I watched with some alarm the All Things Digital Conference last week in Silicon Valley. There was a tone of caution and concern in a number of the presentations there. This is notable because Silicon Valley and its technology entrepreneurs have always been among the most optimistic sectors of our entrepreneurial community. Not so much this year.
Some of this dyspeptic trope centered around regulation, which is increasingly wet-blanketing this most effervescent sector of U.S. business. For example, Mary Meeker of Kleiner Perkins Venture Capital, who is historically among the most optimistic analysts on all interactive things, concluded her presentation with this comment: “What gives me pause is that when we were born, 85% of households paid federal income taxes. Now only 49% do. Soon more people will receive government aid than pay taxes. That scares me a lot.”
Though Silicon Valley has been politically liberal over the years, there is a palpable unease there with the bureaucratic overreach of the present administration. This is both in terms of proactively onerous regulatory and mandate burdens on small business and also in terms of what is not being done to help entrepreneurs grow.
One of the more egregious examples of the latter is the issue of skilled worker immigration. Larry Ellison, the CEO of Oracle, spoke about this at All Things Digital, stating, “Immigration is a good thing. It is simply madness that after Stanford grants someone a Ph. D., the next thing they get is an INS letter saying, ‘Get out.'”
Ellison is right. Over 600,000 high-skill jobs are going begging this year. Additionally, immigrants created 28% of all new firms last year (CNN Money, May 7, 2012). Over the years highly-skilled immigrants have provided one of the USA’s greatest competitive advantages. Their knowledge of world markets, their passion, their ambition, their education, their skills, etc., are excellent.
Yet current American immigration officials are utterly clueless. They do everything they can to prevent immigrants from helping make the U.S. more competitive. How stupid can the present government be?
Take the case of Kunal Bahl who graduated from Wharton in 2007. He was unable to get a VISA that would allow him to start a company. What did he do? He went back to India and started SnapDeal, India’s Groupon, and created thousands of jobs in New Delhi. (www.techcrunch.com, 3/6/11)
More than a half million engineers, scientists, doctors, mathematicians, and researchers are stuck in immigration limbo, according to Vivek Wadhwa, who recently completed a study on this subject for Duke University and the Kaufman Foundation.
The U.S. is falling behind in business, something our current bureaucracy seems not to understand. Niall Ferguson at Harvard Business School refers to a recent survey of more than 1,000 HBS alumni in which only 16% favored the U.S. as a place to locate a business. The reasons? Regulation and anti-business taxation and policy. Ferguson opines that with regard to regulatory issues, “the United States is declining in terms of competitiveness.”
Brooks Atkinson, columnist for the NY Times (Once Around the Sun, 1951), once said. “Bureaucracies are designed to perform public business. But as soon as a bureaucracy is established, it develops an autonomous spiritual life and comes to regard to public as its enemy.”
Yup. Thank you, Brooks.