Immigrants have founded 51% of all U.S.-based startups currently worth over one billion dollars, a new study shows. The Wall Street Journal reports:
The study from the National Foundation for American Policy, a non-partisan think tank based in Arlington, Va., shows that immigrants started more than half of the current crop of U.S.-based startups valued at $1 billion or more.
These 44 companies, the study says, are collectively valued at $168 billion and create an average of roughly 760 jobs per company in the U.S. The study also estimates that immigrants make up over 70% of key management or product development positions at these companies.
The foundation examined 87 U.S. companies valued at $1 billion or more as of Jan. 1, as tracked by the Journal’s Billion Dollar Startup Club. The authors of the study used public data and information from the companies to create biographies of the founders.
The three highest valued U.S. companies with immigrant founders include car-hailing service Uber Technologies Inc., data-software company Palantir Technologies Inc. and rocket maker Space Exploration Technologies Inc.[..]
According to the study, founders of billion-dollar startups most often hail from India (14), followed by Canada and the U.K., with eight each, then Israel (7) and Germany (4). Two originated from France and the Collison brothers, the co-founders of payments startup Stripe, make up the pair from Ireland.
As the tech revolution increasingly plays a central part in American life, the tech economy is becoming more and more central to the immigration debate. As a result, we expect these numbers will have an impact on the national immigration discussion going forward. Immigration advocates and pro-amnesty types will point to them as evidence of the contributions that immigrants make to American life, Meanwhile, skeptics will argue that most reform models are designed to change our system to favor skills, including tech skills, over family and chain migration. Many restrictionists, in other words, could with some justification say these numbers actually favor their platform.
Both have some points on their side. But the cause in which these numbers are most likely to be employed is also the one cause they don’t support at all: increasing the numbers under the H-1B visa program. The campaigning for such an increase begins within the Journal article itself:
Stuart Anderson, the study’s author and the foundation’s executive director, says the findings show that the U.S. economy could benefit from the talents of foreign-born entrepreneurs even more so if it were easier for them to obtain visas.
Tech leaders including Mark Zuckerberg and Bill Gateshave called for increasing the number of H-1B visas that let skilled foreign workers stay in the country. They argue that immigration greatly benefits the tech community, and that it is difficult for companies to hire foreign-born workers and for immigrant entrepreneurs to start businesses due to the visas’ constraints.
No, no, no. The H-1B visa has nothing to do with tech startups founded by immigrants; in fact, a country that wanted more immigrants starting billion-dollar companies (as we definitely do) would end the H-1B program. That’s because the H-1B visa ties workers to their jobs: if they leave their job, they have to leave the country. In other words, an immigrant who comes to the U.S. on an H-1B visa cannot by definition start his own company. Those who do so must, as the Journal to its credit points out, apply for a change of status—a tricky, uncertain, and time-consuming process.
The simpler way to have immigrants start companies is to treat all immigrants, however many or few we admit, as equal members of society and equal participants in our markets. That’s where the value created by these startups—both monetarily and in terms of their contribution to our quality of life—ultimately comes from: the ability of their founders to compete fully in the U.S. economy. H-1B visa holders can’t do that. The program is, as we have written before, indenturement for the 21st century. It’s bad for the H-1B workers (who get lower wages and worse treatment than those on the open market), bad for Americans (who are put out of work by cheaper H-1B workers), and good only for the crony capitalists using them. And it’s no answer to our immigration problems, nor a way to grow much-needed new companies.