To Out-Innovate Global Competitors, the United States Should Embrace Immigrant Talent

The Silicon Valley model of innovation stands to suffer 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 over $1 billion. And that figure is likely an underestimate since the authors do not include publicly-traded companies. During Silicon Valley’s apex in the 2000s and 2010s—when Apple introduced the now ubiquitous iPhone, Google became the standard for searching the internet, and Tesla pushed boundaries by mass-producing battery-powered electric vehicles—33 percent of the venture-backed technology firms that went public between had at least one immigrant founder. Immigrants educated in the United States are a critical part of this story. Today, nearly one quarter of 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 technology 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

Restricting immigrant talent hurts U.S. innovation in the long run. Economists have found that quotas preventing Eastern and Southern European-born scientists from moving to the United States in the 1920s caused major damage to U.S. innovation that persisted into the 1960s. And because collaboration is an important part of scientific advancement, the loss of this talent also hurt U.S.-born scientists. The same study estimated that the U.S. produced 60 percent fewer patents (a common measure of innovation) in the scientific fields of those who were prevented from immigrating to the United States. Finally, these quotas cut innovation in U.S. businesses by 53 percent. Many of these talented scientists went on to immigrate to other countries.

Meanwhile, Canada has today positioned itself to benefit from would-be U.S. 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 ToWhether coming 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 U.S. innovation. Barriers to entry for foreign STEM students and startup entrepreneurs undermine U.S. policies to spur innovation. And without that innovation, the United States will not out-compete our strategic competitors, falling short in building the technological prowess needed to ensure the prosperity and security of the American people in the decades ahead. 

Laura Taylor-Kale is Fellow for Innovation and Economic Competitiveness at CFR. This article is published courtesy of the Council on Foreign Relations (CFR).