IN 2005, immigrant entrepreneurs launched 52 percent of all startups in Silicon Valley.

But today, the number has dropped to 44 percent, and America is not only losing the opportunity to create new jobs but also losing its competitive edge, argues Indian-American tech entrepreneur Vivek Wadhwa in his book, "The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent."

In contrast with the 1980s, when skilled immigrants could get green cards in as little as 18 months, today it can take as long as 17 years. Failure to fix this problem, says Wadhwa in an interview with Knowledge@Wharton, is killing American innovation. Here's an edited transcript of the interview:



Q: Would you tell us about your own immigrant experience and the role it played in shaping your research and your book?

A: I was in New York in the 1960s as a child, and being in America is quite an experience. I left the US in the late sixties, but I'd always wanted to come back.

The first chance I got was in 1980, when my father got transferred to the consulate in New York City. I joined Xerox, and within a year and a half of coming here, I was able to get a green card.

A decade after coming here, I ended up founding my first company. The company grew to the point where it employed 1,000 people. We took it public, and it was a wonderful success.

Then I started another company, which employed almost 250 people. I was able to do all this because it was so easy to become an American in the 1980s if you had the right skills. You can't do that anymore, and that is a problem.

Now I teach at Duke, Stanford, Berkeley, Harvard and so on, and I hear the same horror stories from my students over and over again - that they want to stay in America, but they can't get a visa. Then others start talking about the fact that their friends have gone home, and that they're doing well back home.

If I had come here now, I would have been stuck in immigration limbo, like my students are. I would never have started a company. I would never have contributed to American competitiveness. I would never have been able to do anything with this great country if I was coming here today. That's what the book is all about.



Q: Why do you think the experience of skilled immigrants today is different than yours was?

A: Because when I applied for my green card, there was no backlog, there was no delay in visa processing. I simply had to go through the labor certification process, which showed that I wasn't taking away the job of an American, and then immediately I got my green card.

Today, the problem is that, first of all, there are no H1B visas for people to come here and work for American companies. And then, once you start the process for a green card, there are no green cards available. The line for green cards is so long that if you're Indian or Chinese, it takes decades.

What happens now is that you decide that you want to become a permanent resident, and your company files for you, and it takes five years, 10 years, 15 years, sometimes 17 or 20 years while you're just stuck in limbo.

The problem is that, once you have started the process of a green card and you've done the labor certification, which means that you've now proven that you're not taking away the job of an American, you're stuck in that same job. You can't change jobs.



Q: Describe skilled immigrants' contributions to job growth and intellectual capital formation.

A: After I became an academic, one of the first research projects I did was to document the contribution of skilled immigrants.

I learned that AnnaLee Saxenian, who was then the dean of the School of Information at Berkeley, had documented that in the 1980s, a quarter of all the startups in Silicon Valley were founded by Indian and Chinese immigrants.

I contacted her, and I said, "Professor Saxenian, what's the latest on this?" She said that her research was now a decade old and no one had updated it. I said, "Would you like to work with me on this research?" And she said, "Absolutely, I'd love to work with you on it." Then we spent several months revising her work - we used the same methodology, the same data sets, and updated the research.

We were both shocked at what we found - the trend that had started in Silicon Valley had become a nationwide phenomenon.

From 1995 to 2005, a quarter of all the startups in America were founded by immigrants. And the proportion in Silicon Valley had increased to 52 percent.

We also found that during the days of the greatest economic growth in recent US history, the tech boom, 52 percent of the startups in America, the most innovative land in the world, were founded by immigrants.



Q: We see the reverse brain on the UPenn campus. Ten or 15 years ago, Asian students at Penn usually wanted to stay for a few years in the US to get work experience; these days, they are more inclined to head right back to Asia. What's driving the reverse brain drain?

A: The first reason is that they can't get visas. It's that simple.

It's very hard to get a job if you're a foreign graduate of an American university. That's number one.

Number two, their friends who went back home are doing really well back there. They hear stories about going back and getting almost American salaries.

Even if you don't get American salaries, and you get a half or a third of what you make over here, you can have a very good lifestyle on that income in New Delhi or Bangalore or Pune or Shanghai.

And then the overall mindset has changed. When our generation came over here, it used to be that we came with one-way tickets. Our families back home expected they would never see us again.

Now it isn't. Now everyone talks to everyone back home; they realize how good things are over there, that you can have very good lifestyles in India and China and Brazil and so on. So the mindset has completely changed. You no longer have to stay in America to be successful.



Q: You referred to the first reason as being the visa system, the H1B system. Please elaborate and how can it be fixed?

A: The simple problem is that there aren't enough visas. If we address that one situation, we'll fix 80 percent of the problem.

You'll still have the problem of opportunity back home.

But think of it this way - if you graduate from Duke or Wharton, and you join a top American company, you may think this is just temporary, and you tell your friends you'll come back in two or three years.

But then you end up falling in love with America. You're doing well in your career. Why would you leave your job and go back to India when you're doing very well over here? That is how two or three years become four or five years.

In the meantime, if you're a woman, you find a really nice looking guy, and you end up getting married. It happens the same way with the guys. You end up becoming an American and you never go back. So the reality is, if we just fix that one issue about the numbers of visas, the problem would likely fix itself. It's that simple.

Adapted from China Knowledge@Wharton, http://www.knowledgeatwharton.com.cn. To read the original, please visit: http://www.knowledgeatwharton.com.cn/index.cfm?fa=article&articleid=2705