Fortune: A ‘startup visa’ will help Biden jump-start the economy
Co-authored with Alex Salkever
The closest thing that a country can have to a free lunch is an influx of skilled immigrants. Education and skills are only the most obvious benefits they provide. They also bring a vitality and work ethos that inspires innovation and builds competitiveness. If new immigrants were an ice cream sundae, the cherry on top would be the entrepreneurs who come to start companies: They immediately start creating jobs.
That is why we have long been advocating a startup visa for foreign-born entrepreneurs who want to build their business in the United States. And we nearly had one. After years of debate, the Obama administration issued the International Entrepreneur Rule (IER), and the Department of Homeland Security finalized it in early 2017. Then it suffered obliteration by the nativism of the Trump administration and its indiscriminate assault on all forms of immigration, in which it threw the baby out with the bathwater and the family rescue pet.
But as Caleb Watney, Doug Rand, and Lindsay Milliken of the Progressive Policy Institute and the Federation of American Scientists have discovered, the Biden administration could resuscitate the startup visa with a few pen-strokes. It wouldn’t require congressional approval, and it wouldn’t have to go through the time-consuming federal rulemaking process, because the IER has already navigated that maze.
Instituting the visa would provide a tremendous boost to U.S. innovation and competitiveness. Ambitious immigrants have founded far more than their fair share of the companies that made America great. Immigrant founders are an incredible gift to the American people, as Procter & Gamble (whose founders came from England and Ireland), DuPont (France), Goldman Sachs (Germany), Nordstrom (Sweden), and Google (Russia) all illustrate. They have created tens of millions of jobs and contributed to our invaluable culture of openness and innovation, and this outsize impact continues today. Of the founders of U.S. “unicorns”—technology companies worth more than $1 billion—more than half are immigrants.
You would think that the dire straits of the global economy would motivate anyone to welcome to their country people who could create jobs. England, Canada, Australia, and even China have programs to attract this valuable class of job creators. As it turns out, the U.S. too has conceived such a program: the International Entrepreneur Rule.
This rule was envisaged, as a more immediate alternative to legislation, to allow the U.S. to award entry to up to three founders per company for up to five years. The specifics of the rule are complicated, but here’s the fast version: The IER allows the DHS to quickly award “parole” (temporary entry) to immigrant founders, enabling them to launch and run their businesses in the United States. This is a more discretionary and less bureaucratic process than most immigration procedures, and allows for contingencies in job creation and economic activity.
As the Progressive Policy Institute paper found, IER is ready to go. Established in the final days of the Obama administration as a work-around in response to congressional stonewalling of immigration reform, the rule was scheduled to go into effect shortly after Trump took office. Trump’s anti-immigrant team immediately suspended the policy with the intention of rescinding it. Fortunately for Joe Biden, Trump’s team never bothered to follow through. So today the IER sits ready for enactment, free of legal and executive barriers.
For President Biden, the IER is a godsend. Biden wants quick wins in order to show his seriousness about stimulating the U.S. economy. He also wants to show the U.S. business community that he is on its side and that he wants to create business-friendly policies. To the essential technology sector, Biden wants to show that he is not only about punishing Big Tech. And to potential immigrant founders, Biden wants to signal a clear welcome.
The IER fulfills the entire wish list. The cost of implementing it is negligible. And the economic impact will be immediate. According to DHS analysis, under the IER, nearly 3,000 new founders per year would stream onto our shores. The Progressive Policy Institute estimates that firms founded by these new arrivals could create as many as 1 million jobs within 10 years. And that figure does not take into account the large multipliers that STEM firms, which immigrants most commonly found, provide to their surrounding communities.
The IER is no substitute for a suite of legal reforms to encourage legal immigration. It is a stopgap measure, and it could be subject to court challenges in ways that an act of Congress would not. That said, we now live in an era of government by executive order and rulemaking, and the gridlock in Washington, D.C., is unlikely to relent on hot-button issues such as immigration. So making the IER a central player in our de facto immigration policy is a no-brainer, both for Biden and for the good of the country. Biden’s team would do well to publicize the rule broadly, recruit entrepreneurs, and make the IER an administratively easy option for entrepreneurial immigration.
As we struggle to recover the millions of jobs lost through the pandemic and government mismanagement of COVID-19 mitigation efforts, there is no excuse for not grabbing a free lunch of this magnitude. The IER is in place, ready to go, and ready to play a large part in the economic recovery of our nation. Please make it so, Joe.