Immigration and the Future of American Innovation: Does America Need to Pump Up the Volume?

It should come as no surprise to anyone following the global economy that when it comes to innovation and competition, America has lost that loving feeling. Numbers in key areas of innovation—percentage of patents issued, government funded research and venture capitalists’ investments—are all down. While some point a finger at a weaker economy, others look to poor domestic policy and increased global competition. Either way, American innovation is slowly fading on the global stage.

In the Huffington Post this week, Arianna Huffington examined where the United States ranks in terms of global innovation and competition—dead last, according to the Information Technology and Innovation Foundation. The percentage of patents issued to Americans dropped (down 2.3% in 2009), government funded research is down (now 27% from 50% in 1979), and venture capitalists aren’t investing as much in the U.S. (down $12 billion in 2009 from $22 billion in 2008). Why? According to a report by the Boston Consulting Group, America is falling behind in several areas key to supporting innovation—work force quality and economic, immigration and infrastructure policies. The recent economic recession and the loss of our educational edge are also cited as reasons for America’s innovative decline.

So how does America pump up the innovative volume? Huffington suggests that America needs to kick internet technology plans into high gear, invest in the green economy and revamp our broken immigration policy to allow more foreign-born entrepreneurs to start businesses in the U.S. and create American jobs.

Huffington writes:

Great ideas come from all over the world, and if we don’t welcome the people with those great ideas and make it easy for them to come here, they will go elsewhere. Indeed, they already are going elsewhere. Right now the U.S. has an immigration limit for skilled workers of 65,000, and an additional 20,000 slots for those with advanced degrees from U.S. universities. This kind of rigid cap doesn’t make sense in today’s world. The “visa process has been plagued with backlogs resulting from this quota,” says Jonathan Ortmans, a senior fellow at the Kauffman Foundation. “As a result, high-skilled immigrants are looking for opportunities elsewhere in an increasingly competitive global labor market, [and] taking their innovative ideas with them.”

While the Start-Up Visa Act—a recent bipartisan bill proposed by Sens. John Kerry (D-MA) and Richard Lugar (R-IN) to “drive job creation and increase America’s global competiveness by helping immigrant entrepreneurs secure visas to the United States”—is a good start, it only goes so far in attracting the best and brightest talent from around the world.

As leading economists and immigration experts continue to point out, reforming our entire immigration system—reform which includes a legalization program for unauthorized immigrants in the U.S. as well as revised high- and low-skilled visa caps—is paramount to reviving our economy, re-investing in innovation and technology and giving American back its competitive edge.