U.S. Economic Woes: Entrepreneurs to the Rescue!

As the European debt crisis deepens and U.S. markets continue their roller-coaster ride following the debt-ceiling debacle and the debt-rating downgrade, Washington policymakers are on the lookout for ways to stimulate a slumping economy. It’s about time. Throughout the debt-ceiling standoff, many Americans wondered aloud about Washington’s apparent lack of interest in what they view as a far more immediate and pressing need – the need for jobs.

One solution to this problem is to stimulate entrepreneurship and small business growth. According to a recent article in USA Today, columnist Steve Strauss noted that small businesses employ more than half of all workers in the U.S., and are responsible for 80% of the new jobs created here. (See: Why Only Small Business Can Save America, by Steve Strauss, USA Today, 08.Aug.2011.) Strauss notes that of the 20 million new jobs created during the boom years of the Clinton era, many of these were created by startups that are now household names, employing thousands of people – think Starbucks and Amazon.com.

To get more of this job-creating activity, Strauss argues, governments need to create a hospitable business climate that will help entrepreneurship to flourish. He recommends the government take steps to:

  • “Reform regulations: To promote a truly entrepreneurship-centered business climate, reform tax and regulatory environments so as to make it easier, faster, and less costly for entrepreneurs to set up enterprises.
  • “Create Entrepreneur-Friendly Institutions: Introduce entrepreneurship-friendly support institutions that provide technical knowledge, market information, business know-how, certification services, access to capital, and other essential business support.
  • “Understand Entrepreneurship: Make it known that entrepreneurs are positive agents of social change, wealth creation, transparency, sustainability, and innovation.”

Notably, Strauss also calls for immigration reform as a key part of this strategy, “so we can again attract the best and brightest entrepreneurs and engineers to our country.” This call was echoed in a recent interview with former Fed chairman, Alan Greenspan, who spoke of the need to bring more skilled immigrants to the United States to keep our economy productive. Greenspan told The Globalist, “My view is that we should give a green card to every immigrant who gets an advanced degree in the United States.” (See Globalist Interview with Alan Greenspan: Should Jobs Matter in the U.S. Trade Debate? by Alan Greenspan, The Globalist, 07.Jul.2011.) Greenspan did not address entrepreneurship, but made it clear that he strongly favors a loosening of immigration restrictions to allow more highly-skilled immigrants and H1Bs to work here and boost our economy.

A month or so later – not quite on cue – USCIS Director Alejandro Mayorkas and Homeland Security chief, Janet Napolitano, announced a series of policy changes designed to attract more highly-skilled immigrant entrepreneurs to the United States. (See Secretary Napolitano Announces Initiatives to Promote Startup Enterprises and Spur Job Creation, Press Release, U.S. Department of Homeland Security, 02.Aug.2011.) Under the new policies, entrepreneurs will have a broader array of options for coming here to start businesses.

For instance, sole proprietors of startup companies will now be able to establish the employer-employee relationship necessary to qualify for an H1B nonimmigrant visa – with the opportunity to apply for a green card thereafter. (As we noted on MurthyDotCom, “a business owner can establish an ’employer-employee relationship’ by showing that the company has a separate board of directors with power over the owner-investor.” (See USCIS Announcement to Encourage Entrepreneurs to the U.S., MurthyDotCom, 04.Aug.2011.) The USCIS also will take a more lenient approach to green card applications submitted by entrepreneurs who qualify for EB2 visas, either as persons of Exceptional Ability, or persons whose business activities will serve the national interest, as a National Interest Waiver (NIW) case. In addition, the USCIS is taking steps to streamline the EB5 investor-based visa program, and implementing a listening campaign to find out what entrepreneurs and startup companies need most from the agency.

As we have noted in previous postings, immigrant entrepreneurship has long been a powerful engine of economic growth in this country; many of today’s leading companies – especially in future-oriented high-tech industries – were founded by immigrants: one thinks of Google, Intel, eBay, and other giants of the internet age. We are pleased to see USCIS and DHS taking concerted action to make our country more welcoming to immigrant entrepreneurs. These are very positive steps, which we hope will lead to additional reforms at the political level – such as raising the cap on H1Bs, automatically granting green cards to foreign STEM grads, and so on. It’s up to Congress to pick up the baton and run with it.

Disclaimer: The information provided here is of a general nature and may not apply to any specific or particular circumstance. It is not to be construed as legal advice nor presumed indefinitely up to date.