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11/9/2011
02:55 PM
Rob Preston
Rob Preston
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Foreigners Don't Take IT Jobs, They Create Them

Research shows that immigrant-founded companies generate billions in revenue and employ hundreds of thousands of Americans, so why do so many people want to seal our borders?

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My colleague Paul McDougall's recent column on the Occupy Wall Street movement and its potential to make U.S. companies fidgety about their IT offshoring strategies drew a fair bit of reader commentary. McDougall's premise, expanding on comments in the Indian press by HCL Technologies CEO Vineet Nayar, was that the OWS protests could pressure U.S.-based companies to keep IT and other jobs in this country or face a backlash from American citizens increasingly worried about their employment prospects.

The eight commenters came to pretty much the same conclusion: If we keep foreigners out of the U.S., employment will rise and the economy will rebound. One of the more articulate commenters, someone whose "job was outsourced to a foreign company doing business in the US," put things this way:

"We need to put Americans back to work by sending all of these foreign nationals home. Hire Americans first. If a company wants to outsource, require that American citizens and permanent residents are used by the vendor. This would help the economy some. I truly hope that OWS threatens outsourcing to foreign companies and foreign workers."

Another commenter insisted that H-1B and other work visas "be immediately suspended. MILLIONS of our better paying jobs would be instantly RETURNED, to Americans, in America."

While I understand the deep frustrations and fear that accompany 9%-plus national unemployment, I'm not buying this line of reasoning. A body of evidence shows that encouraging highly educated technology and other professionals to come to the U.S., or to stay here after graduating from U.S. universities with engineering or other technical degrees, actually increases employment and economic growth because those go-getters are more likely than the average professional to start and build businesses.

A research team led by Vivek Wadhwa of Duke University, building on studies conducted in the 1990s by AnnaLee Saxenian of the University of California at Berkeley, determined that in a quarter of the U.S. science and tech companies founded between 1995 and 2005, the chief executive or lead technologist was foreign-born. Wadhwa's research estimates that those immigrant-founded companies generated $52 billion in revenue and employed 450,000 people in 2005. In Silicon Valley, the percentage of immigrant-founded startups was even higher: 52% in 2005. Looking over the rich history of the U.S. high-tech industry, consider the economic contributions of companies such as Intel, Oracle, Google, and eBay--all of them with immigrant founders.

Furthermore, Wadhwa's research found that foreign nationals living in this country were listed as inventors or co-inventors in 25.6% of patent applications filed from the U.S. in 2006, up from 7.6% in 1998. Foreign nationals also contributed to most of the patent applications at Qualcomm, Merck, GE, and Cisco at that time, his team found.

More recently, a 2011 report from the Partnership for a New American Economy finds that more than 40% of the current Fortune 500 companies were founded by immigrants or their children. The revenue generated by those companies "is greater than the GDP of every country in the world outside the U.S., except China and Japan," the report states.

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In a speech in Washington in late September, New York Mayor Michael Bloomberg, who made his billions developing systems for financial traders, called on Congress to eliminate the cap on H-1B visas, increase the number of green cards for technical pros, and give foreign students with PhDs in science and tech fields permanent resident status. "Turning these students out of the country is, to put it bluntly, about the dumbest thing we could possibly do," Bloomberg said.

Clearly, foreign nationals aren't just "taking" U.S. jobs; they and their offspring are producing more than their fair share of innovations and economic opportunity, much of it on these shores.

Critics of this line of reasoning will point to the abuses: mainly, the H-1B and other visa holders brought in to do mid-level engineering and other work that could be done by U.S. nationals. But the answer is for government visa issuers to crack down on the abusers, not to end the visa program and shut down immigration of high-skill workers.

What about those U.S. companies moving IT and other jobs offshore by the boatload while accepting U.S. government bailout funds? In this regard, if the Occupy Wall Street climate prompts U.S. businesses and consumers to skew their buying toward companies dedicated to keeping jobs in this country, that's their prerogative. But let individual buyers decide whether to apply that pressure. Don't cede that decision to government bureaucrats.

Rob Preston,
VP and Editor in Chief, InformationWeek
rpreston@techweb.com

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To find out more about Rob Preston, please visit his page.

