A broken U.S. immigration system is helping foreign countries woo California's tech founders. The Golden State’s new global talent program could reverse the trend
Of all the places on the planet, California has arguably benefitted the most from the twin pillars of cutting-edge technology and bold entrepreneurship. The Golden State has the highest concentration of tech talent on Earth. Much of this talent has come from other countries: Immigrants and children of immigrants represent a disproportionate share of founders of successful companies, including Apple, Intel, Google, Stripe, and WhatsApp.
California could have become an even greater story of technological success if all the talented immigrants who had wanted to work and live there had been allowed to. In our 2012 book, The Immigrant Exodus, we documented how restrictive and borderline-cruel U.S. national immigration policy was, in forcing many founders and smart engineers to move away. While many other countries have created special visas and recruitment programs to attract STEM talent and founders, the U.S. has maintained a Byzantine and confusing immigration process with exceptionally limited slots for multi-year work visas. Today, willing migrants sometimes have to wait several decades for their Green Card and permanent residency.
The opportunity cost of this backward policy can be estimated by looking at the explosion of unicorns in India, China, and other countries. That giant sucking sound? It’s the rush of immigrant techies flying the U.S. coop. In Canada, a new Cannuck program specifically for non-citizen technology workers holding U.S. H1-B visas has filled its 10,000-strong applicant queue in just two days.
As initiatives in U.S. national immigration policy continue to languish, California Governor Gavin Newsom is not waiting around. Newsom budgeted $2 million for a Global Entrepreneur in Residence (GEIR) pilot program at the University of California (U.C.). The program’s goal is to attract and retain international talent and bolster high-tech industries such as semiconductors by enabling U.C. to sponsor visas for talented graduates and promising technologists to build startups under U.C. guidance.
This innovative approach aims to take advantage of two opportunities. First, it aims to retain foreign-born graduates who obtain their degrees from Californian institutions and who would otherwise take their skills elsewhere due to visa obstacles. Second, the program will strategically target expertise in semiconductor research and manufacturing to align with the federal CHIPS Act’s $53 billion investment in revitalizing America’s position as a chipmaking superpower. Although the U.S. has many experts in semiconductor design and tooling, it sorely lacks cutting-edge expertise in the latest fabrication technologies. The U.S. share of global semiconductor manufacturing capacity has consequently fallen from 37% in 1990 to just 12% today. Korea and Taiwan have raced ahead of the U.S. in recent years, and much of the best talent in this rarified area works in those places.
The U.C. GEIR will select accomplished foreign graduates from STEM programs to receive mentorship and resources to help them launch companies. As “entrepreneurs in residence,” participants will collaborate with U.C. researchers, lending their own technical skills. U.C. will sponsor their work visas, allowing them to continue developing their ventures.
The model emulates successful initiatives in other regions. For example, the Global Entrepreneur in Residence program at UMass Boston has shown impressive results since its launch in 2015. Founders working in UMass Boston’s GEIR program have raised more than $1 billion in funding, launched 70 new startups, created thousands of jobs, and generated $500 million for Massachusetts’s economy. Michigan has a similar program, growing rapidly with the support of a mix of private and state funding. More broadly, political advisor Craig Montuori founded the Global EIR Coalition to support cities and states in sharing best practices, expanding the regional economic effects of these international entrepreneurs, and fostering innovation-based economic growth, with visas serving as an effective tool for attracting and retaining the kind of talent that builds world-changing companies.
Ironically, both state programs, have focused on attracting U.C. graduates and other technologists from California. That’s not surprising: You go fishing where the fish are–and California is the biggest talent pool in the world.
“While other countries use their startup visas as a marketing tool to attract the world’s best and brightest, all the U.S. must do is offer them a chance to stay. The U.C. Global Entrepreneurs program is the chance and hope these entrepreneurs have been looking for to build their businesses throughout California and create great American jobs,” Montuori points out.
The program’s proponents argue that the U.C. GEIR could be used to jumpstart California’s semiconductor manufacturing industry and to help the state tap into the deep coffers of the CHIPS Act, which offers $52 billion in subsidies and tax credits to foster semiconductor manufacturing. Artificial intelligence might be another area in which the GEIR program could have a disproportionate effect. According to recent research by the National Foundation for American Policy, 77% of the leading U.S.-based A.I. companies were founded or co-founded by immigrants or the children of immigrants, and 42% of the top U.S.-based A.I. companies had a founder who came to America as an international student.
In many areas, California already sets the de facto national policy for the rest of the United States. As the fifth-largest economy in the world, California behaves more like a hegemon than a sub-region subject to a higher authority. Should this program prove effective, California has the deep pockets to expand the EIR and the political power to forge workarounds to set in motion its own international immigration policy.
Governor Newsom–and most of California’s technology community–understand the powerful pull the state has on global talent and recognize that talented immigrants are an economic unicorn, a free lunch. They also understand that as California faces its first-ever population decline due to high costs and technology layoffs. If the growth miracle is to continue, the state needs to attract people who create the high-paying jobs and world-leading companies that keep it prospering. Rather than wait for Washington, D.C., to reform national policy, California is forging its own path–against which other nations, let alone other states, will find competing difficult.
However, the broader problem for the U.S. remains. In July 2023, Soundarya Balasubramani, an Indian immigrant and product manager at Salesforce, released a book called Unshackled, which focused on the same issues we addressed in our book a decade earlier. It’s part investigative journalism, part how-to guide for high-tech workers seeking to secure legal employment status in the United States. Balasubramani found all the same problems we had found–and more.
“In the past year, I’ve received messages from and spoken with hundreds of high-skilled immigrants, mainly from STEM fields. The common thread of emotions they all share is this: The immigration system in America is outdated, complex, and not set to serve those who contribute the most to this country. With the green card backlog extending and the chances of getting picked in the H-1B dipping to their lowest levels, the American Dream, for many, has become the American Nightmare,” says Balasubramani.
Yet hope persists. “The ray of sunshine amidst all this seems to be the resilience of a few high-skilled immigrants who continue to find ways, within the system, to work, start companies, and do the insurmountable,” says Balasubramani.
Perhaps, as it has done for the technology universe over the past 50 years, California can lead the way, forging a smarter high-skilled immigrant policy that will help keep the Golden State golden–and revitalize American tech and the U.S. economy.
Vivek Wadhwa is an academic, entrepreneur, and author. His book, From Incremental to Exponential, explains how large companies can see the future and rethink innovation.
Alex Salkever is a Silicon Valley technology executive who has advised dozens of technology companies on strategy and go-to-market. They are co-authors of The Driver in the Driverless Car and Your Happiness Was Hacked.
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