Sitting across a conference table, she stared at me with wide eyes and said, "No, it didn't cross my mind." I'm an immigration lawyer, and I had just asked Emma, a new university graduate with a master of fine arts degree, whether she had thought about starting a business in America. The 25-year-old from Taiwan was facing the likelihood that she would soon have to leave the United States because her student visa was set to expire. But she saw her future in America, not Taiwan.
Work visas for professionals like Emma are in short supply. About 85,000 of them, called H-1Bs, are allocated each year. Last year the U.S. Citizenship & Immigration Services received about 175,000 H-1B applications, many of them filed on behalf of international students like Emma. With the demand so far outstripping the supply, so the federal government runs what amounts to a lottery. What a terrible way to attract and retain global talent.
Sitting next to her boyfriend, a green-card holder with an American MBA degree, Emma shared her story of how the U.S. had become her home over the past few years. She wanted to stay. But how? The H-1B visa avenue seemed unlikely. I asked her if she had heard of the E-2 treaty investor visa, which is available to foreign nationals who acquire or launch a new business, often with an investment of as little as $100,000. Her native Taiwan one of 80 countries whose nationals are eligible for the program.
Emma hadn't heard of the E-2 program, and I wasn't surprised. Colleges, city halls, and local economic-development organizations in cities across the country are strangely disconnected from this opportunity to launch new local startups and attract foreign investment. With a few exceptions, most cities and states don't view their international-student community as an asset and therefore do little to help them stay after graduation.
Perhaps local communities would react differently if they knew the treasure and talent that these students possess. For starters, this is not the poor international-student population from decades past, living on ramen noodles and making do without a winter coat. This is an increasingly affluent crowd, often coming from families that have accumulated great wealth in their home countries.
There are nearly 900,000 international students studying in the U.S., and they pump $27 billion into the U.S. economy each years, supporting 350,000 American jobs. It is not uncommon for an overseas family to budget $100,000 or more per year for their child's college tuition and living expenses in America.
But the real economic payoff to our cities and states happens when these students graduate and somehow find a way to stay.
First, international students often possess the kind of science-technology-engineering-math skillsets that are in high demand in an innovation-based economy. For every 100 international STEM students who remain in the U.S. after graduation, 262 American jobs are created.
Second, immigrants play an outsized role in America's innovation and startup ecosystem. In Silicon Valley, much of the tech talent is foreign-born and 50 percent of the tech companies, from Google to eBay, have an immigrant founder. Forty percent of the Fortune 500 companies were started by an immigrant or a child or an immigrant. And despite the foreign-born comprising only 13 percent of the U.S. population, 28 percent of all "main street" businesses in America have an immigrant owner. Studies show that immigrants are twice as likely to start a business or file a patent, compared to the American-born.
Emma was lucky. Once she learned about the E-2 program, she quickly developed a business idea, a restaurant with an innovative concept. Her boyfriend helped with the business plan. She incorporated, rented a space and borrowed money from her parents to invest in her company. Citizenship & Immigration granted her E-2 investor status, good for two years and renewable in two-year increments in perpetuity.
It seems to me that our universities, our local elected officials and our economic-development leaders should be encouraging more startups and investment by helping their international students learn about the E-2 visa and provide entrepreneurial support to help them launch their businesses.
But it will take a big push at the local level. Because of new opportunities emerging abroad, our immigration restrictions and the unwelcoming nature of some of our communities, too many international students are not even considering the U.S. as their ultimate destination. One Harvard study found that more than half of our international students surveyed wanted to start their own businesses in the coming years --- but that it would likely be outside the United States.
A good example is Kunal Bahl, the co-founder of SnapDeal, India's largest online marketplace. Bahl, a 2007 graduate of the University of Pennsylvania's Wharton business school, returned to India when he couldn't obtain an H1B visa and launched SnapDeal in 2010. The company has attracted nearly $1 billion in investment and has more than 25 million customers and 50,000 merchants.
With the prospects of immigration reform at the national level so dim, it's now up to our cities and states to help create American jobs by helping international students stay in the U.S. And there certainly could be a role for businesses that would benefit. Perhaps a company like Microsoft, a longtime critic of congressional inaction on immigration reform, could help interested communities develop their own E-2 startup programs, with the goal of launching 5,000 startups nationwide.
Our cities certainly need more revenue and jobs. We know that nearly all net job creation in America comes from companies less than five years old. So, we need an army of entrepreneurs, resilient enough to create and fail, create and fail. Every city looking to in-source capital, launch more startups and build a deep pool of innovators, should look at their international students and adopt a new mantra: "Talent is the new oil. Drill, baby, drill."