According to Senator Jerry Moran (R-KS), “New business formation and the rate of entrepreneurship have reached historic lows.” The U.S. lags behind other countries in entrepreneurship and is losing foreign talent overseas to nations with more amicable immigration policies.
The Ewing Marion Kauffman Foundation Startup Activity Index found that the rate of new entrepreneurs in the U.S. decreased in 2016 to 0.31 percent (from 0.33 percent,) or 310 out of every 100,000 adults starting new businesses each month. “The number of new businesses being created in this country is lower than it’s been in decades,” said Senator Blunt. “The Startup Act will make it easier for entrepreneurs to start and grow their businesses, resulting in more good-paying American jobs.” The bill will also increase U.S. competitiveness and ensure STEM professions have the workers they need.
Analysis supports the creation of an entrepreneurial visa. Former President Barack Obama made strides towards this with the International Entrepreneurial Rule which was rescinded by the current administration. Today there is the Startup Act, a bipartisan legislation reintroduced by Senators Jerry Moran (R-KS) and Mark Warner (D-VA). The original Startup Act was introduced by Moran in 2011, then reintroduced in 2013 and once again in 2015.
The Startup Act is touted as a bipartisan bill to “encourage creation and growth of new businesses”. Senate Moran’s website states:
“The Startup Act, S.1877, would accelerate the commercialization of university research that can lead to new ventures, review and improve the regulatory processes at the federal, state and local levels and modernize a critical Economic Development Administration (EDA) program to promote innovation and spur economic growth. The legislation also creates both Entrepreneur and STEM visas for highly educated individuals, so they can remain in the United States legally to promote new ideas, fuel economic growth and create good-paying American jobs.”
The startup act would create 75,000 entrepreneurial visas so that immigrants can remain in the United States, launch businesses and create jobs. In addition, it would create 50,000 STEM visas for U.S. educated foreign nationals who graduate with a master’s or Ph.D. in science, technology, engineering or mathematics. The visas will allow them to obtain a green card and stay in the U.S. where their talent can create economic growth and create American jobs.
Each year, Fortune Magazine dedicates an issue to the 500 largest American companies by revenue. These are known as the Fortune 500. The Center for American Entrepreneurship (CAE) analyzed the Fortune 500 for 2017 and found that 43 percent of these companies were founded or co-founded by an immigrant or a child of an immigrant.
Throughout time, 40% of Fortune 500 companies have been founded by immigrants. This is remarkable given that, on average, immigrants have made up only 10.5% of the US population since 1850. In addition, new Fortune 500 companies are more likely to have an immigrant founder.
Immigrant-founded Fortune 500 firms are headquartered in 33 of the 50 states, employ 12.8 million people worldwide, and accounted for $5.3 trillion in global revenue in 2016. Immigrant founded Fortune 500 companies employ more than 10 million people across the globe, and their annual revenue is greater than the GDP of any country in the world except Japan and China.
The Startup Act present new opportunity to widen the scope of those participating in our economy. Too many have been left out of our economy. There’s a connection between the long-term decline in entrepreneurship and the effect on productivity, growth and wages,” said Jason Wiens, director of policy, Ewing Marion Kauffman Foundation.
According to the Kauffmann website, the Startup Act would:
• “Welcome immigrants capable of building high-growth companies to the United States by providing “Entrepreneurs’ visas” and green cards for those with degrees in science, technology, engineering and math.
• Provide new firms with better access to early-stage financing, creating capital gains tax exemptions for long-held startup investments, providing tax incentives for startup operating capital, facilitating access to public markets, and allowing shareholders of companies with market cap below $1 billion to opt-in under the Sarbanes-Oxley Act.
• Accelerate the formation and commercialization of new ideas by creating differential patent fees to reduce the patent backlog and providing licensing freedom for academic innovators.
• Remove barriers to the formation and growth of businesses through the introduction of automatic ten-year sunsets for all major rules, establishing common-sense and cost-effective standards for regulations, and making assessments of state and local startup and business policies.”
Job creation, economic growth, and innovation are nonpartisan issues. The Startup Act cites that between the tears of 1980 and 2005, companies less than five years old accounted for nearly all net job creation in the United States. The Startup Act offers comprehensive legislation to assist foreign national and American-born entrepreneurs in starting businesses while creating jobs and producing valuable revenue for the economy.