong demand by US firms for workers with this kind of education. The US economy can only profit from having more skilled talent. And in the long run, given the greater propensity of immigrants to found businesses, it's likely that many of the STEM graduates allowed to remain in the United States now would go on to form substantial businesses in the future that would hire American workers.