An Indian American entrepreneur researcher has suggested that the US abolish H1-B visas for skilled workers and instead offer more green cards to prevent a reverse brain drain to booming economies like India.
The US is setting the stage for a massive reverse brain drain, says Delhi born Vivek Wadhwa, a technology entrepreneur currently serving as an executive-in-residence at Duke University's Pratt School of Engineering.
The country needs to get its act together and realise that legal and skilled immigrants are a different issue than unskilled immigrants who entered the country through the back door, he said suggesting abolition of H1-B (temporary, non-immigrant) visas.
Wadhwa made the suggestion in the light of a study led by him that found immigrants were key founders in more than a quarter of all the engineering and technology companies set up in the US between 1995 and 2005. The Duke project underscores the point that a significant portion of immigrants in the US are highly educated, fuelling a tech boom, leading innovation and creating jobs, he told Forbes.com.
"Indians are among the best educated of all immigrant groups," he says, adding that Indians founded more engineering and technology companies in the US in the decade up to 2005 than the next four groups combined-those from Britain, China, Taiwan and Japan. They accounted for 26 per cent of all start-ups, about 117,000 jobs and $14 billion in revenue in 2005.
But that trend could be arrested or reversed by a growing phenomenon: Large numbers of skilled Indian immigrants are returning home. Many of them are heading back, Wadhwa says, because of the six-to-10 years it takes for their green cards - or permanent immigrant status - to arrive.
"This is a double loss for the US. One is that we lose good people. The second loss is that they will become our competitors," he notes, adding that this is true for many Chinese, Russian and European immigrants too.
As a way to curb the outflow of immigrant talent, he suggests that the H1-B visa be abolished altogether. "Instead, [we should] expand the number of green cards we issue to skilled immigrants" and allow these skilled immigrants to come in on permanent visas.
H1-B visas are problematic because they distort salaries, "and they do reduce American salaries; the critics are right about that," Wadhwa was quoted as saying by Forbes.
"If you come on an H1-B visa, your wife cannot work and she cannot get a driver's license. For six or 10 years, you cannot buy a house, because you don't know if you are going to be here or not."
Wadhwa argues that H1-B visas enable employers to exploit the vulnerability of skilled temporary workers. "No matter what we say, if you have an employee who can't leave you, you are not going to pay him more money than you have to," he says. "You are not going to treat him as nicely as someone who can leave."
In what may run counter to conventional wisdom, the researchers found that more than half (53 per cent) of the immigrant founders of technology and engineering companies secured their basic undergraduate degrees in their home countries. They went on to acquire their highest degrees from US universities.
About 91 per cent of Indian immigrant founders completed their undergraduate degrees in India, while that number was 35 per cent for Chinese immigrants and 97 per cent for the Taiwanese. "This shows that undergraduate education in India is pretty good," says Wadhwa, adding that the data doesn't show that to be the case with China.
Companies founded by immigrants tended to cluster in the country's major technology centres, which also predictably overlapped with concentrations of immigrant population, the study found. In the 11 tech centres covered by the study, 31 per cent of the start-ups had an immigrant key founder, compared with the national average of 25 per cent.
While the Duke project appears to have generated renewed interest in understanding the contributions of immigrants in the US, Wadhwa doesn't see it getting much traction in policy circles, where "the focus right now is on illegal immigrants. It's very difficult to get them to focus on legal immigrants."
Unlike earlier years, Wadhwa doesn't expect the Indian government, for one, to lobby for easier green cards for its people in the US. "Right now, India wants its people to come back home," he says.
"India has gone from a country which was dependent on revenues from foreign workers to one that is booming on its own. It needs all the skilled people it can get."
Wadhwa is currently leading another research project that looks specifically at the share of immigrant patents, and a study that looks at the contributions of Indians and Chinese to that total. Both studies will conclude by August.