The House Judiciary Committee has been considering a proposal by Silicon Valley Congresswoman Zoe Lofgren to end restrictions on the most critical resource driving technological innovation. This resource is human talent, and with the greatest public university system in the world, California should be fertile ground. Due to arbitrary and inflexible boundaries imposed by the federal government, however, California’s most innovative companies are forbidden from tapping into this abundant talent pool.
Despite a strong demand for skilled scientists and engineers in the technology sector, one out of three master’s degree recipients, and more than half of all Ph.D. students graduating from California’s research universities, cannot directly enter the work force. Because these students come from abroad for a world-class education, federal authorities, not market conditions, dictate who can stay and who must return home. Through strict “talent caps” and a lottery process, Congress randomly sends away many of the state’s most highly trained and valuable workers. Instead of trying to patch a flawed system, the Lofgren bill eliminates “talent caps” altogether.
According to H.R. 6039, all master’s- and Ph.D.-level science and engineering graduates, regardless of nationality, will have an equal opportunity to enrich California’s economy based on the quality of their work. This bill will end the counterproductive process of training the world’s best and brightest students, only to encourage them to leave and compete against American interests. Such a scenario would be absurd for other resources. Imagine, for instance, if America took 50 percent of the oil it imported, processed it in American refineries and then returned it to OPEC free of charge. Why do we value the fuel that powers our cars more than the engineers who design them?
Without scientists and engineers, California cannot sustain its role as a pioneer in the global digital economy. If companies are forbidden to hire talented graduates at home, they will be forced to move these jobs out of state. Due to the government’s restrictions, one recent survey found that 65 percent of high-tech companies are actively shifting skilled workers to subsidiaries abroad. Depriving the tech sector of talent not only tarnishes the state’s prestige, but could also devastate the economy.
As California’s budget deficit balloons past $17 billion, we cannot afford to risk losing nearly 1 million high-tech jobs generating more than $95 billion in taxable income. These jobs are created by entrepreneurs with the vision to turn new technologies into successful companies. Silicon Valley has thrived as a beacon of innovation, attracting the world’s most talented visionaries.
According to the National Venture Capital Association, 40 percent of American tech startups were founded or co-founded by foreign-born entrepreneurs. Many of these companies, including Google, Yahoo!, Intel, eBay and Sun Microsystems, today help form the foundation of California’s economy. When technology firms thrive, the state also benefits from the creation of instant billionaires. In 2006, for instance, four foreign-born Google employees alone contributed $200 million in state tax revenues.
By shutting the door on gifted young graduates, the federal government prevents them from training the next generation of technology leaders. At Stanford University, for example, where 10 percent of Silicon Valley’s CEOs earned their degrees, more than 60 percent of engineering graduate students come from abroad. After receiving a world-class education and substantial experience in the high-tech work force, such graduates are uniquely qualified to share their knowledge. As a result, nearly half of all computer science and engineering professors nationwide are foreign-born. If skilled students graduate with a diploma in one hand and a plane ticket in the other, however, America will forfeit its ability to create, invent and compete on the global stage.
The computer and Internet revolutions began in Silicon Valley due to a remarkable convergence of investment, knowledge and, above all, talent. After graduating with advanced degrees from America’s best research universities, however, talented entrepreneurs are randomly and arbitrarily banished to apply their knowledge abroad. Congress should rapidly endorse U.S. Rep. Lofgren’s proposal, as well as the Senate version introduced last week by Sen. Boxer (S. 3084). If artificial barriers continue to isolate California’s tech sector from its talent pool, the Silicon Valley could soon transform into an island.
Daniel R. Ballon is a public policy fellow in technology studies at the Pacific Research Institute.