Archive by Author | jamesleigh

America Faces Competition in Attracting Entrepreneurs

Competitive programs that attract entrepreneurs to other countries could mean a loss of talent for the United States.

Much like how our own proposal provides incentives to keep startups local, the Chilean government has started a program to make Chile the “Silicon Valley of Latin America.”  In attempts to attract the best entrepreneurs from around the world, Chile has offered them a $40,000 grant and a one year work visa, as well as office space and fast-track paperwork that enables them to open bank accounts, in return for living in the country for six months.  Because it is fully sponsored by the government, entrepreneurs in the program have access to being in the right circles, giving them access to some of the best mentoring, venture capitalists, market information, and networking available in Chile.

Steve Wozniak, who founded Apple with Steve Jobs, believes the program is effective, saying,”I would love to go there if I were young. This is the greatest program I have ever seen of this type in the entire world. I will recommend it even to my own kids.”

In face of global competition like this, America would do well to, at the very least, allow innovative talent into the country.  In an age where countries from around the world are able to offer increasingly attractive programs, the United States will continue to lose more and more talent until it reforms its current policies.

More about Start-Up Chile can be found here.


The Decline

The trend of immigrants founding companies in the United States has begun to reverse.  In an article by Vivek Wadhwa, author of the book “Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent,”  we can see that current policies are causing fewer immigrants to create startups in the United States.

In a study from 2007, it could be seen that immigrants were key members of over 50 percent of the starups in Silicon Valley since 1995.  However, a new study has shown that this number has declined since then, as fewer potential immigrant entrepreneurs are willing to deal with the visa laws and immigration limbo.

One of the biggest problems is found in the bottleneck in the employment based visa process.  Two of the biggest contributing nationalities, the Chinese and Indians, face at least ten years in immigration limbo when applying for their green cards.  This is due to a maximum of 7 percent of these green cards being allocated to each nation, and China and India have a disproportionately large number of hopeful immigrants, comprising more than half the skilled immigrant labor force.  The current policies also force the immigrants who are waiting in “limbo” to stay in companies who sponsor their visas, limiting their potential for innovation.

Much like our own proposal, Wadhwa impresses the importance of a startup visa act, saying that keeping the talent in the United States could create hundreds of thousands of new jobs, helping the economy get back on its feet.

Immigrant Founder may be Forced to Leave

Asaf Darash, immigrant founder of the growing American company Regpack, is now being forced out of the country.

Despite creating 15 American jobs with his U.S. company, Asaf Darah faces the possibility of being deported.

After three years researching his thesis at the University of California, Israeli born Asaf Darash decided to stay in the United States.  Here, he founded  a software company, Regpack.  This two year old company is still going strong and shows impressive growth;  as of recently it was adding about 30 new clients each week.

However, now Darash has met a barrier that may prove to cripple his efforts.  Instead of focusing on running his company, he is fighting to remain in the country.

He was able to start his business because he came here as a visiting scholar.   He then applied for an H-1B visa, and which is where he ran into trouble.  He was unable to satisfy  the employer-employee relationship required for the visa, and is now facing what he calls “bureaucratic hell” as he spends all day attempting to find the correct documents and deal with lawyers.

He is also seeking an alternative route to stay in the country, by applying for the E-2 visa.  However, the process may be lengthy and he has had to take out a second mortgage on his house in Tel Aviv in order to provide enough capital.  However, there is no guarantee that he will be able to stay, as the wait for such visas is quite substantial.

Stories just like this are all too common.  Unfortunately for the United States, its own policies have ensured that immigrant entrepreneurs, people our economy needs, are unable to remain.  Asaf Darash sums up the issue well, saying that “Regpack is not going away. It’s going to grow. But the question is, will it grow here or in Israel?”

See more:

Interview with Vivek Wadhwa

In an interview, Vivek Wadhwa, professor at Duke University and author of The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent, explains why current American policies are failing immigrant entrepreneurs.   It has become incredibly difficult for foreign entrepreneurs to immigrate to the United States.  Wadhwa identifies the problem to be an insufficient number of visas available.  Like us, he realizes that current policies make it too difficult for foreigners to contribute to the American economy, and that new laws will be required to fix this issue.