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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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FreeMarketeer
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FreeMarketeer,
User Rank: Apprentice
11/10/2011 | 6:46:32 PM
re: Foreigners Don't Take IT Jobs, They Create Them
40% of fortune 500 company have been founded by immigrants or their children is a verifiable FACT. Google it and check fortune 500 founders, you will see quickly that it is true.

"Democrats recently released a report that Republicans are wrong about everything" or the opposite would be equally easy....TO REFUTE since anybody can find something either democrats or republicans have messed up, especially lately.

I am a scientist and since "taking an american job", the inventions I created have led to the creation of multiple positions, including two scientists positions. Let alone I pay healthy taxes, bought a house etc... You can prevent immigration all you want this will not solve the economic problems. Wealthy countries will low immigration rate suffer the same economic problems right now. Plus despite toughest immigration limits to date (for example reduction of H1-b visa from 200,000 down to 60,000 in 2004, same thing with other visas), you still are in deep economic crisis. Plus it is not like there was a spike in immigration before the economic collapse but yet people insist on blaming immigrants as #1 reason for high unemployment

The only thing that will solve it is to promote innovation and new technology leading to job that won't be exportable.
rlawson346
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rlawson346,
User Rank: Apprentice
11/10/2011 | 6:02:05 PM
re: Foreigners Don't Take IT Jobs, They Create Them
"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. "

That's like saying "Republicans recently released a report denouncing Democrats as Socialists" or "Democrats recently released a report that Republicans are wrong about everything".

This is an immigration advocacy group representing business interests. One of their stated goals: Create a streamlined process by which employers can get the seasonal and permanent employees they need, when Americans aren't filling vacant jobs;

Yes, they want to continue temporary corporate sponsored immigration programs where they have total control of the worker. Wouldn't you expect a group with that as a stated goal to release "research" supporting their goals? You don't actually expect them to do unbiased, independent research do you?
phenry017
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phenry017,
User Rank: Apprentice
11/10/2011 | 5:46:24 PM
re: Foreigners Don't Take IT Jobs, They Create Them
When did we stop letting immigrants in? How many of the people you mentioned came here on an h-1b visa? You are deliberately mixing the immigration debate with the h-1b visa debate in order to cherry pick immigrants and have the readers believe they came here on visas. In other words, if we ended the h-1b visa tomorrow, every single person you mentioned would still have come to this country.
rlawson346
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rlawson346,
User Rank: Apprentice
11/10/2011 | 5:43:11 PM
re: Foreigners Don't Take IT Jobs, They Create Them
I'm married to an immigrant. My step-mom is an immigrant. Fully support immigration when done responsibly and with respect towards everyone else already here.

The motivation for immigration is what needs to change. Corporate motives have nothing to do with creating entrepreneurs like Andy Grove. They are almost entirely about lowering the cost of labor.

We need to be building strong families and a citizenry supportive of our American values, not temporary labor pools. The corporate sponsorship requirements amounts to indentured servitude and is a key reason why the majority of workers on corporate sponsored visas earn less than market wages. This puts downward pressure on American wages and working conditions. Unfortunately it also breeds resentment.

In short, immigration should be an agreement between our nation and the immigrant, without corporate middle-men. Let's set criteria that is considerate of the immigrant's talents, support of our nation, and that is also considerate of economic circumstance of the time (more restrictive during poor economic times, less restrictive during periods of economic growth).

We need to focus on permanent immigration in sustainable numbers, not a revolving door of temporary workers who will take their talents home and become tomorrow's competition.

To your points:

"Tibco founder Vivek Ranadive came to the States from India at age 17 to study at MIT."
"Google's Sergey Brin came to the U.S. from Russia when he was 6 as well."
" Andy Grove came to the U.S. from Hungary when he was 20 years old"

None of them were on guest worker visa programs. They came as young children or as college students. I'm certain that Sergey Brin would identify more with the United States than with Russia. Same goes for Andy Grove. These men would not be able to start their own companies on the H-1b visa, and instead would require corporate sponsorship.

So to answer your question "So what's the right age to consider lettingt immigrants into this country? 4, 7, 13, 21, 72?"

I would say we should welcome families and oppose our current guest worker programs that are not family friendly. In my view when it comes to children the younger the better. They will blend right in with our culture. Strong families become strong citizens. Guest workers aren't investing in the United States. They are using our immigration programs as a stepping stone to something better - in their own country.

