The Comeback (9 page)

In sum, privately funded, entrepreneurial, technology-driven companies are the key to our nation’s economic growth, increased standard of living, and full employment. Government never has been and never will be capable of rationally growing our economy and jobs. Its primary role should be to promote policies that enable the private sector to prosper and realize our ever-changing economic potential. I don’t believe in censorship, but I am tempted to forbid the falsehood that government can ever create any jobs other than government jobs.

Moreover, government is also inherently driven by shortterm, temporary, economic band aids. Just recently, former business school dean and Secretary of Labor and State George Schultz was joined by an elite group of scholars to critique the
economically destructive tax-and-spending policies of the federal government. Among their wise policy recommendations, they point out that “long-lasting economic policies based on a long-term strategy work; temporary policies don’t.”
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I heartily endorse their opinions.

In 1979, a Russian family from Moscow immigrated to the United States. That might not seem like much today, with the collapse of the Soviet Union, but put yourself in this family’s shoes. They were leaving behind one superpower for another superpower. But the strength of their native land was an illusion, as is so often the case with totalitarian regimes. The Soviet economy—and in turn its military might—was based on the sinister idea that the individual is nothing more than a tool of the state, another set of working hands that must do what a select few government bureaucrats told the individual to do. His or her dreams and talents didn’t matter because he or she couldn’t act on them anyway. All that mattered was the state and its single-minded attempt to govern every action of its citizens.

The father of this family, Michael, had wanted to be an astronomer, but the Communist Party, unofficially, barred Jews from studying physics because it didn’t trust them with nuclear rocket research. He became a mathematician instead. Then, during a math conference in Warsaw, Michael had a chance to meet colleagues from the United States and Western European nations. That was
the breaking point, as recounted by journalist Mark Malseed in a 2007 article in the magazine
Moment
.
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“He said he wouldn’t stay, now that he had seen what life could be about,” recounted his wife.

Michael finally understood the ruse, as most behind the Iron Curtain did by the late 1970s. The “enemy,” the United States, was their only chance to lead the life they wanted, to be free to do what they wanted. The flow of information from the Free World—the result of advances in innovation—gave the lie to the Communists’ highly complex propaganda machine. This family knew what was waiting for them in America, and it wasn’t what they had been told all their lives.

It was opportunity.

Michael and his family were granted permission to leave the Soviet Union. Going with them was Michael’s six-year-old son, Sergey. Years later, Malseed reports, Sergey returned to his native land with his father, who was leading a two-week exchange program for his math students. Malseed writes:

On the second day of the trip, while the group toured a sanitarium in the countryside near Moscow, Sergey took his father aside, looked him in the eye and said, “Thank you for taking us all out of Russia.”

As his father had eleven years earlier, seventeen-year-old Sergey finally understood the ruse.

It’s a touching story, and not at all unique in the short history of the United States. I’m glad I came across it while researching this chapter on immigration, too. You know how I found it? I Googled, of course. Or you could say I found it by using the very search engine Sergey Brin, along with his colleague Larry Page, invented in 1996, and which stands as one of the most consequential

innovations in our time. Nice work, Communists. You could have had Google first.

Instead, Google is an American innovation because we accepted the Brins into the country so that they could find a better life. But neither is Sergey Brin, for all his success, at all unique. We also accepted Intel founder Andy Grove (Hungary), eBay founder Pierre Omidyar (France), and Yahoo! founder Jerry Yang (Taiwan). The list goes on. There are the well-known: Alexander Graham Bell (Scotland); and the not-so-well-known: Emile Berliner (Germany), inventor of the phonograph.

Which leads to the obvious question: Where would America be without these foreign-born innovators? What would America’s economy even look like?

It’s a scary thought when you consider the “what-ifs.” What if the United States had denied the Brins entry because they were from the Soviet Union—an avowed enemy of the United States? The simple fact is that immigrants are an instrumental part of American innovation and economic growth.

It’s easy enough to say that we are a nation of immigrants. Almost all Americans are immigrants or descended from immigrants. Native Americans are less than 1 percent of the population.

But that doesn’t mean that the United States has always been a welcoming country. Indeed, there are several moments in our history where a nativist surge helped stoke an anti-immigrant backlash. It’s also true that each wave of immigrants—Irish, Germans, Italians, Eastern Europeans, Asians—has confronted bigotry upon reaching our shores. So while we applaud ourselves for being an “immigrant nation,” we often forget just how hard it was for many of our forefathers when they first arrived.

But that’s part of the immigrant spirit, isn’t it? They don’t come here for the
guarantee
of a better life. They come here for the
opportunity
for a better life. And whatever bigotry or nativist reaction
they find, they endure because, in the end, it’s infinitely better than what they left behind. They believed in a better future for their children—and almost all of them suffered so their children could have it better.

My wife’s parents are great examples. They were trained as doctors in Communist Poland. In 1969, they escaped Poland to come to the United States with their then-five-year-old daughter (my future wife) to give her a better life. Penniless, they settled in the slums of Detroit. They had to learn English and retake their medical certification tests. They struggled for years but succeeded as physicians. Their daughter was valedictorian of her high school and now practices medicine as a talented retina surgeon, developing and implementing procedures that restore vision. (She’s also a wonderful wife and mother.)

Clearly, my life is better off because they settled here. But so is our nation. You will find no more patriotic Americans than my wife and her parents. Indeed, my experience has been that almost all immigrants, from the innovators to the professionals to the cab drivers, are extremely patriotic and appreciative of what a gift it is to live here.

