For all of its faults, the United States has been the destination of choice for emigrants since – well – for half a century. Personally, I have friends and family who got their green cards just within the last few years. The US continues to be a magnet for talented and ambitious risk takers. Bill Kerr, Harvard Professor, titled his most recent book, The Gift of Global Talent: How Immigration Shapes Business, Economics, and Society (affiliate link) and his thesis is simple – even if the data collection was difficult – immigrants drive a large % of growth, innovation, and entrepreneurship. People want to live and work here, and that’s largely been a big blessing. Factoid: 40% of US cancer researchers are immigrants.

US economy = huge demand

Times are good (yes, looking at the stock market this week, you might not think so), and unemployment in the US is at a 50 year low. As of October 2018, there were 7M unfilled jobs in the United States.  This includes 450,000 highly-skilled manufacturing jobs. It’s a fairly basic tenet of economics that suppliers will try to fulfill demand. Here’s a data point, H1B visa season starts April 1. There are 85K visa to allocate, and typically there are 300K applications after one week.

Global talent finds the opportunity

• Most people live in the country they were born in. Only 2-3% of people live somewhere else.
• For college-educated folks, it goes up by 2-3x. For Nobel prize winners, it is 1 in 2, living outside their birth country.
• America’s universities attract budding talent; 50% of PhDs awarded in the US go to immigrants.

Nobel prize winners and inventors

• In 1950 US, 1 in 3 of Nobel prize winner was an immigrant, now it’s 1 out of 2.
• In 2016, 7 Americans received the Nobel prizes, 6 of them were born outside the United States. The 7th was American-born, Bob Dylan.
• Until 2016, 107 of the American Nobel prize winners had emigrated to the US. There were only 4 of the reverse case (American-born winners who emigrated somewhere else).
• In the 1975 US, 1 in 12 inventors was an immigrant, now 1 in 3.5  (inventors = as defined by patent filings)
• In the 1975 US, Chinese and Indians made up 1.5% + 1.5% = 3.0% of total US patent awards.  Now Chinese and Indian foreign-born nationals make up 18% of patents.
• Factors likely include top-shelf research universities, liberal social-political environment, access to capital, and tolerance for entrepreneurship (read: bankruptcy laws).

Shifting geography of talent

• In the 1960-1980, lots of the invention occurred in corporate towns (think: Rochester, Detroit etc).
• Increasingly, it is clustering in San Francisco, Boston, New York (think: Michael Porter’s clusters vs. industrial policy)
• Unsurprisingly, a large number of the H1B applications are submitted by, and awarded to the largest technology companies

Four reasons global talent looking elsewhere (not US)

1. Difficult to get visas (lower hiring caps, more paperwork, and more rejections)
2. Increasingly hostile environment (current H4 visas for their spouse/partner is likely to be repealed in 2019)
3. US multinationals can place their global talent outside the US
4. Non-US companies also offer great careers, growth, and compensation; China has as many unicorns ($1B+ valuation private companies) as the US

The immigration debate is not new

Here is a great infographic showing the magnitude and country of origin for US immigrants. Fascinating to see which countries top the list of emigrants.

The US is making it harder for global talent to work

In an interview with Dick Burke, CEO of Envoy Global, he explains how the US immigration policy for highly-skilled workers needs a reboot here. He notes that in a survey of 400 HR executives, approximately 26% of them have been forced to postpone a project, cancel a project, or move a project overseas because the lack of talent. A lot of this has to do with the US’ parsimony on visas:

• Visa denials are up 41% year-over-year.
• Request for evidence (RFE) are increasing – some of which seem frivolous paperwork.  Asking a $100B revenue company “can you afford to hire them”.  Really?
• H4 will likely go away (visas allowing dependents / spouses / partners to work), creating foreign national anxiety.
• H1B transfers used to take 15 days with premium service.  Now takes 6-7 months.

The USCIS site lists a mind-boggling 95 forms a sponsoring company must review before completing an application. Then there’s cost. In addition to a $1,500 non-refundable filing fee for each application, firms must budget for additional expenses incurred by legal, human resource and IT departments which can tally as much as $20,000 per visa application.

 

In 2014, five percent of H-1B applications were rejected by the USCIS. In 2018, 25% were denied.

 

Moreover, 60% of applications are now returned to sponsoring companies asking for additional information via “request for evidence” mandates. In 2016, 30% of applications were returned seeking more evidence.

– Current H1B Policies Darken IT Outlook, WSJ, April 2019

Canada is making it easier. . . uh oh,

• Canada has streamlined processes and in some cases, can authorize work within 15 days.
• Toronto is the most cosmopolitan in the world. More than 50 percent of the residents of Toronto are foreign nationals
• Salesforce.com has committed $2 billion to build out multiple campuses in Canada.

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