My step-brother is Korean (now an American citizen). He came when he was 12, and I was his big brother. He since went to college, joined ROTC, and went to medical school. He is now an Army doctor, he's been to Iraq twice, and is helping our wounded soldiers recover from burns, amputations, and things you don't see on the news. He is the face of what immigration should be about and I couldn't be more proud of him. It wasn't about a temporary gig at at Infosys or some other body shop. It was about starting a new life with an extended family and making this country a home.

Motive matters. Cheap labor is not a good motive for immigration. Temporary shortages shouldn't be fixed through temporary immigration programs. Let the market sort it out, not labor subsidies from afar.
melgross
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melgross,
User Rank: Ninja
11/10/2011 | 5:31:35 PM
re: Foreigners Don't Take IT Jobs, They Create Them
You are really drinking Microsoft and other tech companies Kookaid. So there maybe several dozen companies founder by foreigners, but tens of thousands of others let in every year (or more) to TAKE jobs away.

When we see that there are hundreds of thousands of computer professionals in this country that are out of work, and people are coming in on those visas, earning less, then something isn't right. When Microsoft, who makes tens of billions every year in profit, complains that Americans earn too much, and so they need these cheaper people, it's a stunning example of greed.

I suppose you really don't keep up on any of this.
RobPreston
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RobPreston,
User Rank: Author
11/10/2011 | 5:07:13 PM
re: Foreigners Don't Take IT Jobs, They Create Them
So what's the right age to consider lettingt immigrants into this country? 4, 7, 13, 21, 72? The point is that if we seal off our borders from immigrants, particularly highly educated immigrants and their families, we're depressing our ability to start businesses, innovate, and ultimately create jobs, as immigrants and their offspring have been particularly adept at starting and building businesses in this country. There's no single profile. Intel co-founder Andy Grove came to the U.S. from Hungary when he was 20 years oldGă÷he finished his education here. Oracle co-founder Bob Miner was the son of Assyrian immigrants. Ebay was founded by French-born Iranian-American Pierre Omidyar, who moved to this country when he was 6 years old. Google's Sergey Brin came to the U.S. from Russia when he was 6 as well. Tibco founder Vivek Ranadive came to the States from India at age 17 to study at MIT.
rlawson346
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rlawson346,
User Rank: Apprentice
11/10/2011 | 2:11:59 PM
re: Foreigners Don't Take IT Jobs, They Create Them
"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 "

Rob, you should look closer at the experience of Vivek Wadhwa. He has overstated his qualifications, he isn't a true researcher - at least in the academic sense. He doesn't have a Ph.D. There is nothing wrong with being an adjunct professor, but he isn't some big-shot at Duke.

Simply put, each of his "studies" have a predetermined result and would not pass peer review. Agree or not with his politics, the bottom line is that he isn't doing PhD level research.

He claims to be "Director of Research at the Center for Entrepreneurship and Research Commercialization". I'm not saying he isn't, but if you visit the website he isn't listed as a director (in fact, he isn't listed at all on the faculty page). The CERC content is several years old. It isn't what I would expect for an organization that is actively involved in research.

If Wadhwa is a director at Duke, that's a first for someone without a PhD. And they need to update their website. Some articles indicate Wadhwa is "the" director of research at Duke. That is clearly not the case.

Wadhwa has a knack for making mediocre achievements seem grandiose. Look closer at his business past. There are quite a few articles back when he was a CEO that make him appear quite foolish. Journalists at the time talk about how he uses hype, even when at odds with the facts.

This isn't the guy you want to be citing Rob to support your point of view. Not while ignoring research from people who actually know how to conduct it, who have a PhD, and who spend more time in the class room or doing research than on TV playing a professor.

Wadhwa has duped enough people.
phenry017
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phenry017,
User Rank: Apprentice
11/10/2011 | 2:04:36 PM
re: Foreigners Don't Take IT Jobs, They Create Them
The whole scam will fall down soon enough and American IT workers like myself won't easily forget the traitors:
http://economictimes.indiatime...

PS. Notice how one has to go to the Indian press for coverage on this? DO YOUR JOB, INFORMATIONWEEK.
phenry017
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phenry017,
User Rank: Apprentice
11/10/2011 | 2:01:38 PM
re: Foreigners Don't Take IT Jobs, They Create Them
Again with the "immigrant founders" lie. How many of these "immigrant founders" came to the US on an h-1b visa as opposed to coming here when they were 7 years old? STOP THE LIES AND DISTORTIONS. Why are wages declining in these fields if there is a shortage of workers? You are simply one more cheap labor shill selling out fellow Americans for the benefit of advertisers. Since you don't even work in technology (at least the "hands-on" part of it), I'm not sure why anyone should listen to your opinion.
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