We've got to get beyond Ellis Island. America needs people, but not just the tired, poor, and huddled immigrants referenced by Lady Liberty. Though we are a nation of immigrants, the American 20th and 21st century success means that we must find a way to attract the creme-da-la-creme to start businesses in America.
The proposed Startup Act 2.0 puts America on the right path to attracting just that. The Act, introduced Tuesday as a bipartisan effort by Senators Jerry Moran, Mark Warner, Marco Rubio, and Chris Coons, is designed to help America regain the edge in attracting top entrepreneurs.
As the bill's authors state, "Research has shown that for close to three decades, companies less than five years old have created almost all of the net new jobs in America—averaging about 3 million jobs each year. "
As other nations develop, it is increasingly necessary for America to retain its edge by creating the best new businesses. However, as an entrepreneur, academic, and friend, I have heard way too many horror stories about highly intelligent individuals, many of whom have been educated in America, being unable to remain in America after graduation.
Let's face it: America has a dearth of engineers. And our science and math education system is pathetic in relation to the rest of the world. And we have skilled labor jobs that need to be filled. The only way for America to thrive in the future is to retain the undergraduate and postgraduate students who have thrived in this country. What if Sergey Brin had to start Google in Russia? Then America would have far fewer jobs, fewer tax revenues, and less dominance over the Internet industry, not to mention less knowledge. (As Forbes wrote, immigrants make great entrepreneurs.) But the reality is that many awesome American-educated entrepreneurs are returning home.
The Startup Act 2.0 is a solid first step to halt this brain drain. One strong feature of the bill is that it "eliminates the per-country numerical limitation for employment-based immigrant visas and adjusts the limitations on family-based visa petitions from 7 percent per country to 15 percent without increasing the total number of available immigrant visas." This will help America retain Chinese and Indian talent. Immigrants from these countries with large populations are currently getting an unfair shake, so many are returning home to start their businesses.
While there may be some backlash from academic purists, I strongly support the bill's provision to assist universities by providing "federal funding for research and development to support innovative initiatives at American universities to accelerate and improve the commercialization of taxpayer-funded research. Grants will be awarded to universities pursuing specific initiatives to improve commercialization capacity and to assist universities that want to pursue initiatives that allow faculty to directly commercialize the research."
Hopefully, these subsidies will enable institutions to incubate businesses while also fostering competition in various markets. While I understand that it may be deemed unfair for some universities to receive funding at the expense of others, so long as jobs are created from the companies that are emerge, America should come out ahead. I view this tactic as particularly helpful when countries like China are directly subsidizing industries to the detriment of American producers, as the American solar sector experienced. (One must note that many Chinese companies are run by "sea turtles," or Chinese citizens who were educated in America and then returned home.)
Even though both chambers of Congress passed the JOBS Act that was then signed into law by President Obama, this Congress has a poor track record for passing meaningful legislation. Let's hope that neither party tries to derail this unique bipartisan effort. And if any lawmaker does, may he/she pay with his/her own job this November.
(And on a personal note, thank you from the bottom of my heart to the authors of this bill who have decided to call it the Startup Act 2.0 rather than the Start-up Act 2.0. That unnecessary hyphen is probably costing the American economy $25 million annually.)