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How more states and cities can retain immigrant entrepreneurs

How more states and cities can retain immigrant entrepreneurs

 


Written by Conor O'Brien

Important points

States, cities, and universities can establish and fund Global Entrepreneurs in Residence (Global EIR) programs to retain immigrant founders who start companies locally. The Global EIR program can provide uncapped H-1B visas to promising founders who are unable to remain in the United States. At scale, global EIR programs serve as anchors for new technology clusters.

introduction

States and localities have few policy levers if they want to attract and retain immigrant founders, and while one of the most promising global expatriate entrepreneurship programs remains underused and poorly promoted, state lawmakers are finally beginning to take advantage of it.

The Global EIR program uses the university's cap-exempt H-1B status to provide visas to entrepreneurs who are founding promising companies nearby. In the most recent state budget cycle, New York approved her $4 million in state support for up to eight global EIR programs across the state. This could provide a much-needed injection of entrepreneurship to a state suffering from a sharp decline in economic vitality. Washington also appropriated funds for state pilot programs. New Jersey lawmakers are also considering dedicating $500,000 to a new global EIR program focused on AI at the state's universities. These programs allow more entrepreneurial graduates to stay home rather than being forced to leave the country due to inadequate immigration systems.

The recent enthusiasm in New York, Washington, and New Jersey is a sign that more states and cities are using global EIR programs to build high-potential entrepreneurial corps, viewing immigration policy as an important part of their economic development toolkit. In addition to being there. This report provides a brief overview of how state and local governments, as well as universities themselves, can leverage this model to foster entrepreneurship and innovation in their own backyards.

How states and cities can use the global EIR model to build technology hubs closer to home.

problem

Foreign-born startup founders have few options for entering and remaining in the United States.

Unlike many developed countries, the United States does not have a separate startup visa.

At the same time, the primary temporary visas used by skilled workers to enter the United States either prohibit them from starting a business or actually make it difficult for them to do so. Research shows that immigrants as a whole are far more entrepreneurial than natives when given the opportunity, but existing visa programs make it difficult to establish startups.

Although entrepreneurs can technically use H-1B visas, in practice this is often difficult and rare. Establishing the employer-employee relationship required for H-1B sponsorship often requires the founder to relinquish majority control to the co-founders. The Department of Homeland Security is nearing finalization of rules that will make this easier, allowing certain entrepreneurs, even those with a controlling interest in the company, Make it clear that you can sponsor a visa.

Aside from the complexities of H-1B for founders, there is the additional problem that the H-1B program is too small to meet demand. Each year, private companies across the United States compete for a limited number of 85,000 H-1B visas, which sponsor skilled foreign-born workers in specialized occupations. Demand for H-1B visas has increased dramatically since the cap was last updated in 2006. USCIS received 470,000 applications last year. This means that the probability of an individual winning a randomly assigned lottery ticket is steadily decreasing.

Importantly, founders of H-1B sponsored companies are subject to annual visa caps. This level of uncertainty can make it nearly impossible for founders to raise funding, and perhaps deter would-be founders as a whole.

However, through the Global EIR Program, local universities, with support from the state government, can solve this problem for entrepreneurs and support local economic development at the same time.

solution

In 2000, Congress exempted universities and nonprofit organizations from H-1B caps in the 21st Century American Competitiveness Act. Universities and certain non-profit organizations established within universities can utilize this authority to sponsor immigrant entrepreneurs in two ways.

The first is what the Global EIR National Peer Network calls the adoption model. With this program design, the university employs local entrepreneurs part-time, typically to mentor business students and teach courses. The university submits her H-1B application with cap exemption for part-time work. If approved, the startup will also simultaneously file an H-1B application for the founder's girlfriend, whose work at the university will exempt her from the 85,000 visa cap. During the day, entrepreneurs build businesses in their communities and create jobs and value within the local economy. In a part-time role, the Founder will use their relevant expertise to support students.

The second model allows startups to directly sponsor founders who are physically located at the university and whose activities align directly with the university's mission. Under this model, founder companies can receive cap exemptions without additional university sponsorship if they provide documentation that proves a logical connection or nexus between their work and the university's key functions. You can apply directly for an H-1B. This second model of his requires more specialized legal services on behalf of the founders, but typically does not require direct funding from the university.

