There’s a Second Immigration Reform Story That We Also Need to be Paying Attention To

Congress is finally moving on immigration reform. A bill has cleared a Senate committee, but now faces action by the full Senate as well as the House of Representatives. As it should, the bill contains a bipartisan compromise about a “path to citizenship” for the millions of workers who have arrived here illegally over the years.

But there is another important immigration issue policymakers need to keep focusing on, one that may have a more significant long-term impact on the U.S. economy than the more familiar matter of “undocumented workers.”

The other issue is the illogical and counter-productive manner in which America gives, or actually doesn’t give, study and work visas to some of the most talented, the most innovative and the most entrepreneurial people on the planet.

Right now, smart students from all over the world can get study visas to attend American universities; nearly three-quarters of a million took advantage of that opportunity in 2012, comprising slightly fewer than four percent of the combined student population at all American colleges and universities. The U.S. post-secondary education system in the envy of the world, in large part because of the conscious decision we’ve made as Americans to open the doors of our system to worthy students no matter what their country of origin. The result is that America’s great universities and graduate schools are thriving with some of the world’s finest young minds.

We give them the best education, the best training available anywhere. But then what do we do? We force them to go home. Of course, many foreign students are happy to return to their native lands and contribute to their economic development.

But untold thousands, especially in the sciences and technology, would rather stay in the U.S., and take advantage of our many economic opportunities to start a company that would become an American company, hiring American workers and paying American taxes.

Unfortunately, we don’t let them. Once their student visa expires, they need to get on a plane and go back home. These students take their entrepreneurial ideas with them. The jobs and the wealth creation that are the valuable end products of every new company are forever lost to the United States.

The magnitude of the contribution they could make if they stayed is staggering. In 1999, Anna Lee Saxenian of the University of California, Berkeley, found that in the two decades following 1980, engineers from India and China ran 24 percent of the companies founded during the period. Just about every subsequent study has echoed those findings, like the 1997 joint Berkeley-Duke survey that found that a quarter of the tech firms created between 1995 and 2005 had at least one foreign-born founder. (Those companies, by the way, had a payroll of nearly half a million people.) Another study demonstrated that a quarter of all patents filed in 2006 listed a foreign national among the inventors.

A related issue involves people in other countries who are past college age. They are highly-trained members of their country’s technical workforce, but they would also like to start a company. If given a choice, most of them would want to do so in the U.S., to take advantage of the amazing resources available in America’s great centers of business development and innovation, especially Silicon Valley.

But there is no visa category for “aspiring entrepreneurs.” They could apply for an H1B visa for technically-trained workers. But they would first need to find an American company to sponsor them. And then they would need to get very lucky; these visas are given out by lottery, and there are far more applicants than open slots.

One study found that in 2006, there were a half million applications for just 120,000 H1B visas. The average wait time for a successful applicant? Ten years! These sorts of delays have demonstrable, and quite negative, impacts on U.S. entrepreneurship.

So once again, if they start a business in their country, they are forced to do so outside of the United States, with the U.S. again ending up the poorer as a result. In my own industry, involving mobile games, I personally know of a large number of thriving businesses that would love to be located in Menlo Park or Austin or Madison or Boston. But instead, these entrepreneurs—and their thousands of well-paid employees—are in Vancouver or London or Shanghai. The loss is entirely ours.

It makes no sense to me that we slam the door on people who want to come to the U.S. and contribute to our economy. It doesn’t seem like a very effective strategy for competing in an international economy, especially when other countries are rolling out red carpets. Chile gives $40,000 grants to entrepreneurs who will relocate there and start a company. We won’t even put a visa stamp on their passport.

As recent weeks, dozens of prominent American business and civic leaders—Mayors Michael Bloomberg of New York and Ed Lee of San Francisco, Silicon Valley investors John Doerr and Ron Conway, entrepreneurs like AOL’s Steve Case and Craigslist’s Craig Newmark, among many others—conducted a “Virtual March on Washington” (in reality, a social media campaign) to call attention to this issue. Their efforts are showing some results; early versions of the immigration reform bill have increased the number of visas that would be available to talented, deserving non-citizens.

Mayor Bloomberg, Steve Case and all the others who have joined them have been interviewed extensively about why they support the campaign, and of course, I agree with nearly everything they say. There is no real arguing with the economics of the matter.

But I have a separate, and quite personal, motive for supporting the sort of immigration reform I’ve been describing. I myself am the child of immigrants. (As, in fact, are the other co-founders working at my San Francisco company, Kabam.) My father was able to return to the U.S. after studying here, and he and my mom eventually became citizens.

But it almost didn’t happen, and it took far longer than it ever reasonably should have. Dad graduated with honors from the South Dakota School of Mines and Technology. Like me, he was of an entrepreneurial bent, and wanted to remain here to work, and perhaps start a company. But he was forced to return to his native Taiwan, where he languished for many years trying to obtain sponsorship, wishing he could be in America on account of the economic opportunities that this country could have offered him.

Eventually, he made his way over to the US legally. But both he and this country were short-changed by the many extra years the process took. To remain competitive in a global economy, America needs all the talent it can get, and as soon as they are willing to come. It should never have forced my father to leave, and it should never again force out people like him, eager to continue building the American dream.