Startup Act 3.0 is the only jobs and high-skilled immigration proposal in Congress that creates the Entrepreneur Visa
Feb 27 2013
WASHINGTON, D.C. – The Entrepreneur Visa created by Startup Act 3.0 has the potential to add, conservatively, between 500,000 and 1.6 million new jobs for Americans over the next 10 years according to a white paper released today by the Ewing Marion Kauffman Foundation. At a time when the Congressional Budget Office expects unemployment to remain above 7.5 percent through 2014 and the economy to grow by just 1.4 percent this year, the job creation potential of Startup Act 3.0’s Entrepreneur Visa translates to an additional 1.6 percent increase in GDP, or about $224 billion in economic activity.
Startup Act 3.0 is the strongest, most comprehensive jobs and high-skilled immigration reform bill on the table in Congress and the only proposal that creates the Entrepreneur Visa. It was recently re-introduced in the 113th Congress by U.S. Senators Jerry Moran (R-Kan.) and Mark Warner (D-Va.), along with Chris Coons (D-Del.) and Roy Blunt (R-Mo.).
“The businesses high-skilled immigrants create are a source of jobs for Americans, but at a time when our economy needs jobs first and foremost, our archaic visa policies have America falling behind,” Sen. Moran said. “We are losing jobs and talent by the day to countries like Canada, Chile and the United Kingdom that have realized entrepreneurs have been the secret to America’s economic success and have changed their visa policies to aggressively court these job creators. Startup Act 3.0 would create jobs for Americans by keeping highly-skilled and entrepreneurial immigrants in the United States where their talent and new ideas can fuel economic growth. We don’t have the luxury of time – if Congress fails to act, we will lose the next generation of great entrepreneurs and the jobs they create.”
“There’s hope that 2013 finally may be the year the United States implements comprehensive immigration reform,” said Dane Stangler, director of research and policy at the Kauffman Foundation. “However, that legislation would fall short if it fails to create a new visa for the thousands of potential foreign-born entrepreneurs who are already in the country, particularly those who are likely to start technology and engineering firms. Increasing their numbers would accelerate U.S. economic and job growth and help offset the steadily declining numbers of native entrepreneurs.”
The Kauffman Foundation report, “Give Me Your Entrepreneurs, Your Innovators: Estimating the Employment Impact of a Startup Visa,” looks at the economic impact of the Entrepreneur Visa (referred to as the Startup Visa in the study) included in Startup Act 3.0. The visa would be available to a fixed pool of 75,000 foreign-born individuals who already hold H-1B visas or F-1 student visas and who start companies in the United States. In the first year of business, these entrepreneurs would be required to employ at least two full-time, non-family workers and to invest or raise an investment of $100,000 or more.
Using the most recent data from the U.S. Census Bureau Business Dynamics Statistics (BDS), the study’s authors evaluated the Entrepreneur Visa’s job creation potential under three possible scenarios. Assuming that, if Entrepreneur Visas were available in 2014, 75,000 would be filled, BDS statistics indicate that, after four years, 37,108 firms would still be operating. The openings created by failed companies over the previous three years would have been filled by new Entrepreneur Visa applicants.
After 10 years, nearly 100,000 companies will have reached four years and aged out of the visa program. New companies also would have been added over the 10-year period, growing the denominator of new firms by more than the number of available visas.
Under the first two scenarios, the report demonstrates that companies founded by Entrepreneur Visa holders would create between 500,000 and 889,000 jobs, contributing to a 0.5 percent to almost 1 percent jump in GDP, respectively.
The third scenario assumes that half of the four-year-old firms would be technology and engineering firms established by H-1B holders, who typically are employed in science, technology and engineering. Previous research has shown that immigrant-founded technology and engineering startups employ an average of 21.37 people per firm.
This scenario would create, at minimum, 1.6 million jobs over 10 years, or 1.6 percent of GDP, among companies that age out of the Entrepreneur Visa program. Adding job counts from younger companies established as new visa slots open and jobs created after Entrepreneur Visa companies age out of the program could raise these estimates considerably.
A National Foundation for American Policy analysis of the top 50 venture-capital-backed companies in 2011 revealed that 24 were founded or co-founded by immigrants. At an average company age of 5.8 years and 153 employees, this small sample of immigrant-founded companies added 27 new employees per year, indicating the potential such companies – or even a sliver of Entrepreneur Visa companies – have for extraordinary job creation in the United States.
To access the full survey report, visit www.kauffman.org/startupvisa, and follow the conversation on Twitter #StartupVisa and #StartupAct.
Click here to read a one-pager on Why Startup Act 3.0 Matters.
Click here to visit the Startup Act 3.0 website.
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- Startup Act 3.0 Infographic - Employment Impact of an Entrepreneur Visa - (130.7 KBs)