But maybe it is we who should be thanking them. Foreign-born innovators represent a substantial portion of the American economy. A 1999 University of California, Berkeley study found that Chinese and Indian engineers ran 24 percent of U.S. technology businesses started between 1980 and 1998. Following this study, the Kauffman Foundation investigated the matter further. In 2009, they released their results:

We found that the trend [the UCB study] documented had become a nationwide phenomenon. According to the studies, in a quarter of the U.S. science and technology companies founded from 1995 to 2005, the chief executive or lead technologist was foreign-born.
In 2005, these companies generated $52 billion in revenue and employed 450,000 workers. In some industries, the numbers were much higher; in Silicon Valley, the percentage of immigrant-founded startups had increased to 52 percent. Indian immigrants founded 26 percent of these startups—more than the next four groups from Britain, China, Taiwan, and Japan combined.

These immigrant founders tended to be highly educated—96 percent held bachelor’s degrees and 74 percent held graduate or postgraduate degrees, with 75 percent of these degrees in science, technology, engineering, and mathematics-related fields. The vast majority of these company founders didn’t come to the United States as entrepreneurs—52 percent came to study, 40 percent came to work, and 5.5 percent came for family reasons. Only 1.6 percent came to start companies in America.

Even though these founders immigrated for other purposes initially, they typically started their companies just 13.25 years after arriving in the United States. And, rather than settling in well-established immigrant gateways, such as New York or Los Angeles, they moved to a diverse group of tech centers across the country and helped fuel their growth.
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Although remarkable, these results are not surprising. During the last half of the twentieth century, almost every top student in the world wanted to study and settle in America. This created an enormous American talent pool of the best and the brightest. In the 1990s, when I would meet with my counterparts who also ran technology associations around the world, they would complain that the United States was taking their smartest students.

We can say that the success rate of highly motivated immigrants is a result of the U.S. economic system, which encourages risk and rewards success. But I think this only tells half the story. The other half is on account of the immigrants themselves, who, like Sergey Brin’s father, risked everything to build a better life.

In other words, the type of people who choose to immigrate to the United States is just as important as the economic system they find when landing here. These are the risk-takers of the world. It takes a certain person to leave everything he or she knows behind to come to a strange new land. But that’s just the type of people who have always come here.

From the founders of our country onward, the pioneering spirit that leads the world is a product of our immigrant background. The early European settlers left behind religious persecution and government tyranny to create their own societies, the frontiersmen of the early Republic carved out a nation from a wilderness, and today industries like Silicon Valley are on the cutting edge of discovering what’s possible. Like the results of the Kauffman Foundation study, none of this is a coincidence.

This land of opportunity attracts not only the best and the brightest—but also the risk takers who want something better for their children. Our nation is the most diverse in the world. Our national gene pool includes those who hungered for something better and instilled that desire genetically and spiritually in their children. As AnnaLee Saxenian, author of the original 1999 Berkeley study, said in a 2007 interview:

The advantage of entrepreneurs is that they’re generally creating new opportunities and new wealth that didn’t even exist before them. Just by leaving your home country, you’re taking a risk, and
that means you’re willing to take risks in business. You put them in an environment that supports entrepreneurship, and this is the logical outcome.
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But an immigrant’s ability to add his or her ingenuity to the U.S. economy—creating wealth and jobs—rests on two very important factors: 1.) Do we let him or her in? and 2.) Do we let him or her stay here? Let’s return to the Kauffman Foundation study:

We found that, as of September 30, 2006, 500,040 individuals in the main employment-based visa categories and an additional 555,044 family members were in line for permanent-resident status in the United States. Another 126,421—who already had job offers—were waiting abroad, a total of 1,181,505 educated and skilled professionals waiting to gain legal permanent-resident status.

Thus, far more skilled workers are waiting for U.S. visas than can be admitted under current law. Only around 120,000 visas are available for skilled immigrants in the key employment categories. These numbers are particularly troubling when you consider that no more than 7 percent of the visas may be allocated to immigrants from any one country. So, immigrants from countries with large populations like India and China have the same number of visas available (8,400) as those from Iceland and Mongolia. We estimate that more than one-third of the million workers in line for permanent resident visas are from India.

This means that immigrants from the most populous countries who file for permanent resident visas today could be waiting indefinitely. In the meantime, they can’t start companies or lay deep roots in American society.

Indeed, the Kauffman study further notes that there’s been an influx in the number of foreign nationals filing U.S. patent applications (337 percent over eight years, to be exact):

In 2006, foreign nationals residing in the United States were named as inventors or co-inventors in an astounding 25.6 percent of patent applications filed from the United States, a substantial increase from 7.6 percent in 1998. Foreign nationals also contributed to a majority of some U.S. companies’ patent applications, including Qualcomm—72 percent, Merck—65 percent, GE—64 percent, and Cisco—60 percent. More than 40 percent of the U.S. government-filed international patent applications had foreign authors.

These foreign nationals were doing business within the United States, working alongside American companies, but they weren’t allowed to become Americans. And when they can’t get in, the fruit of their ingenuity and labor goes elsewhere.

But if they’re doing business in the United States, adding to our companies’ growth, then why does it matter? Because we need these innovative foreign nationals to build their lives in the United States, not simply contribute every once in a while. The immigrants go where the opportunity is, and if they can’t set down roots and build a life, they will move on, taking all that wonderful immigrant spirit with them.

I can’t say it better than the Kauffman study, so let’s return to it one last time:

We are on the verge of a reverse “brain-drain.” If the United States doesn’t fix its policies and keep these highly skilled immigrants, India and China will welcome them home. So will countries like Singapore, Canada, Dubai, and Australia, which are opening their arms to skilled immigrants. They will start their ventures in Bangalore
or Shanghai instead of Silicon Valley and Research Triangle Park. Our loss will be their gain.