The Race for the Next Google
Posted on January 2, 2010
Advanced countries are competing to attract the world’s best entrepreneurs — the US should too.
by Eric Ries
Entrepreneurship is one of the most significant contributors to a nation’s prosperity [6]. In an increasingly globalized economy, many of the advanced nations in the world are racing to attract the brightest entrepreneurial minds, regardless of their country of origin. The startups created by these highly skilled immigrants will generate most of the jobs and wealth in these countries in the future [3]. This is a race we cannot afford to ignore.
The case of the United Kingdom provides a good example of such a program. Launched last year, the tier 1 “Entrepreneur Visa” category [1] allows entrepreneurs to enter the country to create new startups. The eligibility criterion for this visa is based on the point system used by the UK to evaluate new immigrant applications. In addition to traditional attributes, such as language proficiency and educational qualifications, applicants are awarded points for access to capital (above £200,000) and for adhering to appropriate financial regulations. While the initial program allows entrepreneurs to stay for 2 years, it is subject to a review whereupon the applicant may be eligible to be granted immediate permanent residency.
Several other advanced countries have very similar programs. Canada requires users to demonstrate access to $300,000 CDN of capital, and to create at least one full-time job as a result of their startup [2]. Australia, Germany and New Zealand have similar categories to encourage entrepreneurs to start businesses in their country. While several of these programs are relatively new and therefore there is a lack of data to demonstrate efficacy, the impact of startups on generating new jobs in an economy has been proved repeatedly [3].
The United States has a similar program – the EB5 visa category, which allows immigrants to invest $1 million or more and generate ten jobs as part of that investment [4]. However, that category is limited to investors, and not the entrepreneurs who are going to drive that value creation. The impact of this visa category could be dramatically increased if we focus on the entrepreneur who creates the business, as opposed to focusing solely on the investor holding capital. Small changes can dramatically increase the efficacy of this program and increase our economic competitiveness in the future.
Bibliography
[1] UK Border Agency. Entrepreneur Visas.(accessed 10 16, 2009).
[2] Citizenship and Immigration Services, Canada. Entrepreneurs and Investors. 03 31, 2007. (accessed 10 16, 2009).
[3] Ewing Marion Kauffman Foundation. Business Dynamic Statistics. 2009. (accessed 10 16, 2009).
[4] USCIS. Employment-based Immigrant EB-5. USCIS. (accessed 10 16, 2009).
[5] Wadhwa, Vivek. “America’s Immigrant Brain Drain.” BusinessWeek. March 5, 2009. (accessed October 12, 2009).
[6] Wadhwa, Vivek, AnnaLee Saxenian, Ben Rissing, and Gary Gereffi. ” Skilled Immigration and Economic Growth.” Applied Research in Economic Development 5, no. 1 (May 2008): 6-14.
[7] Wadhwa, Vivek, AnnaLee Saxenian, Richard Freeman, and Salkever Alex. Losing the World’s Best and Brightest. Research Report, Ewing Marrion Kauffman Foundation, Ewing Marrion Kauffman Foundation, 2009.
3 RESPONSES TO THE RACE FOR THE NEXT GOOGLE
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Jean-Marc Mercier | January 8, 2010 at 1:57 pm
Interesting initiative. I am a French mathematician entrepreneur, trying to seed some programs in France ( see https://www.crimere.com/drupal-6.10/content/about ). All of them could be advantageouly hosted in USA. If there is a way to seed them in USA, I would be pleased to know more about.
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Victor | January 26, 2010 at 5:55 am
If this legislation goes through, it will be a huge hit for many countries. The US is the largest market for almost any product or service. Imagine if they open the doors freely for all wannabe entrepreneurs with cash from around the world. This has the potential to unleash a great migration again. All trade ministers around the world should sit up and make every effort to block this. Entrepreneurs are the critical engine of growth for any nation and this is quite simply blatant robbery, which the US has done for several years.
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Jean-Marc Mercier | February 3, 2010 at 9:45 am
@victor I agree, entrepreneurs are the engine of nations. I agree also that nations should emphasize this potential. For an entrepreneur, the most important thing is the project. Would his nation be unable to support it, he will try to export the ideas in a foreign foster country. USA has built its whole history as a immigration land for entrepreneur. To my perception, I would not call this robbery, but freedom.