The Immigrant Exodus | Vivek Wadhwa

Summary of: The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent
By: Vivek Wadhwa


In ‘The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent’, author Vivek Wadhwa dives into the challenges faced by immigrants in the US and the potential consequences of America’s outdated policies. Throughout the book, Wadhwa draws from his personal experiences, offers historical context, and presents research findings to discuss the impact of immigration policies, particularly on skilled workers in the tech sector. This summary will challenge you with thought-provoking statistics, walk you through the evolution of immigration policies, and present key proposals for securing America’s place as a global leader in innovation.

Vivek Wadhwa: The American Dream

Vivek Wadhwa, a computer science graduate from the University of Canberra, left Australia in 1980 to pursue his American dream. He took a low-level programming job at Xerox and, after 18 months, obtained his green card. Wadhwa later on ventured into entrepreneurship, launching successful start-ups such as Seer Technologies and Relativity Technologies, which generated thousands of jobs. Following a near-fatal heart attack, Wadhwa began a teaching and research career at Duke University’s Pratt School of Engineering. His outstanding contributions to the US led him to win the “Outstanding American by Choice” award in 2012.

Shifting Entrepreneurship Power

Immigrant-led high-tech firms in the US have created thousands of jobs over the years. Indians and Chinese immigrants led a quarter
of these companies in 1998. In the Silicon Valley, they began or co-created over half of such firms. However, existing American immigration laws and policies are preventing
these immigrants from contributing to the economy in the best way possible. Obtaining a green card became increasingly difficult in the years following 1995. The result was a brain drain that could have been avoided had the US government decided to introduce simple, direct, and,
obvious changes to immigration policies. Chinese and Indians hold a disproportionate number of H-1B visa, only sponsored by employers, which they must maintain or risk deportation. This system means that immigrant workers do not have the freedom to move to different companies unless they are willing to leave the country. If the US government could change this outdated system, immigrants could contribute more to the economy, creating more jobs and furthering the US’s position as a world leader in innovation.

The Immigrant Entrepreneur Dilemma

US visa restrictions are pushing skilled immigrant entrepreneurs towards countries with attractive startup ecosystems. Many talented immigrants experience difficulty obtaining visas to start a business in the United States, causing them to pursue opportunities elsewhere. The EB-5 visa program is the only existing visa category for entrepreneurs looking to launch companies in the US, but it requires business owners to show that they have significant capital. This proves challenging for many technology startups who need to raise funding but don’t qualify for EB-5 visas. In addition, the percentage of Silicon Valley startups created by immigrants dropped significantly in 2012, prompting increased competition from other countries that offer visa incentives for entrepreneurs. Despite this, a thriving technology ecosystem with a high number of talented foreign immigrants remains essential to promote growth in the industry.

The Power of Immigrant Entrepreneurs

Immigrants create a significant impact on US job growth and company formation. They are twice as likely as native-born Americans to start a business and produce 28% of new US firms, despite being only 12.9% of the population. Famous immigrant entrepreneurs include Vinod Khosla, Sergey Brin, and Elon Musk. Start-ups generate 65% of new US jobs, and immigrants are crucial managers in 75% of the country’s top venture-funded firms. They filed 24.2% of all international patent requests in 2006, with most coming from China, Taiwan, or India.

Immigration Act of 1924

The Immigration Act of 1924 limited immigration to 2% of the US population from any nation and set quotas for immigrants. The 1965 Hart-Celler Act broadened these quotas, making it easier for US citizens to bring in their families. This change fueled a spike in immigration. In 1967, 1,321 scientists and engineers migrated from Taiwan, and by 1990, 25% of California’s tech companies’ scientists and engineers were immigrants. The Act’s impact changed demographics within the US and created a more diverse talent pool that has fueled innovation and growth.

Immigration and the Decline of Silicon Valley’s Startups

In recent years, the number of immigrants starting new firms in Silicon Valley has decreased significantly, resulting in a loss of a “key growth engine” for the US economy. Many of these immigrants, who were once drawn to the US for better economic opportunities, have started taking their talents back to their homelands, where they can create their own companies. A significant number of Indian and Chinese innovation workers cite greater economic opportunities as their primary reason for leaving the US. Surveys of top-flight international students show that only a small percentage wishes to stay in the US, while most want to return home. As a result, tech giants such as Amazon, Google, and Microsoft have expanded their operations in India, where high-tech graduates can work for top companies without leaving their homeland. This shift is indicative of a larger problem facing the US economy, which is losing talented immigrant workers who could have contributed to the country’s growth and innovation.

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