The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent [Paperback]

Vivek Wadhwa (Author), Alex Salkever (Contributor)

Book Description

Publication Date: October 2, 2012

A 2012 ECONOMIST BOOK OF THE YEAR

Many of the United States’ most innovative entrepreneurs have been immigrants, from Andrew Carnegie, Alexander Graham Bell, and Charles Pfizer to Sergey Brin, Vinod Khosla, and Elon Musk. Nearly half of Fortune 500 companies and one-quarter of all new small businesses were founded by immigrants, generating trillions of dollars annually, employing millions of workers, and helping establish the United States as the most entrepreneurial, technologically advanced society on earth.

Now, Vivek Wadhwa, an immigrant tech entrepreneur turned academic with appointments at Duke, Stanford, Emory, and Singularity Universities, draws on his new Kauffman Foundation research to show that the United States is in the midst of an unprecedented halt in high-growth, immigrant-founded start-ups. He argues that increased competition from countries like China and India and US immigration policies are leaving some of the most educated and talented entrepreneurial immigrants with no choice but to take their innovation elsewhere. The consequences to our economy are dire; our multi-trillion dollar loss will be the gain of our global competitors.

With his signature fearlessness and clarity, Wadhwa offers a concise framework for understanding the Immigrant Exodus and offers a recipe for reversal and rapid recovery.

Editorial Reviews

Review

“Vivek Wadhwa’s new book, The Immigrant Exodus, is admirably short, yet he packs it with righteous fury. America, he points out, has one of the greatest assets a nation can have: people yearn to live there.”
—The Economist

“A thoughtful contribution to the dialogue surrounding immigration.”
—Kirkus Reviews

“Immigrants have long been the backbone of America—our nation itself was a start-up founded by immigrants. The Immigrant Exodus demonstrates the danger this country faces if it continues to turn away such a precious resource.”
—World Policy Review

“A must-read for anyone who wants to understand why America is losing the talent race.”
—Elon Musk, CEO of SpaceX and co-founder of Tesla Motors and PayPal

“As the son of immigrants and a champion of American Innovation, I can think of no more important book for our politicians and CEOs to read. Get it, read it and fix this problem now.”
—Peter H. Diamandis, MD, Chairman/CEO, X PRIZE Foundation and author of Abundance: The Future Is Better Than You Think

“Talk about hitting our economy when it’s down! And we’re doing it to ourselves, as Vivek Wadhwa’s shocking new book illustrates….Vivek’s timely book should wake Washington up to this destructive folly.”
—Steve Forbes, Chairman and Editor-in-Chief of Forbes Media

“Over the past couple of years, Wadhwa has been at the forefront sounding the alarm about America's flawed immigration system. In The Immigrant Exodus, he writes persuasively about the problem and what we need to do to solve it. A must-read.”
—Reid Hoffman, co-founder and executive chairman, LinkedIn and partner at Greylock

“With his masterful blend of hard-hitting analyses and empathy for the real people who strive to succeed, Wadhwa lays out a strategy for keeping America the birthplace of great innovation. The Immigrant Exodus is a must-read.”
—Freada Kapor Klein, Ph.D. founder, Level Playing Field Institute

“Vivek hits the nail on the head: The key to unlocking American prosperity is making it easier for immigrant entrepreneurs to start businesses here and ultimately stay here. Voices like Vivek’s are critical to making that reform possible."
—Marc Andreessen, co-founder and partner, Andreessen Horowitz

“I highly recommend The Immigrant Exodus for everyone who is concerned about America's competitiveness in the twenty-first century.”
—Vinod Dham, Executive Managing Director, IndoUS Venture Partners

“The Immigrant Exodus points out clearly that America is in a stiff competition for valued immigrants, the entrepreneurs and the capital of the world, and we can do something about it.”
—Timothy Draper, Managing Director, Draper Fisher Jurvetson

“The Immigrant Exodus is a cautionary tale of a great success going wrong and what we can do to reverse this trend before it is too late.”
—Mitch Kapor, founder Lotus Development Corp.

