Half of U.S. unicorns founded by immigrants

SpaceX founder Elon Musk is a native of South Africa.

Immigrants launched more than half of U.S.-based startups valued at $1 billion or more according to a new study by the non-partisan National Foundation for American Policy.

The 44 companies are collectively valued at $168 billion and have created an average 750 U.S. jobs each, according to the study. Immigrants also make up more than 70 percent of key management and product development positions at the companies.

The three highest-valued unicorns with immigrant founders include car-hailing service Uber Technologies, software maker Palantir Technologies and SpaceX, the rocket manufacturer founded by South African Elon Musk.

Foreign-born founders most often hailed from India (14), followed by Canada and the U.K. (8), Israel (7) and Germany (4). Three originated from China, two from France and two from Ireland, with another dozen countries with one.

The study comes amid calls by Republican presidential candidates Donald Trump and Sen. Ted Cruz to limit the H-1B visa program, which allows skilled foreign workers stay in the country.

However, Stuart Anderson, the study’s author and the foundation’s executive director, said the findings suggest that the U.S. economy could benefit from the talents of foreign-born entrepreneurs even more so if it were easier for them to obtain visas.

Technology leaders like Facebook founder Mark Zuckerberg and Microsoft’s Bill Gates have called for increasing the number of H-1B visas granted annually, arguing that current levels make it difficult for companies to hire foreign-born workers and for foreign-born entrepreneurs to start businesses here.

The visas are currently capped at 85,000 per year, with 65,000 are set aside for foreign workers and 20,000 for foreign students graduating from American universities. The U.S. Citizenship and Immigration Services received more than 230,000 applications during last year’s filing period and reached the 85,000 limit in one week.

The EB-JOBS Act of 2015, introduced last July, has failed to advance due to Washington gridlock on immigration. The act would provide entrepreneurs with a two-year green card that could be revoked if financial and job-creation requirements aren’t met. The Ewing Marion Kauffman Foundation, which funded the NFAP study, estimates the act would create 1 million to 3.2 million jobs over 10 years.

1 Comment on "Half of U.S. unicorns founded by immigrants"

  1. Perturbed Pundit | March 27, 2016 at 7:57 AM |

    NFAP’s study confirms what many have been saying for a long time: The H-1Bs are generally NOT the best and the brightest, and the nation would benefit by changing the visa program to focus on the outstanding talents. NFAP’s findings, in other words, show exactly what is WRONG with H-1B and various proposals to reform it. Consider:
    NFAP finds that immigrants are founders (OR cofounders, a point I’ll come back to) of 51% of the billion-dollar startups. Yet immigrants form more than 51% of Silicon Valley techies, so once again we see that the immigrants are UNDER-performing.
    Among those immigrant founders, 14 (out of 44) are from India, 32%. Yet Indians form 70% of the H-1Bs. So the Indians are under-performing too. Most of the founders are from countries from which we have rather few H-1Bs, such as Western Europe, Canada and Israel.
    Only 1/4 of the immigrant founders came to the U.S. as foreign students, counter to the industry’s claim that foreign students are the best of the H-1Bs.
    Of those with U.S. degrees, most are from the really top schools, such as MIT and Stanford — quite a contrast to the Staple a Green Card proposals, which would give an automatic green card to any foreign STEM graduate student, no matter how weak the school is.
    As usual in these “studies,” anyone born abroad is considered an immigrant, such as an example NFAP cites, Kenneth Lin of Credit Karma. Lin immigrated to the U.S. with his parents at age 4, hardly the poster boy for the H-1B work visa program that NFAP implies. Others on NFAP’s list cofounded their firms with Americans, yet he gives them full credit.

    Before H-1B, we had the old H-1 visa, titled “Aliens of Distinguished Merit and Ability,” basically the “best and brightest” theme. That did deteriorate over the years, so that anyone with a college degree because “distinguished,” but it certainly had the right intent. NFAP’s study shows that H-1B doesn’t fulfill that intent at all.

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