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JimC
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JimC,
User Rank: Apprentice
3/1/2013 | 10:35:03 AM
re: Foreigners Don't Take IT Jobs, They Create Them
Outsourcing the IT job of an "average professional" in the U.S. to India or China for equal or inferior work is based on price. Companies shouldn't swap out average work here for average work over there because the workers are cheaper to hire/keep. Expelling above-average Indian or Chinese students of IT who are in the U.S. is stupid. If they're smart enough to earn graduate degrees, then they're smart enough to start companies and hire those average U.S. workers.
builder7
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builder7,
User Rank: Apprentice
3/1/2013 | 4:25:19 AM
re: Foreigners Don't Take IT Jobs, They Create Them
It may be so that all of these companies were formed by immigrants, but they were immigrants who stood in line to get into the country, not leapfrogged to the top by taking a H1B visa job. It also makes sense that they should hire the IT workers here that already have an adequate education and experience in the field to be able to help a company. Because companies are not hiring Americans that already have this education is one concern that I have over these types of bills. By letting companies hire all over the world, it allows them to cherry pick from a lot larger group of applicants, which gives the American worker much less standing. I guess that just because a person is an American citizen, that does not guarantee them a job, so an Indian or Chinese should have preferences over them. After all, people come and go into this country all the time without repercussions or papers. This would give them some papers that would enable them to take American workers jobs. If there really was a shortage of talent here then why don't companies with business here hire the unemployed that are perfectly fit to work there. Because they might have to train them, and this would cost them something, and if they hired somebody from India they would work for peanuts. That way corporations that do business in this country can denigrate the people who perform the work. After all, I am sure that they can put a million foreigners to work easily, but are unable to solve the unemployment problems here. When is the 1% going to stop conducting war on the rest of us in this country?!
spintreebob
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spintreebob,
User Rank: Apprentice
2/27/2013 | 9:31:35 PM
re: Foreigners Don't Take IT Jobs, They Create Them
As an IT consultant I've worked beside immigrants all 30 years. I see management making decisions. They put in the budget and try to staff up 3 projects. But they are unable to fully staff all 3 with citizens, even when the hiring manager consciously discriminates in favor of citizens. So they face 3 choices. 1) Kill one of the projects and shift the partial staff of that one to the two survivors. 2) Offshore the project (usually to India). 3) Hire immigrants.

With options 1 and 2 us citizens have fewer jobs. With option 3 us citizens have more jobs. What most nativists don't realize is that immigration and offshoring are enemies of each other.

Any attempt to repeal the law of supply and demand is sure to create unintended consequences.
braya
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braya,
User Rank: Apprentice
1/20/2012 | 5:28:27 AM
re: Foreigners Don't Take IT Jobs, They Create Them
i might be digressing here a bit but what about those illegal immigrants that are IT-inclined that might will soon be granted amnesty, become permanent residents and earn a certificate or a degree, should we start to whine about them too? LOL..

let's just shut up, prove our niche and compete not unless we are scared to do so. we might cry unfair because the country is loosely being invaded by foreign IT talent but what about America being the worldwide bull not only in the IT work field? are we really looking at the bigger picture?
hoapres
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hoapres,
User Rank: Apprentice
12/5/2011 | 8:47:53 PM
re: Foreigners Don't Take IT Jobs, They Create Them
The only end to this crisis is when foreign labor is more expensive than American labor.

Will that happen ??

The most likely for that to happen is if the US dollar crashes relative to other currencies. The US has gotten a free ride to the extent that the US dollar is the world's reserve currency.

How much longer that is going to be is anybody's guess. Right now the dollar seems to be the only game in town with regards to currencies. The gig is up when everybody decides most likely at the same time that acquiring more dollars is risker than dumping the current ones in their possession.

Right now we have a $15 trillion dollar debt along with $40 trillion in future unfunded liabilities with a GDP of about $15 trillion. We are having deficits close to $1.3 trillion being almost 10% of the GDP. Also we are having a trade deficit of over $30 billion a month.

Who knows how much longer this Ponzi scheme can continue ?? Many if not most of the Indian and Chinese H1Bs that are sending dollars back home are having the relatives convert them into gold and silver.