“In The Immigrant Exodus, Wadhwa argues that America remains the beacon of hope for talented individuals from around the world. Let's not allow this flame to be extinguished.”
—Jeff Skoll, founder and chairman, Participant Media

“A wakeup call. Vivek Wadhwa proposes enlightened and constructive ways to keep the American Dream alive for the best and brightest global talent.”
—Klaus Kleinfeld, Chairman and CEO, Alcoa

“As a nation, we’re fortunate to have Vivek Wadhwa and others advocating on behalf of America’s future prosperity.”
—Muhtar Kent, Chairman and CEO, The Coca-Cola Company

About the Author

Vivek Wadhwa is director of research at the Center for Entrepreneurship and Research Commercialization and executive in residence at the Pratt School of Engineering, Duke University; vice president of innovation and strategy at Singularity University; fellow at the Arthur & Toni Rembe Rock Center for Corporate Governance, Stanford University; and distinguished visiting scholar, Halle Institute of Global Learning, Emory University. Wadhwa is a regular columnist for the Washington Post, Bloomberg BusinessWeek, and Forbes.com. In February 2012, the US government awarded Wadhwa distinguished recognition as an “Outstanding American by Choice”—for his “commitment to this country and to the common civic values that unite us as Americans.”

Alex Salkever is a writer and former editor of BusinessWeek.com where he managed technology coverage for the publication. His work has appeared in numerous national and international publications in print and online publications, including the Christian Science Monitor, Wired Magazine, Salon.com, BusinessWeek, and Inc. Magazine.

Product Details

• Paperback: 106 pages
• Publisher: Wharton Digital Press (October 2, 2012)
• Language: English
• ISBN-10: 1613630212
• ISBN-13: 978-1613630211
• Product Dimensions: 8.3 x 5.5 x 0.4 inches
• Shipping Weight: 5.6 ounces (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (31 customer reviews)
• Amazon Best Sellers Rank: #358,075 in Books (See Top 100 in Books)

Most Helpful Customer Reviews

10 of 10 people found the following review helpful

5.0 out of 5 stars The most important current nonfiction book December 28, 2012

By Gaetan Lion TOP 1000 REVIEWER

Format:Paperback|Amazon Verified Purchase

This is because the US ability to attract and retain highly skilled and entrepreneurial individuals worldwide is at the essence of its success. As long as the US can maintain an economic and cultural climate favorable to entrepreneurship, the US can still remain the leader in the innovation of markets for new products and services.

The author documents that the US magnet for talent has broken down due to impairing immigration policies. This is at the same time as other countries have far strengthened their own talent magnet. Historically, the US has attracted the best and the brightest and made it relatively easy to stay. But, this situation has rapidly deteriorated.

The author firsthand experience is interesting. He came from Australia with a degree in computer sciences in 1980. Within days of his arrival, he had applied and gotten a job with Xerox. Within a short 18 months he had gotten a green card. This will provide him total freedom to fulfill his full potential. And, he will soon found two successful high tech companies: Seer Technologies and Relativity Technologies creating hundreds of jobs as a result.

The author indicates that he could not have replicated his own success today. This is because he would have to wait for a decade to get a green card. Stuck in near corporate servitude with a temporary H-1B visa, he would be not only tied to his sponsoring employer but also tied to the specific job associated with his green card application. He would never have started his two companies and hundreds of jobs would not have been created. If he would have to start today, given current circumstances he would have stayed in Australia. This is obviously wrong.

Michael Bloomberg, mayor of New York City, has called our immigration policy suicidal. This is the case because if the US can't attract worldwide talent, it has lost its main competitive edge. The US, having the highest living standard, precludes it from ever being the low cost manufacturer of the World. (Germany's manufacturing prowess overcomes the high living standard handicap by earmarking the majority of its youth for trade manufacturing schools instead of college. That's a solution the US will never accept). The US has to position its economy as the one that constantly renews itself by developing new high margin markets. It can't do that if it is impairing its ability to attract high skilled talent. Yet, that is exactly what it is doing right now.

Let's look at a few numbers to better understand the situation. US citizens account for only 4% of engineering degrees worldwide; Asia (mainly India and China) account for 56% of them. Two thirds of H-1B applicants are issued for related positions in engineering and high technology. And, India and China account for two thirds of those. Thus, over 44% of H-1B applications go to Indian and Chinese engineers. This makes perfect sense since those two nations provide the majority of engineer graduates. However, the US offers only 140,000 green cards per year and limits any nation to only a 7% allocation of such green cards. This means that both China and India with each a population of over 1.2 billion providing the majority of the engineering talent worldwide get only 10,000 green card each, the same allotment as Iceland (pop 320,000) or even Liechtenstein (pop. 35,000). This situation is absurd. As a result, both Indian and Chinese engineers with H-1B visas have to wait around a decade to get a green card if ever. Many will give up and return to their home countries with thriving local opportunities. The author with other researchers estimate there are currently over 1.2 million highly skilled workers waiting in limbo for their green card. This stifles their entrepreneurship and productivity.

