Trump’s immigration ban is hurting the tech economy
Silicon Valley exports technology and imports the best talent in the world. This is how it has contributed to the growth of the national economy and enhanced its competitive advantage. President Trump’s executive order banning immigrants from certain Muslim countries sent shockwaves through the tech industry over the weekend as it was a loud and clear message to the world that the gates of the United States are now open. closed, and that xenophobia and bigotry are the new rules of law.
It’s no wonder the executives of nearly every major tech company, including Alphabet, Facebook and Apple, have issued statements in defense of immigrants and steering their companies away from the president. These companies are worried about their survival and the future of the country.
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Let there be no doubt that immigrants are essential to our economic present and future. These newcomers are launching a disproportionate number of American companies, especially in high-tech. Immigrants and foreign passport holders occupy an increasing majority of places in graduate programs in computer science, mathematics, physics and other hard sciences. They play an outsized role in research and innovation in the United States.
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A 2012 research paper I co-authored, “America’s New Immigrant Entrepreneurs: Then and Now,” documented that 24.3% of U.S. engineering and technology startups and 43.9% of those based in Silicon Valley were founded by immigrants. My research also determined that immigrants contributed to more than 60% of patent filings at innovative companies such as Qualcomm, Merck, General Electric and Cisco Systems. And surprisingly, more than 40% of international patent applications filed by the US government had authors of foreign nationality.
Numerous studies have found that immigrants are more likely to create businesses that create jobs, not just in technology, but across the economy as a whole. In 2014, 20% of Inc. 500 companies had immigrant founders. This is despite immigrants who make up less than 15 percent of the US population. According to a study by economist Robert Fairlie for the Small Business Administration, immigrants are more than twice as likely to start businesses as non-immigrants, and 7.1% of businesses founded by immigrants export their products outside of the United States, compared to only 4.4% of non-immigrants. businesses founded by immigrants.
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Clearly, blocking the path of immigrants to the United States cuts off the exact economic growth serum that made America great. Creating an atmosphere in which immigrants are fearful and uncertain about their future will reduce their incentives to open businesses here and stay. This is becoming all the more true as other countries increasingly court educated immigrants and entrepreneurs. Those who support the executive order say the intention is to block people from countries where terrorism originates. But it is not that simple.
By blocking entry based on passport or country of birth rather than objective criteria, the decree paints all immigrants from the countries concerned and possibly dual passport holders with the same scarlet letter. What if the next Mark Zuckerberg was Iranian? Or if an Albert Einstein was born in Libya? Let’s not forget that Steve Jobs’ father was Syrian – and he would have been banned from entering the United States under Trump’s dictate.
Yes, it is true that the countries affected are not the main sources of immigrant entrepreneurs. But setting a precedent like this may mean a politician can use this weapon against other countries that have become essential in providing talent to fuel American innovation. What if a frustrated president chooses to block immigrants with Mexican, Chinese or Indian passports? The scenario, unthinkable a few months ago, is now entirely plausible.
In my 2012 book, “The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent,” I documented the stories of many immigrant entrepreneurs who were forced to leave the country due to visa shortages. skilled immigrant, called green cards. It wasn’t that we didn’t want these people here; American policy has been caught in a political quagmire over skilled immigration. As a result, the country began to suffer from a brain drain, with highly skilled foreign-born doctors, engineers and scientists returning home.
With this executive order, Trump made it clear that immigrants will have to worry about being isolated even after becoming lawful permanent residents; that their religion and place of birth may be the deciding factor in deciding whether they are allowed to re-enter the United States after traveling abroad. This will undoubtedly turn the trickle of skilled workers leaving the country permanently into a flood. Entrepreneurs who had wanted to come here will now have doubts.
Whether or not the courts confirm the legality of the decree, the damage is done. Already, the number of billion-dollar tech startups, commonly referred to as “unicorns,” located outside the United States, has increased dramatically. Fifteen years ago, almost all of them were in the United States, while today 86 of the 191 unicorns are in countries like China and India. We can expect this trend to accelerate as the Trump administration has just fueled the fire of innovation overseas and crippled our own tech industry.
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