The study suggests that an
"unwelcoming" immigration system is discouraging foreign-born
entrepreneurs, a major source of tech startups in Silicon Valley and other
technology centers.
The Kauffman Foundation study
shows that the proportion of immigrant-founded companies nationwide has slipped
from 25.3 percent to 24.3 percent since 2005.
The drop is more pronounced in
Silicon Valley, where the percentage of immigrant-founded startups declined
from 52.4 percent to 43.9 percent.
The study evaluated the rate of
immigrant entrepreneurship from 2006 to 2012.
"For several years,
anecdotal evidence has suggested that an unwelcoming immigration system and
environment in the US has created a 'reverse brain drain.' This report confirms
it with data," said Dane Stangler, director of research and policy at the
Kauffman Foundation.
"To maintain a dynamic
economy, the US needs to embrace immigrant entrepreneurs."
The study comes amid intense
debate in Washington on immigration reforms, and on visa caps set for highly
skilled immigrants who are often hired in the technology sector.
"The US risks losing a key
growth engine just when the economy needs job creators more than ever,"
said Vivek Wadhwa, who led the study and is director of research at the Duke
University's Center for Entrepreneurship and Research Commercialization.
"The US can reverse these
trends with changes in policies and opportunities, if it acts swiftly. It is
imperative that we create a startup visa for these entrepreneurs and expand the
number of green cards for skilled foreigners to work in these startups. Many
immigrants would gladly remain in the United States to start and grow companies
that will lead to jobs."
The report said 107,819
engineering and technology companies were founded in the last six years. A
random sample of 1,882 companies showed 458 had at least one foreign-born
founder.
Even though the trend has
stagnated, the number of startups involving immigrants from India rose. The
study found 33.2 percent of immigrant entrepreneurs were Indian, an increase of
seven percent in 2005.
The study found those from
India founded more of the engineering and technology firms than immigrants born
in the next nine countries combined.
After India, immigrant founders
represented China (8.1 percent), Britain (6.3 percent), Canada (4.2 percent),
Germany (3.9 percent), Israel (3.5 percent), Russia (2.4 percent), South Korea
(2.2 percent), Australia (2.0 percent) and the Netherlands (2.0 percent).
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