States and Cities Push Forward with Immigration Reform to Promote Entrepreneurship

In the U.S. there is strong bi-partisan consensus that immigration is a key driver for entrepreneurship and regional competitiveness.  With federal immigration reform essentially shelved for 2014, cities and states are searching for their own solutions to attract and retain high-skilled immigrants. Proposals by Michigan Gov. Rick Snyder and other policymakers represent new approaches to immigration reform that can support local entrepreneurship and regional economic development.

House Speaker John Boehner has withdrawn Republican support for immigration reform in 2014, effectively ending any federal push to address the issue this year, according the Washington Post. The move comes in the wake of a nationally publicized request from Michigan Governor Rick Snyder for the federal government to allocate 50,000 EB-2 (high-skilled worker) visas over five years for exclusive use by the City of Detroit.

While Detroit continues to suffer from the crippling effects of bankruptcy, there are plenty of high-tech and R&D-related jobs in the city that are going unfilled. Gov. Snyder, as well as civic leaders in Detroit, argue that investment in public education, arts, technology, and manufacturing should be paired with support for entrepreneurship to revive the ailing city. Governor Snyder’s proposal has sparked national discussion on the potential of regional visas to stimulate economic growth.

Gov. Snyder, however, has moved forward with his own strategy to increase Michigan’s high-skilled immigrant population. The Michigan Office for New Americans was launched in late January under an executive order with the mission of improving state immigration policies and making recommendations for policies to support immigrant entrepreneurship, workforce development, housing, and health care programs. The new office also will be responsible for directing the Global Michigan Initiative, a statewide public-private effort designed to attract and retain high-skilled immigrants.

Other cities in the Midwest have been making national headlines for their efforts to attract and retain high-skilled immigrants. The City of Dayton has been highlighted in the New York Times for their “Welcome Dayton” program, which has sought to attract legal immigrants from across the country by partnering with local organizations to offer business services tailored for immigrants, training interpreters for public offices, adding foreign-language books in local libraries, providing free English classes, and assisting foreign-born doctors and engineers at local universities with gaining certificates to practice their trade in the local community. The article also references similar initiatives that have launched in Chicago, Cleveland, St. Louis, Columbus, and Lansing, Michigan.

New immigration policies at the state and local level could be bolstered by White House executive action to implement regionally based visa programs. A regionally based visa program would restrict the residency and job location of immigrant entrepreneurs but not their mobility. At the national level, a regional-based visa program would direct immigration to states that want it without forcing additional immigration on states that do not.

Brandon Fuller of the NYU Urbanization Project has suggested that the federal government make additional visas available to states instead of carving them out of existing visa caps, allow all states the option to recruit immigrants to their towns and cities, allow states to sponsor visas that would require holders to live in a certain region, and permit states to determine the skill-mix of the immigrants they recruit.

In a recent report, Dane Stangler and Jared Konczal of the Kauffman Foundation suggest that making 75,000 startup visas available for current holders of H-1B and F-1 visas could create 1.6 million U.S. jobs over the next 10 years. Critics suggest that skilled immigrants will use the opportunity to move to more prosperous regions or that the growth of entrepreneurial immigration will negatively affect the opportunities of native-born entrepreneurs.

Silicon Valley has been a strong proponent of immigration reform to support entrepreneurship. Much of the growing influence of the national tech lobby in Washington has focused on support for immigration reform targeting high-skilled workers and entrepreneurs. Research from the Kauffman Foundation shows that in 2012, 43.9 percent of Silicon Valley companies were founded by immigrants. In 2011, 24 of the top-50 venture capital firms were founded or co-founded by immigrants. Microsoft’s highly celebrated promotion of Indian-born Satya Nadella to CEO underscores Silicon Valley’s reliance and support for high-skill immigration.

Other federal programs already exist to recruit regional immigrant entrepreneurs. The EB-5 visa program, facilitated by the U.S. Citizenship and Immigration Services, is intended to provide U.S. citizenship for wealthy investors from developing countries in exchange for investment of at least $500,000 in regional economic development initiatives. While there is wide bi-partisan support for channeling foreign investment to support regional economic development in distressed areas, the execution of the EB-5 program has received strong criticism. Critics argue that the program needs oversight from the Department of Commerce, more transparency, and that the program should be structured to work more closely with local EDAs to support regional development initiatives. Audrey Singer and Carmille Galdes of the Brookings Institution highlight the current challenges and potential for the program in a recent report.

As Congress remains in gridlock, states and cities are forging ahead with policies to attract immigrant entrepreneurs. The Obama administration has expressed openness towards the idea of using executive action to support these initiatives.