President Trump rescinds start-up visa
Last month President Trump issued a formal proposal to rescind the International Entrepreneur Rule, a regulation that allowed entrepreneurs to grow and scale their businesses in the US. In order to comply they had to prove their company’s potential for rapid business growth and job creation.
According to the Kauffman Foundation, a non-profit that promotes entrepreneurship, immigrants are nearly twice as likely as American-born citizens to start businesses in the US.
“Research finds that immigrants are entrepreneurial, as measured by business ownership,” writes Magnus Lofstrom for IZA World of Labor. “There is little credible research showing much of a downside to such entrepreneurship and much research pointing to significant positive contributions.”
51% of all US start-up companies valued at $1 billion have at least one immigrant founder, according to the National Foundation for American Policy.
Overall global venture capital investment has increased since 2004, but the share invested in US companies has declined significantly during that time from 85% to 54%.
While US immigration laws may have compromised the country’s ability to compete for talent, other countries are making it easier to encourage foreign-born entrepreneurs to start or relocate there. For example, investment in China-based venture capital-backed companies has grown at a faster pace than the US and now accounts for one-quarter of the global venture capital dollars invested.
However Lofstrom writes, “there is no strong evidence that self-employment is a very effective tool of upward economic mobility among those in greatest need of such assistance: low-skilled immigrants.
"Until there is strong and reliable evidence of the success of visa programs designed to attract high-skilled entrepreneurs, and of the criteria that work best to achieve this goal, policymakers may want to pursue other strategies to realize the greatest economic gains from immigration. Since education is consistently found to be a strong predictor of immigrant success, among both business owners and wage earners, policies targeting high-skilled immigrants more broadly might prove more successful than policies with a broad focus on entrepreneurship.”