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Opinion: The Immigration Solution to Job Growth

Aug 3, 2010 – 5:18 AM
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Richard T. Herman and Robert L. Smith

Special to AOL News
(Aug. 3) -- Some people need a new job. Some people need any job. The question being asked across America these days goes something like, "Where will the new jobs come from?"

Will they come from big corporations? From the government? Will they fall from the sky?

Some people seem to think so. How else to explain their reluctance to embrace the most powerful economic stimulus of the era -- immigration.

The fact is, new jobs in the new economy are powered by startups -- businesses started by entrepreneurs. And much of the entrepreneurial fuel in this country comes from immigrants.


This is part of an op-ed series by Richard T. Herman and Robert L. Smith on immigration reform.
Part One: Arizona's law is bad for business.
Part Two: Immigration can spur job growth.
Part Three: Why we need more skilled immigrants, but can't get them.

According to a recent study by the Kauffman Foundation, nearly all net job growth in America from 1980 to 2005 came from companies less than 5 years old. That's an astonishing and powerful statistic.

When people envision major employers, many still think of huge companies and their factories, banks and law firms and retail chains. How many think of a small business with a marketable idea and an owner with zeal?

In the 25-year span studied by the Kauffman Foundation, new companies created 40 million new jobs. And here's the sobering observation: "That means the established firms created no new net jobs during that period," Robert Litan, the foundation's research director, reported to a U.S. congressional committee in June.

A quick and cheap way to kick-start the entrepreneurial engine: Welcome skilled immigrants to town.

In researching our book, "Immigrant Inc.," we were struck by the fact that where immigrants settled, economies bloomed. Where immigrants were absent, little happened.

Immigrants today, like immigrants of old, tend to be strivers and dreamers. Add to that an advanced degree in science or engineering, which many of them possess, and wonders happen.

Compared with native-born citizens, America's immigrants are nearly twice as likely to start a company and twice as likely to be awarded a U.S. patent. They are probably the most prolific entrepreneurs on the planet.

Nowhere is the power of immigrant entrepreneurs more obvious than in technology clusters. High-skilled, entrepreneurial immigrants founded or co-founded more than half of the high-tech companies in Silicon Valley and about a quarter of the biotech companies in New England.

"Silicon Valley is full of immigrants," said Peter Rea, director of the Center for Innovation and Growth at Baldwin-Wallace College in suburban Cleveland. "They are much more likely to start and grow companies."

Sadly, consumed by the national argument over illegal immigrants, many communities are actually discouraging immigration.

One Ohio lawmaker is proposing an Arizona-like immigration law in his struggling state, never mind that Ohio has one of the lowest immigrant populations -- legal and illegal -- in America.

And while a few visionaries like Rea call for attracting immigrants, many civic leaders avoid the controversial "I" word. They instead tout vague and long-term strategies like investing in education. Meantime, those seeking jobs and opportunity can only look skyward and see what falls from heaven.

But immigrants today, unlike immigrants of old, often go where they feel welcome, not just where the jobs are. Some communities are catching on.

For example, civic and political leaders in southeastern Michigan are getting behind Global Detroit, a multifaceted marketing effort to revive the Motor City by attracting a new wave of international talent and investment.

And Cleveland, led by its Jewish community, is planning an international welcome center, which would sell the region to immigrants and offer the kinds of guidance that might entice them to settle.

Immigrant entrepreneur associations, like TIE -- for The Indus Entrepreneurs -- and Monte Jade -- named for the highest peak in Taiwan -- stand ready and willing to work with the locals to advance a high-tech economy.

While forging new relationships is important to attracting talent, cultivating a new mindset may be crucial.

Prejudice and parochialism can stifle efforts to welcome strangers from a strange land. But civic leaders can overcome this natural inclination by appealing to a community's sense of competitiveness.

The best sports teams, when lacking talent, go and find it. And they don't care if a teammate speaks with an accent.

Twenty percent of the players in the National Basketball Association are foreign born, as are 30 percent of the players in Major League Baseball.

A desire to build a skilled, versatile team with the most talented people on the planet could lead to a new economy -- and a new era of winning.

Richard T. Herman and Robert L. Smith are the co-authors of "Immigrant Inc.: Why Immigrant Entrepreneurs are Driving the New Economy" (2009 John Wiley & Sons).
Filed under: Opinion
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