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The sinking H-1B visa program: Will innovation need to be outsourced?

November 10, 2009

Over the past year, the deteriorating US economy combined with anti-immigration politics has hit the H-1B visa program – a critical source of talent and innovation for both Silicon Valley and Wall Street alike. In fact, the Wall Street Journal recently reported that the program has plenty of spaces left to be filled as only 46,700 petitions have been filed as of September 25. In sharp contrast, it took only one day to fill up all 65,000 slots for 2009 – just before the recession began to bite. The Wall Street Journal also noted that in 2008, 44% of approved petitions were for foreigners who work as systems analysts or programmers while the second largest category consisted of professionals who work in universities. Furthermore, it was also noted that Indians accounted for approximately half of all H-1B visa holders.

innovation Outsourced

However, and while H-1B visa holders and other highly skilled immigrants account for only a small percentage of the US workforce, their overall contribution toward US innovation and economic growth is huge. For example:

  • The Wall Street Journal article noted that visa and green-card holders accounted for approximately 35% of Microsoft’s patent applications in the US while Krishna Bharat, a key developer behind the Google News service, had joined Google through the H-1b program in 1999.
  • A 2007 Business Week editorial noted statistics which showed that more than half of all Silicon Valley startups over the last decade were founded by immigrants and these tech companies employed 450,000 workers and had sales of more than US$52 billion in 2005. Moreover, they editorial noted that Indians have founded more engineering and technology companies in the US over the past decade than immigrants from Britain, China, Japan and Taiwan combined while 26% of all immigrant-founded companies had Indian founders.
  • In fact, well known members of the global Indian Diaspora include Vinod Khosla, the co-founder of Sun Microsystems; Vinod Dahm, the creator of Pentium Chip; Sabeer Bhatia, the founder and creator of Hotmail; Rajat Gupta, the Chief Executive of McKinsey & Co.; Indra Nooyi, the President and CFO of Pepsi Cola; Rono Dutta, the President of United Airlines; Rajiv Gupta, the GM of Hewlett Packard; Rakesh Gangwal, the President and CEO of US Airways; Victor Menezes, the Chief Executive of CitiBank; Rana Talwar, the Chief Executives of Standard Chartered Bank; Arun Sarin, the Chief Executive officer of Vodafone; Arun Netravali, the President of AT&T-Bell Labs; Pradeep Sindhu, the Vice-Chairman and founder of Juniper Networks; Amar Bose, the founder of Bose Audio; Suhas Patil, the founder and chip designer Cirrus Logic; Sanjay Kumar, Chairman and CEO of Computer Associates; Keki Dadiseth, the head of (HPC WorldWide) of Unilever Plc.; Aman Mehta, the Chief Executive Officer of HSBC; Girish Reddy, a Director and member of the Executive Board of Goldman Sachs; Raghuram Rajan, the Chief Economist of the International Monetary Fund; and Kanwal Rekhi, the former CTO of Novell Networks.
  • An early 2009 study by William R. Kerr of the Harvard Business School and William F. Lincoln of the University of Michigan noted that immigrant scientists and engineers represented 24% and 47% of the entire US scientist and engineering workforce with bachelors and doctorate educations in the 2000 Census.
  • Moreover, a February 20009 Business Week editorial noted that the Kerr and Lincoln study found that in 2006, Indians and Chinese immigrant alone contributed to 33% of patents filed by Intel, 23% of patents filed by Microsoft, 22% of patents filed by IBM and 11% of patents filed by Procter & Gamble.

Hence, any decrease in the number of highly skilled immigrants to the USA, whether due to the economy or to anti-immigration policies, will mean that innovation will need to be outsourced overseas and in the long-term there will be fewer jobs in the USA for native born Americans. In other words, the next Silicon Valley or innovation hub could very well develop in India or China and not the USA.

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Related posts:

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  3. India & innovation: Why hasn’t India produced an Apple, Google or Microsoft?
  4. Look who is hiring and investing in USA: Indian outsourcers
  5. Even God outsourced the Ark to Noah


Written by JohnU · Filed Under Outsource Blogs 

Comments

One Response to “The sinking H-1B visa program: Will innovation need to be outsourced?”

  1. sak on December 29th, 2009 1:44 am

    Meanwhile, you can apply for a patent to anything, worthy or unworthy. And the H-1B definition of “highly skilled” equals a bachelor’s degree. Take it from someone who sits in a cube in one of these “high tech” companies: many visa holders are simply spreadsheet jockeys doing PM or general admin jobs that one of our >10% unemployed citizens could be doing. Please, change the definition of “highly skilled” to mean just that, so that we are not importing generalists who take jobs that Americans, who often have more experience and education, could be holding. In this time of need, please, let’s just import the truly “Best and Brightest.”
    And no, I’m not a xenophobe or racist. Save the “America has a long history of immigration” and “we are all immigrants” speechifying…we have an economic crisis here, and immigration levels should be adjusted accordingly, not AFTER people have lost their homes and careers to people who often have less education and experiencesimply so corporations can pay $10 less per hour. Bring only the best and brightest, not the folks who simply know how to use Excel. This is not an issue to be discussed by idealists or theorists, or to be governed by CEO’s who simply benefit from lower wages. I’ve been there, and I see what is really happening.

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