Immigration & Innovation

Hitting the year's H-1B visa limit raises questions of whether the United States is open enough
A handful of foreign-born tech workers employed by Sutter Health, a Northern California hospital network, are worried not only about keeping their jobs but about remaining in the United States. Their H-1B work visas will expire soon. Sutter has about 25 H-1B visa holders, people whom CIO John Hummel describes as specialists with hard-to-find skills related to medical IT systems. "I don't need NT engineers. I need some very specific [medical] informatics skills," Hummel says. "I've scoured the country, and I can't find that expertise."

The United States last week stopped accepting H-1B applications, saying that, five months into the fiscal year, it has enough to fill the 65,000 annual limit on the visas, which let foreign workers hold jobs here. Hummel says he's had some jobs open for two years looking for qualified people, and, if he can't hire someone to do a job, he has to pay consultants three or four times the salary rate. So Sutter has retained immigration lawyers to fight "great battles to keep these valuable people."

There are sure to be a lot of skirmishes this election year about H-1B visas. The program always has been personal and emotional, and now it has become a lightning rod as the IT industry watches jobs go by the thousands to lower-cost foreign workers here and abroad. Designed for workers with specialized skills that are in short supply in the United States, H-1Bs also have been seen as a means of importing cheap labor. But the visas are only part of the debate. In the midst of what some call a jobless recovery, with the tech economy still on uncertain footing, the United States faces the larger question of whether it's protecting its workforce adequately-or cutting off its lifeblood of innovation.

There's a great risk of sending a message abroad that the United States isn't foreigner-friendly, contends a study released last week by Carnegie Mellon University's Software Industry Center. If the country becomes a less-attractive destination for foreign-born technological and scientific experts seeking work, it could weaken the U.S. economy as these experts go to other countries to develop new technologies, write economics professor Richard Florida and doctoral candidate Irene Tinagli. The study, funded by the Alfred P. Sloan Foundation, notes that northern European countries, Canada, Australia, and New Zealand have liberalized immigration and increased efforts to attract foreign talent while the United States has made entering the country more difficult.

Florida, author of The Rise Of The Creative Class (Basic Books, 2002), contends that a key element of the global market is competition for people. India and China will be centers for cost-effective manufacturing and delivering of basic business processes, but the economic leaders will be nations that best mobilize the creative capacities of their people and attract creative talent from around the world, he says. "The U.S. is facing one of the biggest competitive crises in its entire modern history. For the first time in my lifetime, talented and creative [foreign-born] people feel the U.S. is not the kind of place where they want to be," Florida says.

Annalee Saxenian, who became dean of the University of California at Berkeley's School of Information Management and Systems this month, agrees the United States might be sending unwelcome signals to foreign-born experts, but she doesn't see that displacing the country as the place most foreign-born scientists and technologists want to work. U.S. capital markets are much more open than anywhere else, and the United States provides a more-favorable entrepreneurial climate than any other nation, she says. "Unless you believe in a very radical and rapid turnaround, the notion that we're undermining competitiveness is premature," Saxenian says. There's certainly no shortage of examples of the U.S. tech industry tapping foreign-born talent, from Intel co-founder Andrew Grove in the '60s to BEA Systems Inc. co-founder Alfred Chuang in the '90s. Saxenian's research shows that Asian immigrants founded about a quarter of Silicon Valley's high-tech businesses in the 1980s and 1990s that survived through 2000.

Beyond the long-range economic implications, the immediate concern for some American businesses is deciding how they'll fill technology jobs, here or abroad. Intel uses H-1B visas to hire specialized talent in work related to chip design, and fewer than 5% of its 78,000 employees hold H-1B visas, a spokeswoman says. "The cap inhibits our ability to manage our business," she says. Roughly half of the Intel employees with advanced degrees in electrical engineering and computer science are foreign born, she adds.

Technology leaders worry about attracting the best young minds in the United States to the technology sector, not just people from abroad. Microsoft chairman Bill Gates this week hits the college-campus circuit-including the University of Illinois, Carnegie Mellon, MIT, and Harvard-to give what amounts to a series of pep talks to computer-science and -engineering students.

There's reason to worry. In 2003, U.S. universities awarded 2,027 doctorates in electrical engineering and computer science, with 63% earned by foreign nationals, according to the Engineering Workforce Commission, part of the American Association of Engineering Societies. Of the 15,906 master's degrees awarded in those fields, 56% were earned by non-U.S. students.

Yet some U.S. business-technology managers believe the surest way to bring people into the field is to protect the opportunities and salaries available to workers, including measures such as limiting H-1B visas. Adrian Williams, an IT manager at a health-care company, says that U.S. companies have turned to cheap, experienced foreign workers at the expense of developing recent college grads, so the pool of affordable U.S. workers shrinks.

Jim Wilson, who spent a number of years working in a school district before taking a job as a systems engineer for San Mateo County, Calif., blames education, from grade schools not focusing enough on math and science skills to community colleges focusing on the latest programming skills that, once they're outsourced or automated, leave people ill-prepared to compete for IT jobs.

Unemployment in 2003 for all IT workers averaged 5.6%, and 6.4% for computer programmers, according to data from the Bureau of Labor Statistics, compared with 6.0% for all workers.

Wilson doesn't buy the argument that the United States will shut itself off from innovation if it limits the hiring of foreign-born workers. "There are huge untapped resources with people who were cut loose in the U.S.," Wilson says. "There is also a moral obligation for U.S. companies to hire from the U.S. first."

Illustration by Robert Neubacher