Importing Innovators and Job Creators
Robert Litan, Director of Research, Bloomberg Government
It should be clear then that the US economy will only enjoy robust growth over the long run if it can restore its entrepreneurial mojo, and that one important key to doing that is to allow more immigrants
Two facts about the US economy are not widely known: (1) that between 1980 and the Great Recession, virtually all net new jobs were created by firms less than five years old; and (2) that immigrants have been responsible for founding or co-founding roughly 25% of successful high-tech startups (as well as launching businesses at rates above the national average). Since the recession, however, the number of new businesses has plunged from a pre-recession range of 550-600 thousand per year to about 400,000 annually, while the number of jobs created per startup has been falling for over a decade (more likely due to structural than cyclical forces). It should be clear then that the US economy will only have a sustained recovery or enjoy robust growth over the long run if it can restore its entrepreneurial mojo, and that one important key to doing that is to allow more immigrants, especially those with skills to launch new growth businesses that they are acquiring by attending US universities, to come and stay in this country. In this essay, I will highlight several what I believe to be sensible approaches to immigration reform – approaches that make economic sense and that are politically realistic.