State and local governments across the country can help facilitate this type of sponsorship by providing dedicated funding for global EIR programs. Global EIR programs can scale independently and sponsor dozens of local founders each year who may ultimately have to leave their state or country. In contrast to many other forms of local economic development spending, global EIRs directly attract and retain top talent who are actively building businesses in the communities they serve.

In our Global EIR program mockup, the Global EIR Peer Network has one-time legal fees of approximately $10,000 per founder, ongoing annual costs of approximately $12,000 per founder, and a full-time program manager. We estimate total salary and benefits to be approximately $80,000. . Extrapolating these estimates, a small program that sponsors 20 entrepreneurs can be built with annual operating costs between his $500,000 and his $700,000. Compare this to his average public cost per case of more than $100,000 with typical company-specific development incentives.

Global EIR programs can serve as an integral part of technology clusters in states and cities across the country, at scale and with vision and some entrepreneurial spirit from local leaders themselves.

More states are funding Global Entrepreneur-in-Residence programs.

As USCIS further clarifies the use of the H-1B for entrepreneurs, it recognizes the power of models like GEIR to build new technology hub ecosystems and provides funding for such programs locally. An increasing number of states are considering offering it.

New York state became the latest last month, with five states now approving funding for their state's GEIR programs. Earlier this year, the state of Washington also approved $300,000 to pilot an entrepreneurship training program at the University of Washington. This program sponsors graduate and graduate students at California State University.

New Jersey Governor Phil Murphy also proposed a new AI-focused GEIR program for the state in his latest budget request. Governor Murphy asked lawmakers for $500,000 to pilot the AI ​​GEIR program, which encourages promising international students to bring their talents to New Jersey after graduation.

In 2014, Massachusetts allocated $3 million to a global EIR program in the Boston area under the University of Massachusetts Boston Venture Development Center. Today, his dozens of VDC-backed GEIR participants have created more than 1,600 jobs for him, attracted more than $1 billion in investment, and delivered an incredible return on investment for economic development spending. .

Over the past two budget years, Michigan has received funding for global EIR efforts across multiple university campuses in the state, including the College of Creative Studies, Grand Valley State University, Lawrence Technological University, Michigan Technological University, and Wayne State University. , awarded two $1 million grants to Global Detroit. This is part of the larger Michigan Global Talent Initiative, for which he has been allocated $10 million so far.

Last year, California committed $2 million to establish a global EIR program run by the University of California System.

Finally, in Utah, Governor Spencer Cox proposed a Global Talent Accelerator program that would support part-time opportunities for foreign graduates pursuing entrepreneurship. However, the state Legislature failed to appropriate the proposed $250,000 in state funds.

Cities and universities can operate without state funding or permission.

Only a handful of states have funded or are considering funding new global EIR programs, but the good news is that cities and universities can start and fund these programs themselves. . While state funding provides additional visibility and centralized coordination, a permit is not required for communities to take full advantage of this economic development tool.

Currently, some city organizations exist independently of state-level programs. As an example, Global Cleveland is an organization that works on various immigration initiatives in the city, including the Global EIR program. One of the entrepreneurs, Aaron George, was able to stay in Cleveland after graduating from Case Western University to found his AI company, SupplyNow, which currently operates in multiple states.

Please note that the list of states and cities with GEIR programs is likely not comprehensive for two reasons. First, the global EIR is not a formal pathway. Rather, it is the name of a nonprofit network that popularized the concept of strategically using universities' cap-exempt H-1B status to retain local entrepreneurs. Cities and states can create their own such programs. Second, there is no data from the Department of Homeland Security on the number of entrepreneurs using this route to secure H-1B visas. Perhaps some people have had success using this route on their own.

conclusion

State and local leaders have few tools to help more promising young entrepreneurs stay and build businesses in the United States. The Global Entrepreneur-in-Residence model is an imperfect tool. The US still requires a startup visa. Nevertheless, global EIR is an underutilized resource that communities can use to retain top talent, anchor new hub initiatives across the country, and sow the seeds of future economic growth at very little cost. It's not a powerful tool.

Sources

1/ https://Google.com/

2/ https://eig.org/geir-programs/

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