The author has documented that the slide in immigrant fostered entrepreneurship has already started. Just a few years ago, immigrants co-founded 52.4% of Silicon Valley companies. Within his most recent 2012 survey, this percentage had abruptly dropped to 43.9%. Similarly, the US share of total patent filings has declined from 42.8% in 1995 to 27.4% in 2010. That's even though foreigners account for a growing % of US patent filed (51% in 2011 vs only 18% in 1964).

If the US is concerned about the emerging economic competition from China and India what could it do? Probably one of the best strategies would be to attract and retain its best and brightest [from China and India] to cause a positive brain drain in favor of the US. Meanwhile, what the US does is actually attract bright Chinese and Indian minds as students and then kick them back home a short while after graduating and acquiring some training in the US. That's like US foreign aid in human capital. This could only accelerate China and India's economic rise relative to the US. In 2011, 160,000 students left China for the US. But, the number of graduates returning to China amounted to 180,000 in 2011 up from only 50,000 in 2008 (pg 42-43). The reverse brain drain has started.

Economic competition is all about international human capital. And, based on immigration policy related to the skilled the US has already lost this race to many other countries such as Australia, Canada, China, Germany, and Singapore (Chapter 5). Australia with only a tenth of the US population issues nearly as many green card equivalents! All those countries have immigration policies related to the skills that are far more hospitable and inviting than the US. Their policies have much in common. First, they recognize and value human capital (their immigration policies are highly selective on that count). Second, they provide permanent residency permits a lot easier and faster than the US does for the targeted skilled workers. In many of those countries, immigrants can apply for permanent residency before moving to the country and often receive such permit while still being in school before entering the labor force. This contrast with the 10 year purgatory Indian and Chinese engineers suffer in the US.

The author does not mention India among those countries fostering immigration. This is for a simple reason: it has an abundance of homegrown talent. And, India has far improved the local opportunities for such talent. Bangalore rivals Silicon Valley. Major US high tech companies such as Google, Amazon, and Microsoft have all huge operations in India. As a result, Indians increasingly stay home. From 1964 to 2001, 30% of Indian graduates from the Institutes of Technology went to the US. Between 2002 and 2008 that number declined to only 9%. This rapid decline is due to both faster relative economic growth in India and really restricting US immigration policies for Indians.

The author's recommendations to fix our immigration policy make a lot of sense. They include boosting the number of green cards available to skilled immigrants. The 7% cap per nation should be eliminated. The spouses of H-1B holders should be allowed to work and have driving licenses. H-1B visas should not be restricted to a specific employer, and related green card applications should not be restricted to a specific job. Those recommendations seem so obvious and humane, it is sad that they are even necessary. Meanwhile, the immigration debate in Washington is solely dominated by the issue of the porous border with Mexico. The US only ignores the issue of skilled immigration raised by the author at its own economic risk.

12 of 14 people found the following review helpful

5.0 out of 5 stars Move this to the top of the list October 20, 2012

By M. Caulfield

Format:Paperback|Amazon Verified Purchase

I just finished reading "The Immigrant Exodus" and I am overwhelmed with gratitude to Mr. Wadhwa for his patriotic and sane dedication to raising this issue. It is a dangerous kind of arrogance to think that this country is such a desirable destination that we can treat worthy, contributing immigrants like interlopers. This book is a wake up call that I plan to share and amplify.

I spend a lot of time in Detroit, a place where the greatness and struggle of the American worker is clearly visible. As I read this book I couldn't help but think of how outraged the legions of unemployed and underemployed workers there would be if this issue were put plainly to them. The idea that we are literally turning away risk taking job creators and discouraging them from investing in America at a time when cities like Detroit are desperately trying to attract the industries of the future is almost unbelievable. Immigrants are always an easy political scapegoat and focus of paranoia. At a time when our leaders know that job creation is priority one for the electorate the volume on this issue needs to be turned up to 10. Instead of having countries like India and China subsidize and entice these talented innovators away lets flip this drain and funnel that talent to cities like Detroit eager and ready to grow with them.

This is a clear, concise explanation of the issue. I highly recommend it. I put it down two hours ago and it has already sparked two lively conversations.

13 of 18 people found the following review helpful

5.0 out of 5 stars Undoubtedly a New York Times Best Seller October 5, 2012

By Susan K

Format:Kindle Edition

This is a must read for anyone concerned about the US Global Leadership and our sluggish Economy. The Immigrant EXODUS has the most up to date quantitative research without political positioning. Vivek Wadhwa takes a complex topic and uses compelling real life cases that showcases why America is losing our entrepreneurial leadership but he also presents solutions. Vivek is an innovative thought leader across academia to Silicon Valley to DC. Given this election year, this book is a perfect read for anyone interested in the real issues and solutions. We need more of his direct, provocative communication to get America back on the upswing!