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.