Thursday, April 17, 2008

"Help not wanted: Congress is doing its best to lose the global talent war"

Source: Lexington, The Economist, April 10, 2008.

Consider the annual April Fool's joke played on applicants for H1B visas, which allow companies to sponsor highly-educated foreigners to work in America for three years or so. The powers-that-be have set the number of visas so low—at 85,000—that the annual allotment is taken up as soon as applications open on April 1st. America then deals with the mismatch between supply and demand in the worst possible way, allocating the visas by lottery. The result is that hundreds of thousands of highly qualified people—entrepreneurs who want to start companies, doctors who want to save lives, scientists who want to explore the frontiers of knowledge—are kept waiting on the spin of a roulette wheel and then, more often than not, denied the chance to work in the United States.

This is a policy of national self-sabotage. America has always thrived by attracting talent from the world. Some 70 or so of the 300 Americans who have won Nobel prizes since 1901 were immigrants. Great American companies such as Sun Microsystems, Intel and Google had immigrants among their founders. Immigrants continue to make an outsized contribution to the American economy. About a quarter of information technology (IT) firms in Silicon Valley were founded by Chinese and Indians. Some 40% of American PhDs in science and engineering go to immigrants. A similar proportion of all the patents filed in America are filed by foreigners.

These bright foreigners bring benefits to the whole of society. The foreigner-friendly IT sector has accounted for more than half of America's overall productivity growth since 1995. Foreigner-friendly universities and hospitals have been responsible for saving countless American cities from collapse. Bill Gates calculates, and respectable economists agree, that every foreigner who is given an H1B visa creates jobs for five regular Americans.......

The United States is already paying a price for its failure to adjust to the new world. Talent-challenged technology companies are already being forced to export jobs abroad. Microsoft opened a software development centre in Canada in part because Canada's more liberal laws make it easier to recruit qualified people from around the world. This problem is only going to get worse if America's immigration restrictions are not lifted. The Labour Department projects that by 2014 there will be more than 2m job openings in science, technology and engineering, while the number of Americans graduating with degrees in those subjects is plummeting.
Comment: It is estimated that three percent of the world's population lives in a country other than the one in which they were born. However, ten percent of the people living in advanced developed nations are immigrants.

It is also the rich nations that have low birth rates and healthy populations who live long lives. They will face the problem that fewer people of working age will be available to run economies with increasing numbers of old people dependent on them. And we old folk have heavy economic demands and big political voices.

That is true unless a nation can and will attract immigrants.

The United States is fortunate in that it can attract immigrants, and indeed highly educated, entrepreneurial immigrants. It also has space in which they can live, and an economic system that can accept immigrants, put them to work, and indeed allow them to create jobs for those born here. The United States not only has historically created institutions that facilitated the integration of immigrants in our society, it has an accepted national myth of "the melting pot" which encourages the acceptance of immigrants. JAD

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