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Thursday, August 24, 2006

Working with Foreigners

Many in the tech industry worry that tough US immigration policy is damaging the country's long-term prospects and benefiting emerging economies such as India and China. That could transform the face of technology entrepreneurship, writes Keith Rodgers.

If you've traveled to the United States recently and been photographed and fingerprinted at the immigration desk, you'll have sympathy for the concerns being raised in Silicon Valley about the future of the home-grown technology sector. Software vendors and venture capitalists alike are voicing fears that a combination of anti-terror measures and misplaced efforts to protect US jobs are keeping some of the sharpest technology minds out of the country - to the benefit of emerging tech economies in India and China.

The problem is partly political, partly bureaucratic, but the issue has become more prominent over the last year as fears over terrorism have started to be weighed against longer-term economic factors. Universities have complained that tough visa requirements and lengthy processing delays have deterred many foreign graduates from applying to US schools, potentially depriving the economy of the talent it needs to drive forward innovation in the long term. At the same time, the number of H1B visas - the type typically used by US companies recruiting skilled foreign professionals - has been restricted following a temporary increase during the dot com boom. Add to that delays in processing work-related green cards, which give foreigners permanent status in the US, and there's a powerful disincentive for people to settle.

At a recent investment conference in San Francisco, Rob Chandra, general partner at Bessemer Venture Partners in Silicon Valley, invited the audience to take a trip to a local office of the US Citizenship and Immigration Services and see for themselves what foreign applicants go through. Like many bureaucracies, the USCIS can be slow moving, and it's often time-consuming for foreigners to jump through the administration hoops required to get their spouse and children into the country. Not only does this deter people from coming in - it also encourages some foreign students studying at US business schools to leave the country rather than put their newly-acquired skills to use within the US economy. As Chandra points out, if you've attended one of the world's best business schools and carried out ground-breaking research that could create American jobs, you probably believe that you deserve a little better. 'Today, the US government has a policy of keeping the brightest people out of the country,' he says. 'Immigration needs to be separated between those who create jobs and those who do not.'

The clamour for a more flexible immigration policy has not gone unnoticed. Only last week, the Senate Judiciary Committee agreed to increase the number of work-related green cards by 90,000 and H1B visas by 30,000. But the debate is much broader than a numbers game, and becomes embroiled in more politically-charged controversies over the treatment of legal and illegal immigrants. Opinion in the US is sharply divided, for example, as to whether undocumented labourers should be offered amnesties and work permits. Within California - where an estimated 2 million to 3 million illegal immigrants prop up the economy in sectors such as leisure and agriculture - the large Hispanic community plays a big role in ongoing debates over whether undocumented aliens from Mexico and elsewhere should be allowed to carry drivers' licences (a road safety measure that would allow them to get vehicle insurance). These debates, which can swing elections, are unlikely to be resolved in the short-term.

In the meantime, Chandra and others believe that the US VC community needs to reach out to the many talented individuals who in the past might have moved to Silicon Valley, but are now helping grow economies elsewhere. 'In our opinion, entrepreneurship is shifting in a dramatic way - we're looking for those entrepreneurs that the [USCIS] is keeping from Silicon Valley,' he says. Instead of looking to emerging economies as a source of cheap labour through off-shoring, he argues that tech companies should seek out the best talent from these markets and see how they can best be harnessed to help Western companies grow. 'The worst way to leverage this is to turn bright people in India and China into hired help,' says Chandra. 'We think about getting the brightest people.'