Immigration, Innovation and Job Creation

I found an interesting article in the May 14th issue of the Wall St. Jl. I am including a few excerpts from that article over here. In addition, have added a few elements to reflect my own opinion.

For decades, the US has been a magnet for immigrants. During the 20th century, millions of talented foreigners, from Alfred Hitchcock to Sergey Brin, flocked to our universities and benefited from our financial capital and open culture. In the process, thousands of them started businesses in the US; in fact several of them created entire industries.

There are signs, however that the allure of America is fading. A study by UC Berkeley, Duke and Harvard has found that, for the first time, a majority of American trained entrepreneurs who have returned to India and China believe they are doing better at "home" than they would be doing in the US.

Innovation in the US is driven in large part by first-generation immigrants. The US Patent Office states that immigrants are responsible for double the patents as non-immigrants. A 1% increase in immigrants with college degrees leads to a 15% increase in patent production. In recent years, immigrant inventors have contributed to more than a quarter of all US global patent applications. Since 1995, 52% of all Silicon Valley firms have been co-founded by immigrants.

Why is immigration so essential for innovation? Immigrants bring a much needed set of skills and interests. Last year, foreign nationals received more than 60% of all US engineering doctorates. (American students, by contrast, dominate doctorate programs in the humanities and social sciences). According to the US Department of Labor, only 5% of US workers are employed in fields related to science and engineering, but they are responsible for over 50% of sustained economic expansion.

Immigrants add to the diversity of the US. With diversity comes a multiplicity of cultures, outlooks, different ways of looking at things, different ways of solving problems. With diversity comes innovation. Many of the most innovative places in the world, such as Silicon Valley and New York City, are also the most diverse.

One lesson from all of this is: If you want to build a culture of innovation in your organization, strive hard to promote diversity and inclusion. Try to tap into the value of such multiculturalism. Innovation will be a clear outcome.