Why America Is Losing the Race for Entrepreneurial Talent

In 2005, immigrant entrepreneurs launched 52% of all startups in Silicon Valley. But today, the number has dropped to 44%, and America is not only losing the opportunity to create new jobs but also losing its competitive edge, argues Vivek Wadhwa in his short, passionately argued book, The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent. Unlike during the 1980s, when skilled immigrants could get green cards (that let them become permanent residents of the U.S.) in as little as 18 months, today it can take as long as 17 years. Failure to fix this problem, says Wadhwa in an interview with Knowledge@Wharton, is killing American innovation and entrepreneurship.

An edited transcript of the interview appears below:

Knowledge@Wharton:Vivek, I wonder if you could tell our audience about your own immigrant experience and the role it played in shaping your research and your book.

Vivek Wadhwa:I was in New York in the 1960s as a child, and being in America is quite an experience. I left [the U.S.] in the late sixties, but I'd always wanted to come back. The first chance I got was in 1980, when my father got transferred to the consulate in New York City. I joined Xerox, and within a year and a half of coming here, I was able to get a green card. In my mind, the day I got my green card, I became an American. I started thinking like an American, behaving like an American, working like an American. There was no other country for me in the world. It was that easy.

A decade after coming here, I ended up founding my first company. The company grew to the point where it employed 1,000 people. We took it public, and it was a wonderful success. Then I started another company, which employed almost 250 people. I was able to do all this because it was so easy to become an American in the 1980s if you had the right skills. You can't do that anymore, and that is a problem.

Now I teach at Duke, Stanford, Berkeley, Harvard and so on, and I hear the same horror stories from my students over and over again -- that they want to stay [in America], but they can't get a visa. Then others start talking about the fact that their friends have gone home, and that they're doing really well back home. And they say, "We'd like to stay here to get a couple of years of experience." They apply for jobs, but companies won't hire them because they need H1B visas, and there aren't H1B visas, or the companies don't want to go through the negativity of being associated with H1B visas. It is lose-lose for the students and the companies. The result is that skilled people are leaving America in droves. If I had come here now, I would have been stuck in immigration limbo, like my students are. I would never have started a company. I would never have contributed to American competitiveness. I would never have been able to do anything with this great country if I was coming here today. That's what the book is all about.

Knowledge@Wharton:So why do you think the experience of skilled immigrants today is so different than yours was?

Wadhwa:Because when I applied for my green card, there was no backlog, there was no delay in visa processing. I simply had to go through the labor certification process, which showed that I wasn't taking away the job of an American, and then immediately I got my green card. The whole process was as easy as could be. Today, the problem is that, first of all, there are no H1B visas for people to come here and work for American companies. And then, once you start the process for a green card, there are no green cards available. The line for green cards is so long that if you're Indian or Chinese, it takes decades.

What happens now is that you decide that you want to become a permanent resident, and your company files for you, and it takes five years, ten years, 15 years, sometimes 17 or 20 years while you're just stuck in limbo, waiting for that green card. The problem is that, once you have started the process of a green card and you've done the labor certification, which means that you've now proven that you're not taking away the job of an American, you're stuck in that same job. You can't change jobs. In those five, 10 or 15 years, you can't go from being a program analyst to being a project manager. You can't go from being a writer to an editor. You can't change jobs; you're stuck in the same grunt job that you had when you started the process, so people waste their lives in the same tedious jobs that they had before.

Knowledge@Wharton:One of the things you point out in your book is that skilled immigrants play a huge role in the U.S. economy. I wonder if you could please outline their contributions to job growth and intellectual capital formation.

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