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Stop Exporting Future Job Creators on U.S. Campuses

Few issues cause as much heartburn on both sides of the political aisle as immigration. It induces uneasiness over America’s education system (over half of science and engineering doctorates are earned by foreign students), paranoia about cultural heritage, fears about fiscal bankruptcy and worries over unemployment—all caught together inside electoral politics and demographic projections. The only upshot besides acrimony is deadlock on reform of America’s increasingly anachronistic immigration laws. This is madness. Migration across borders is an essential lubricant to economic growth and one group of migrants is particularly important: entrepreneurs. Mounting research has established the importance of immigrant entrepreneurs to the U.S. economy, both historically and in recent years, yet the United States continues to turn away people who want to enter the country and create companies and jobs. Read that again: people from other countries are volunteering to start new companies that will create new American jobs. And we say, “No, thank you.” The sufferings of persistently high unemployment—with a disturbing level of long-term unemployment—are apparently not enough of a spur to policymakers to make changes. To be fair, a few politicians from both parties are standing athwart this self-inflicted madness yelling stop. The Startup Act (version 2.0) of which was recently introduced in the House and Senate) helps address this problem by easing entry for immigrants with graduate-level degrees in science, technology, engineering or math (STEM). Skill and entrepreneurial potential, however, are not confined to people with graduate degrees. A new Kauffman Foundation paper sheds light on an oft-ignored corner of immigration: foreign undergraduate students, in any area of principal study, who attempt to start a business. The paper, written by three professors (two law, one business) at the University of Missouri-Kansas City(UMKC), points out something which few people likely know. Undergraduate students from other countries who study in the United States on an F-1 visa are generally prohibited from holding jobs off-campus, “unless that employment has been authorized as part of the student’s educational pursuits and is deemed necessary practical training,” and meets the regulatory requirements for  “Curricular Practical Training” (CPT). The problem is twofold. First, current interpretations of applicable regulations preclude CPT approval of a foreign student’s active participation in a startup, as opposed to working as an employee of an established business. Second, entrepreneurship is not always a linear pursuit following directly from one’s field of study—if an art student involved in an entrepreneurship program wants to join a software startup, it likely won’t be authorized because the startup is not part of the student’s artistic studies. (The student also wouldn’t meet the disciplinary requirements of the Startup Act, which focuses on STEM fields.) Similarly, even when self-employment in a startup becomes a more viable option under interpretations of the Optional Practical Training (OPT) rules, which can extend post-graduation, recent lengthening of the OPT allowable time period also has been confined to STEM disciplines. Current immigration law does allow for foreign entrepreneurs to enter the United States and establish their business, but this entry route is generally tied to minimum investment thresholds. The Startup Act provisions would also tie a new entrepreneur’s visa to financial requirements—raising or investing $100,000. It should go without saying that very few college students, especially undergraduate students, will meet such thresholds, including raising outside money for a new venture. There are hopeful routes out of this mess, and the paper makes several clear-headed suggestions for how to get there. Some reform requires Congressional action; other changes need only slight modification or different interpretation by federal agencies. Entrepreneurs often complain that U.S. Citizenship & Immigration Services (USCIS) has an inherent bias against small companies in H-1B adjudications, for example—Malcolm Goeschl has done some of the best work on this problem. It’s true, however, that USCIS has become more vocal in its support of immigrant entrepreneurs, even establishing anEntrepreneurs in Residence initiative. But some of the problem may also be at the college and university levels, where conservatism is the rule in interpreting federal immigration law—even if something like Curricular Practical Training could be reasonably interpreted to permit student entrepreneurship, institutions shy away from such an interpretation. This is understandable, of course, but underscores the urgent need for administrative clarification or even direct guidance that entrepreneurship is an encouraged pursuit. Officials in Congress and federal agencies often gravitate toward major changes (new visas, new initiatives) that they say will cut through the Gordian knot. The urge to pass new laws obscures what can already be done within existing law to remove obstacles. This excellent paper proves that sometimes the smallest changes can have the largest impact. In this case, while foreign student entrepreneurs may not seem like the solution to America’s labor market troubles, America’s unemployed—especially its unemployed youth—probably wouldn’t turn away these potential job creators. Source: Dane Stangler, Contributor Date: 10th August 2012 Link: http://www.forbes.com/sites/kauffman/2012/08/10/stop-exporting-future-job-creators-on-u-s-campuses/

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