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One Way the Government Stinks at Start-Up Formation

Significantly fewer start-ups are launched by immigrants today than in 2005. Author and entrepreneur Vivek Wadhwa explains how it happened.
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Small businesses are great. Just ask any politician. They do everything an official loves to boast about: They create jobs, drive innovation and bolster the middle class. So why is the government pursuing policies that actively slow down the formation of new companies?

That's what professor and entrepreneur Vivek Wadhwa asked recently on Knowledge@Wharton. In his new book The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent, Wadhwa--himself an immigrant success story--notes that in 2005 immigrants started a massive 52% of all start-ups in Silicon Valley.

Today, that's down to 44%.

Why? Blame the government's shambolic immigration policy, which has highly skilled applicants waiting a decade or more in suspended animation to get a green card.

"When I applied for my green card [in the early 1980s]," Wadwha reports, "there was no backlog, there was no delay in visa processing."

Today the situation is much different, he says:

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, waiting for that green card. The problem is that, once you have started the process of a green card and you've done the labor certification… you're stuck in that same job. You can't change jobs. In those five, 10, or 15 years, you can't go from being a program analyst to being a project manager. You can't go from being a writer to an editor. You can't change jobs; you're stuck in the same grunt job that you had when you started the process, so people waste their lives in the same tedious jobs that they had before.

Interested in finding out more about the big role immigrants play in American entrepreneurship, exactly how unhelpful the immigration authorities can be, the reverse brain drain of talent out of America, and possible solutions to the problem? Then check out some of Wadhwa's articles for Inc.com here. You can also read Inc.'s series, The Immigrant Edge, here.

 

Last updated: Nov 23, 2012

JESSICA STILLMAN

Jessica Stillman is a freelance writer based in London with interests in unconventional career paths, generational differences, and the future of work. She has blogged for CBS MoneyWatch, GigaOM, and Brazen Careerist.




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