Need jobs? Bring in the foreign entrepreneurs!

July 19, 2011: 1:21 PM ET
Legislation making visas more accessible to immigrant entrepreurs has met stiff opposition. But a nonpartisan organization brings the topic back up against a backdrop of high unemployment.

Legislation making visas more accessible to immigrant entrepreneurs has met stiff opposition. But a nonpartisan organization brings the topic back up against a backdrop of high unemployment.

NEW YORK (CNNMoney) -- Giving more foreign entrepreneurs visas could help lower unemployment and jumpstart the economy, a nonpartisan research organization said.

The politically charged recommendation comes out of the Startup Act, a sweeping proposal released by the Kauffman Foundation Tuesday.

The Act proposes giving foreign entrepreneurs more access to visas and extending green cards to foreign students that graduate from U.S. universities with STEM degrees (science, technology, engineering, and mathematics).

"The startup engine is sputtering," said Robert Litan, vice president of research and policy at the Kauffman Foundation and one of the authors of The Startup Act. The number of startups that employ people has been declining as has the number of jobs that new firms are generating, he said.

Opponents to immigration reform argue that letting foreigners into the country would mean fewer jobs for Americans. But proponents counter that the United States needs foreign entrepreneurs who start companies and create jobs.

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Immigrant entrepreneurs founded 25.3% of engineering and technology companies between 1995 and 2005, according to research by the Duke University Master of Engineering Management program. And over half -- 52.4% -- of Silicon Valley startups had at least one immigrant key founder.

The idea of extending visas is not new. In March, bills from the House and the Senate proposed that immigrant entrepreneurs should have easier access to visas. The bills, however, haven't gone anywhere yet.

But the high unemployment rate could breathe new life into the issue -- even as the nation's immigration policy meets with stiff opposition.

"I am a little bit more optimistic about entrepreneur visas than I may have been two or three months ago," said Litan. "If the unemployment numbers stay high, there will be growing interest in this kind of reform as a way to bring the unemployment rate down."

Others agree. "This is exactly the type of legislation that would strengthen the economy and create jobs in the long run," said Darrell West, vice president of governance studies at the Brookings Institution. "So it is crazy that we don't move ahead."

"Fight like hell": Sen. John Kerry, a Democrat from Massachusetts, Sen. Richard Luger, a Republican from Indiana, and Sen. Mark Udall, a Democrat from Colorado, introduced the Startup Visa Act of 2011 in March.

At the same time, Congresswoman Carolyn Maloney, a Democrat from New York, released a matching bill in the House of Representatives.

The bills call for a new temporary visa, known as the StartUp Visa, or the EB-6, which is more accessible to entrepreneurs. The requirements for the current Visa -- the EB-5 -- are high: Entrepreneurs must invest $1 million in a U.S. business that creates at least 10 jobs.

Many of those visas go unused each year. Less than half of the 9,940 EB-5 visas allowed yearly are allocated, according to the Kauffman Foundation.

Not passing this bill could mean America "losing out on these competitive, job creating businesses," said Senator John Kerry in an email. "And I for one am going to fight like hell to make sure that doesn't happen."

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One reason the legislation has gotten stuck is because of opposition to immigration reform. Immigration reform advocates are also at fault. They refuse to support it unless it is part of a more comprehensive immigration package.

"Visas for entrepreneurs would pass both houses were it not for the highly polarized political environment and the interest of some individuals holding the popular elements hostage to the less popular ones," said West of the Brookings Institution and author of Brain Gain: Rethinking U.S. Immigration Policy.

The proposed legislation in the House and Senate softens the restrictions, but still maintains the cap on the number of visas. The Kauffman Foundation's proposal suggests a higher limit or no limit at all.

"Look, if anyone can meet that criteria, why kick 'em out? Why have a limit? Let's bring 'em in," said Litan. "There is no downside to it. None. Zero." To top of page

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