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How Silicon Valley is Transforming the Immigration Debate

Tech entrepreneurs are more actively lobbying for immigration reform--and skilled foreign-born workers--than ever before.
Vishal Sankhla, 33, co-founder and chief technology officer of Viralheat, a social media analytics firm.
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Shortly after launching Viralheat, a social media analytics company in Santa Clara, California, Vishal Sankhla raised $4.5 million in funding from the Mayfield Fund, and created high-paying jobs for 17 engineers and other workers. Sankhla, who is 33 and Viralheat's chief technology officer, has now spent more than a third of his life in the U.S., and for him, it's home--more so than his native India. Still, his future here is not certain.

Sankhla's six-year work visa is about to run out and his green card application has inexplicably stalled, even though he has gathered more than a thousand pages of documentation to verify his accomplishments. And Sankhla says his immigration troubles don't stop with him. He pays $15,000 per employee to manage the H1-B visa process for five of his employees who are also foreign workers, and are chronically in danger of not being readmitted to the country when they do things like go back to their home countries to visit family.

For Sankhla and Viralheat, time is running out. "If you can't find talent fast enough, the market opportunity a start-up is operating in will move on, so there's a limited period of time to execute on the idea and create more jobs," he says.

The New Reality of Silicon Valley: Immigrant Uncertainty

Stories like Sankhla's are the primary reason Silicon Valley has risen up in the past two years to lobby for immigration reform. Short on the skilled technical workers it relies on to develop new ventures, its leaders are after Washington to quickly make changes.

You only need to look as far as a recent Op-Ed by LinkedIn founder Reid Hoffman in The Washington Post about Silicon Valley's need for more high-tech workers in order to stay competitive, or the forming of the group FWD.US, funded with millions from Facebook founder Mark Zuckerberg and other technocrats, to notice the Valley's desire to shape policy.

"It used to be that Silicon Valley had the attitude that Washington was inconvenient," Vivek Wadhwa, an entrepreneur and researcher of public policy at Stanford Law School, says, but over the last few years Silicon Valley has reached a turning point, and that perspective has changed drastically.

When the U.S. last undertook comprehensive immigration reform in 1986, Silicon Valley was more like a distant island kingdom marching to its own drum. And at that point, immigration reform was about controlling the vicissitudes of undocumented and primarily unskilled workers. The technology revolution occasioned by the Internet had not taken off yet, along with it its chronic need for skilled workers.

One of the first groups that understood the need for Silicon Valley to organize itself as a lobby was Technet, founded in 1997 by venture capitalist John Doerr, Nestcape founder Jim Barksdale, and Cisco chief executive John Chambers. Since then, other political groups representing Silicon Valley have proliferated. In addition to Silicon Valley Leadership Group, which has nearly 400 members that are both large companies as well as start-ups, there's FWD.us and groups with a strong technology component such as Partnership for a New Economy.

Wadhwa, who like Sankhla was born in India, said it took him less than 18 months to get his own green card in the 1980s, because he was highly skilled, had advanced degrees, and there was less competition at that time. That compares to a U.S. citizenship process that can now stretch to a decade or more for today's engineers and start-up owners. 

And in the intervening years, the need for immigration reform has only gotten more extreme. Nearly half of all companies in Silicon Valley have at least one key founder who is foreign-born, according to research from the Kauffman Foundation released in October 2012. These companies employ more than half a million workers and generate revenues of $63 billion, according to the report. While those numbers are impressive, the report shows that a reversal is underway.

The proportion of immigrant-founded companies has dropped 8.5 percent to 44 percent since 2005, attributed in part to the difficulties these entrepreneurs have obtaining green cards that would allow them to own companies and continue working and living in the U.S. Their departure means gains for technology hubs in other countries, such as Brazil, China, and India, the report points out.

"People are getting frustrated and an exodus is going on, and we are the cause and we lose out with the creation of technology centers in India and China and Brazil," Wadhwa says.

The Power of Social Networks Outside the Valley

At the same time, Silicon Valley knows it could do more to foster a sense of goodwill with the rest of the country, which does not live in its cloistered bubble of wealth and privilege, and yet has as much at stake when it comes to immigration reform.

"[Silicon Valley] runs the risk of being perceived as arrogant and entitled and super-wealthy and narrowly satisfying its own interests," says Dan Siciliano, a research fellow at the Immigration Policy Center, and executive director at the Program in Law, Economics, and Business at Stanford Law School.

Indeed, some charge the Valley is so aggressively lobbying Washington for foreign-born skilled workers because they'll be cheaper than their American-born counterparts. But Sankhla and other experts say that's a misconception. After you've factored in attorney and processing fees for the H1-B applications, the pay scale for foreign workers is about equivalent to resident workers. Skilled employees, foreign or otherwise, also know they can get top dollar in Silicon Valley so they're not afraid to shop around.

If it's to be successful with immigration, the Valley must cast its net wider to include other groups that have a stake in reforming immigration, Siciliano says.

Meanwhile, some Silicon Valley insiders claim they are awakening to those changes already. Since the November 2012 elections, they see a willingness of Silicon Valley executives to go along with a bigger, more comprehensive reform bill, Emily Lam, senior director of federal issues for Silicon Valley Leadership Group, says.

That's been driven by the political losses of Republicans, who had mostly opposed immigration reform, as well as by directives from President Obama and other politicians, Lam says. Prior to the elections, business leaders thought immigration reform would only happen in a piecemeal fashion, so they limited their efforts to their own needs, which is for highly skilled workers. After the elections, however, business executives in Silicon Valley understood there was a broad-based sentiment for more far-reaching immigration reform. Democrats have also indicated to Silicon Valley that they will only support them if they do more outreach, Lam says.

"We are very close to Senator [Diane] Feinstein (D-NY), who made it clear that she is not leaving others behind [in the immigration debate], and that we need to come around and look at this as a whole and not just look out for our interests," Lam added.

Unlikely Partners in Immigration Reform

So for the time being, Silicon Valley's search for highly-skilled workers has sometimes made strange bedfellows, such as with the American Nursery and Landscaping Association, which represents the largest group of farm workers and workers in the nursery and landscaping industries, who are primarily unskilled.

The U.S. also suffers from an undersupply of farm workers, which is much worse than the shortage of skilled workers afflicting Silicon Valley, says Craig Regelbrugge, vice president of government relations and research for the association. Of the 2,000,000  workers in the U.S., only 600,000 are U.S. citizens, the rest are foreign-born and unauthorized workers. 

The association is lobbying for more agricultural worker visas, known as an H2-A, but part of what it wants to do is offer these workers a mult-year path to citizenship as an incentive for their agreeing to do farmwork. And the association has been joining hands with groups like Silicon Valley Leadership Group to show members of Congress how the economies of states like California are almost entirely dependent on foreign workers, from the people who grow and produce food there to the people who are creating high-tech jobs at startups in Silicon Valley, Regelbrugge says

That makes sense to entrepreneurs like Sankhla, who say they see their fate tied with the larger American Dream narrative of the U.S. and its immigrant culture.

"A lot of people in the U.S. come for all over the world, and many come here to start companies and build businesses and create jobs, and contribute in every way," Sankhla says. "What else can we do for society to accept this?"

Last updated: Jul 9, 2013

JEREMY QUITTNER | Staff Writer | Staff Writer, Inc. and Inc.com

Jeremy Quittner is a staff writer for Inc. magazine and Inc.com. He previously covered technology for American Banker and entrepreneurship for BusinessWeek.




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