Or in other words, they are taking dollars but not holding onto them. One of the reasons inflation is really taking off is the prices of basic necessities (unlike IPads which you can't eat) is because foreign individuals and countries with a glut of dollars actually want to buy something.

Phil11
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Phil11,
User Rank: Apprentice
12/5/2011 | 3:54:37 AM
re: Foreigners Don't Take IT Jobs, They Create Them
In the Capitalistic Society money is made on stability (it's called prosperity where the benefits of hard work are available to the contributors and investors) or on destabilization (it's called crisis where essentially all of the money is channeled to speculators and middleman). Sending hundreds of thousand of IT jobs to India and China and bringing thousands of inexperienced Asian workers in is the essence of creation of chaos. The headhunters companies make every year nearly 100 billion of U.S. dollars doing just that that. That means that the U.S. IT workers are deprived of 100 billion of the fruits of their work which goes to the middleman. The crisis sees no end...
hoapres
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hoapres,
User Rank: Apprentice
12/4/2011 | 10:00:01 PM
re: Foreigners Don't Take IT Jobs, They Create Them
One of my major gripes with the people writing these blog articles is that they probably never worked in IT in the first place.

I tell young Americans to avoid IT because you have to compete with the whole world even in your own country. With a plethora of visa types be it H1B, B1, L1, etc. companies can keep labor costs down.

Just common sense would tell you that if your job can be done in the third world for one third of the cost being your salary is that sooner or later that you are going to lose your job.

Anyone who works in the trenches at Oracle, EBay, Yahoo, Google, etc. will tell you first hand that the companies are highly H1B infested and very few US nationals are employed in IT.

Even worse is hearing nonsensical arguments about bringing in foreigners create more US jobs. What is not said is that bringing in more foreigners more often than not just brings in more foreigners to work in the US.

Phil11
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Phil11,
User Rank: Apprentice
12/3/2011 | 9:21:32 AM
re: Foreigners Don't Take IT Jobs, They Create Them
My Indian manager stated in public GǣI feel sorry for those Americans, as I do not see any future for them ". Sure he managed to convert his H1-b visa to GC and now enjoys the U.S. salaries. His technical skills and work attitude are just horrible. Yet he admitted that it takes at least twice as long to do any work in India as in the US. So the conclusion is obvious: take advantage of professionals born and educated in America and push them to the commodities salaries band.
Phil11
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Phil11,
User Rank: Apprentice
12/3/2011 | 8:53:36 AM
re: Foreigners Don't Take IT Jobs, They Create Them
I do not care for better Honda and Better Toyota. French buy Pequot, complain about it and are much better-off overall and enjoy better quality of life. I stick to my Chevy for another 10 years!
Phil11
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Phil11,
User Rank: Apprentice
12/3/2011 | 6:04:42 AM
re: Foreigners Don't Take IT Jobs, They Create Them
A CEO for a well known company decided to do GǣkillingGǥ in a quarter. So she / he fires X number of experienced engineers doing a software feasibility study and architecture in exchange for 2X of inexperienced H1-b engineers from India to do the flashy prototype. A few months later the CEO leaves the company with a GǣbenefitsGǥ package satisfying all of his needs for the rest of his life. The project turns out to be a total fiasco and the department is dissolved. Anyone who has spent in a high tech industry a few years can bring a couple of scenarios like this.

The worst is when the H1-b visa beneficiaries after say 10 year of being GǣguestsGǥ of this country get in a position of management. With a few exceptions, the managers from China quickly develop the management style of their homeland which is communistic-style passion for obedience and a curbing innovation.

The managers with the roots in India quickly establish feudal-like families of connections destroying normal healthy competition. When the family extends to entire Indian village the taxpayers furnish the bills for social and medical services.

Steve Jobs was U.S born and educated (to whatever level he needed the formal education) engineer. On many occasions he made it clear that there was very little he owed to his foreign born father.

As an immigrant-engineer from Europe I feel sorry for (not so many anymore) American born engineers who work in GǣtheirGǥ country for the engineering companies where the English language is hardly spoken.

The overpopulation of engineers from India and China clearly destroyed the engineering profession in the United States. The most creative work in the area of software technology is done currently in Europe, where the destructive results of guests immigration are not yet as visible.
Page 1 / 13   >   >>
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