The American Enterprise Institute’s book forum titled “Better
Capitalism: Reviving America’s Entrepreneurial Engine” today featured
Robert E. Litan and Carl J. Schramm, the authors of the book “Better
Capitalism: Renewing the Entrepreneurial Strength of the American
Economy.” One of the issues
discussed was the need to revamp immigration policies for highly skilled
immigrants.
As part of a broader discussion on the importance of
entrepreneurship to economic growth, the authors pointed out the need for more
high-skilled visas. Dr. Litan
described the need for a much heavier dose of entrepreneurship in the U.S.
economy in order to accelerate growth, and that one part of the solution was
more skilled visas, including entrepreneur visas as well as visas for STEM
graduates.
Dr. Litan characterized the U.S. as being in an
entrepreneurial recession due to a high level of risk aversion. Dr. Schramm noted that high
unemployment meant higher stakes for entrepreneurship. In this context, highly skilled
immigrants are already risk takers in coming to the U.S. and have less to lose,
as they are not yet established in this country. Dr. Litan stated that the U.S. economy needs an
entrepreneurial kick in the butt, and immigrants (who have started or co-founded
one quarter of startups) could provide that boost.
Dr. Litan also discussed how interest groups can paralyze an
economy in favor of established firms, impeding Schumpeter’s creative
destruction, and how entrepreneurs can break through that paralysis. If immigration plays a role, through entrepreneurship,
in the periodic renewal and revitalization of the U.S. economy, then it is
indeed imperative that we reform immigration policies that prevent the very
dynamism that has historically set us apart in our economic success.
As discussed in a
previous blog post, there exists bipartisan consensus on the need for more
STEM visas. On the issue of
entrepreneur visas, the STARTUP Act 2.0 also has bipartisan support in both the
House and Senate. In this week’s
presidential debate, both candidates expressed support for skilled
immigration. Congress needs to
take swift action on high-skilled immigration reform in order to realize the
goals of job creation, global competitiveness, and long-term economic
growth.
