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Business Report

Silicon Valley Fights for Immigrant Talent

The technology industry’s most important legislative goal? It’s to let the foreigners stay.

Technology-talented immigrants create value for the U.S. economy.

The Silicon Valley startup Morpheus Medical hopes to save lives by commercializing software for diagnosing heart failure from MRI scans. But because of trouble securing a visa, its plans almost ended last December.

“It would’ve been hard to continue the company if I had to go back to France,” says chief innovation officer Fabien Beckers, who had just helped three cofounders he met while at Stanford University land a $2 million investment. The new investors had put a condition on the term sheet: before the funds came through, Beckers had to get a visa.

Beckers caught a break by winning a special three-year “genius” visa. But not everyone would be as lucky, so Beckers last year began talking about his story to the press and appearing in ads as part of an all-out lobbying campaign by the U.S. technology sector for looser immigration rules.

Ben Milne
This story is part of our September/October 2013 Issue
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Venture capital firms and companies including Microsoft, Oracle, and Dropbox hope to sway the outcome of legislation now before Congress that is part of a larger Obama administration reform effort with aims that include legalizing some 11 million immigrants who live in the U.S. without documentation.

The technology industry, including FWD.us, a lobbying group launched in April by Facebook CEO Mark Zuckerberg, want a “startup visa” for entrepreneurs like Beckers who raise money from American investors, a simpler track for foreign science graduates to win residency, and, most controversially, an increase in the number of H-1Bs, the visas available to specialized temporary workers, from 65,000 to 110,000 per year.

Zuckerberg, in a Washington Post editorial, argued that in the “knowledge economy” it doesn’t make sense to turn away talented people, comparing them to oil or other natural resources of the kind that fueled past industrial booms.

Since at least the 1970s, Silicon Valley companies have grown by pulling in foreign talent (many educated at U.S. universities) says AnnaLee Saxenian, dean of the University of California, Berkeley, School of Information. About half of science, technology, and engineering workers in Silicon Valley are foreign-born, compared to a quarter in the rest of the United States, according to the U.S. Bureau of Labor Statistics.

This year, all 65,000 H-1B visas were snapped up in five days. Yet not everyone thinks allowing more H-1Bs is a good idea. Some analysts say temporary tech workers have held down wages (see “Why Tech Companies May Really Want All Those Extra Visas”). Also, a large number of H-1Bs go to Indian outsourcing firms that bring workers to help U.S. businesses shift work overseas.

Even startup visas for entrepreneurs like Beckers would have to be watched carefully, says Saxenian. Otherwise, she says, every rich parent in China could arrange a sham startup for their child and dodge immigration rules.

The imbalance between the value of immigrants and the visas available to them has prompted many efforts at talent arbitrage. In 2007, Microsoft opened a software development center in Vancouver, Canada, to stow workers it couldn’t yet bring to its Redmond headquarters. In San Francisco, there’s talk of a “floating Googleplex” that could house startups on a boat in international waters. This year, Canadian officials placed a billboard on Highway 101, the major artery between San Francisco and Silicon Valley, inviting entrepreneurs with immigration problems to “Pivot to Canada” and move their startups north.

To capture foreign talent, Google and other large companies already operate overseas, in cities including Tel Aviv and Moscow. But that’s not ideal. “U.S. tech companies really prefer to have [their employees] here. We have an innovation culture here. We have the great R&D universities here. You want to be close to that activity so you can commercialize ideas,” says Neil Ruiz, a senior policy analyst at the Brookings Institution, a Washington, D.C., think tank.

To take off, startups need to quickly amass lots of talent and venture financing. Silicon Valley is still the best place on earth to do that. Yet these dynamics could shift. Where global technology centers have successfully developed—as in Bangalore—it’s been because people “marinated” in Silicon Valley and then returned home to start companies, says Saxenian, who focuses her studies on the migration of talent.

At Morpheus Medical, Beckers’s funding eventually came through. But Beckers says he’s “a little embarrassed” by how he won the right to stay in the United States. In December, he got a relatively rare O-1 visa, typically awarded to Nobel Prize winners, film stars, athletes, and others whom the U.S. government deems to have demonstrated “extraordinary ability.”

“I really don’t think it is extraordinary,” says Beckers of the honors, business plan prizes, and past startups he listed on his application. It’s just what entrepreneurs do. Since raising the $2 million, his company has hired four people, plans to hire three more, and is attempting to get its software approved by the U.S. Food and Drug Administration.

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