Immigrant Entrepreneurs Are Tech Leaders

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A study from the non-partisan National Foundation for American Policy has found that immigrants have created more than half of the U.S.-based technology startup companies.

Researchers found that because of the entrepreneurship of immigrants, 44 new tech companies were operating in the United States during 2016, with a combined valuation of more than $168 billion.

Known as unicorns in Silicon Valley, the startups have individual values of more than $1 billion and create an average of 760 jobs.

The study also found that immigrants make up more than 70% of the top management or development positions for these companies.

Most of the immigrant-founded companies (32 of the 44) are located in California, followed by New York (six), Massachusetts (four) and Illinois (two).

The NAFP study found that about a quarter of the immigrant entrepreneurs who founded these companies entered the United States on student visas. For years, Silicon Valley leaders, such as Facebook’s Mark Zuckerberg and Microsoft founder Bill Gates, have urged Congress to increase the number of H-1B visas to allow more highly skilled foreign workers and entrepreneurs to come to the United States.

The study results suggest that lawmakers who want to see U.S. economic growth should listen to Gates and Zuckerberg.

Among the other NAFP findings:

  • The 44 tech company founders came from 21 countries, most of them from India (14), Canada (eight), the United Kingdom (eight), Israel (seven) and Germany (four).
  • The founders attended elite U.S. universities with highly regarded reputations for research and development in technology. Six attended Stanford, earning graduate or post-graduate degrees, four went to Harvard and two to MIT.
  • Some of the most successful startup founders include immigrants Alexander Asseily of Jawbone, Eric Setton of Tango, Tomer London of Gusto, Borge Hald of Medallia and Amr Awadallah of Cloudera.
  • In terms of the largest immigrant-founded employers, Elon Musk’s SpaceX leads the way with 4,000 employees based in Hawthorne, Calif. Mu Sigma of Chicago employs 3,500, Palantir Technologies of Palo Alto 2,000 and Zenefits of San Francisco about 1,500.
  • Tech leaders including Mark Zuckerberg and Microsoft founder Bill Gates have called for increasing the number of H-1B visas that let skilled foreign workers stay in the country. They argue that immigration greatly benefits the tech community, and that it is difficult for companies to hire foreign-born workers and for immigrant entrepreneurs to start businesses due to the visas’ constraints.
  • The study’s authors said: “Companies with immigrant founders have produced a variety of useful products and services to benefit U.S. consumers and make U.S. companies more productive. Uber has transformed travel in American cities, while SpaceX aims to enable Americans to travel to Mars. Gusto makes it easier for employers to administer payroll, while ZocDoc allows patients to find in-network neighborhood doctors and book appointments online. Stripe, started by two Irish immigrant brothers, facilitates online payments for businesses and their customers, while AppDynamics, Cloudera, CloudFlare, Tanium, Actifio, Mu Sigma and others help U.S. companies to maintain strong information technology systems to compete in the global marketplace. Sports fans enjoy playing fantasy sports at FanDuel and gamers relish the offerings of Razer.”

    The National Foundation for American Policy is a non-partisan think tank based in Arlington, Va. The study’s authors used public information from the companies and created biographical profiles of their founders.

    Long Waits for Most H-1B Visa Applicants

    Washington has ignored the pleas from Silicon Valley to expand the H-1B program and make the process easier. Getting the visa can take months and requires some tedious bureaucratic navigation. Many immigrants who seek the H-1B find it necessary to hire an immigration lawyer to handle the application process.

    Congress caps H-1B visas at 85,000 per year, and 65,000 are set aside for foreigners who are applying for the first time. Another 20,000 are designated for foreign students who are graduating from U.S. universities, the idea being to entice foreign talent to remain in the country.

    Members of both political parties have supported allowing more visas for immigrants with advanced degrees. The U.S. Senate passed a comprehensive immigration reform bill in 2013 that would have greatly increased the H-1B visa allotment. The demand for H-1B routinely exceeds the supply. During 2015, the lottery to obtain a visa exceeded capacity in only one week. U.S. Citizenship and Immigration Service reported it received about 233,000 H-1B petitions during the filing period, roughly 150,000 more than were statutorily allocated.

    Another complication is that the government requires that H-1B visas are sponsored by existing companies. So an entrepreneur who intends to start a business won’t find an easy path with the H-1B. In nearly all cases, the H-1B applicant faces a long wait and plenty of paperwork.

    The NFAP authors said that if Congress moved forward and passed legislation that allowed so-called “startup visas” for foreign entrepreneurs, the U.S. economy could benefit from between 1 million and 3.2 million new jobs over the next decade.

    The researchers said a key reason a startup visa (proposed in the EB-JOBS Act of 2015) could create many new jobs is because “it would help unleash pent-up entrepreneurial activity — those eager to start new businesses but unable to do so because they are waiting in the employment-based immigrant backlog or in a visa status, such as an F-1 status, that does not allow an individual to manage a new company.”

    Zuckerberg Backs More Foreign Workers

    The NFAP study, which was released in March 2016, came at a time when the U.S. political climate had shown signs of turning against immigrant workers and entrepreneurs.

    Republican candidate Donald Trump set off a firestorm in 2015 when he proposed building a massive wall along the U.S.-Mexico border to keep Mexican migrants out. Another GOP candidate, Sen. Ted Cruz of Texas, also offered immigration plans that were widely viewed as restrictive or even oppressive toward foreign labor.

    Both Trump and Cruz claimed that immigrant workers were taking jobs from Americans.

    The NFAP research, however, suggests that immigrant entrepreneurs can create jobs for American workers and contribute to the growth of the U.S. economy — not just in Silicon Valley, but across the country. Facebook’s Zuckerberg has used social media to speak against anti-immigrant politics and make the case for allowing more foreign workers and entrepreneurs to come into the United States.

    "I hear fearful voices calling for building walls and distancing people they label as others," Zuckerberg said. "For blocking free expression, for slowing immigration, reducing trade, and in some cases around the world even cutting access to the internet… It takes courage to choose hope over fear. People will always call you naive, but it’s hope and this optimism that’s behind every important step forward.”

    The Facebook CEO said his company was determined to help Americans create worldwide bridges to bring people — and workers — together. “We stand for connecting every person for a global community, for a free flow of ideas and culture. We are better off for it.”