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Immigrants hold key to new America

The US lawmakers may be seeking to restrict entry of skilled foreign workers to save jobs of their citizens, but new research shows that firms founded by immigrants from places like India are creating thousands of jobs every year.

world Updated: Feb 16, 2009 14:47 IST

The US lawmakers may be seeking to restrict entry of skilled foreign workers to save jobs of their citizens, but new research shows that firms founded by immigrants from places like India are creating thousands of jobs every year in the country.

The research, conducted by professors of Duke University and the University of California, also shows that an immigrant figures among the founders of every fourth engineering and technology firm in the country.

“There was at least one immigrant key founder in 25.3 per cent of all engineering and technology companies established in the US between 1995 and 2005 inclusive,” says the report titled ‘America’s New Immigrant Entrepreneurs’.

These entities generated over $52 billion in 2005 sales, while creating just under 4,50,000 jobs as of 2005.

“Almost 26 per cent of all immigrant-founded companies in last 10 years were founded by Indian immigrants,” it noted.

Even as the findings of the research pitch for entry of more skilled foreigners, the US Congress has approved a proposal to restrict firms, receiving the government’s bailout package, from hiring H1-B visaholders, if they are to replace Americans.

The latest measure, which is part of the American Recovery and Reinvestment Act, also known as stimulus bill, could adversely impact Indians as they make up a major chunk of the H1-B visaholders.

For the fiscal year 2009, more than 1,60,000 applications have been received under H1-B visa programme, where one lakh applicants are estimated to be Indians.

Currently, the US has capped the annual H1-B visa quota at 65,000, which was reduced from 1,95,000 two years ago. Estimates suggest that about 40,000-45,000 Indians are getting these skilled worker visas currently, down from more than one lakh a year previously.

The research, conducted by Vivek Wadhwa, Ben Rissing and Gary Gereffi from the Duke University and AnnaLee Saxenian from the University of California, Berkeley, shows that Indians lead the tally of all the technology and engineering firms started by immigrants in the US between 1995 and 2005.

Indian immigrants are followed by those from the UK, China and Taiwan. According to the report, majority of the Indian immigrants (46 per cent) founded software firms and 44 per cent started companies in innovation/ manufacturing-related services.

“...Immigrants have become a significant driving force in the creation of new businesses and intellectual property in the US and that their contributions have increased over the past decade,” the report said.