Yeah just so that people don't feel
like they've been lured here under false

pretenses the results that I'm going
to share with you are very preliminary.

And I guess for the purpose of
the Internet public out there

not ready to be quoted in
you'll see actually we're still

cleaning up the data in improving it so a
lot of the talk is going to be presenting

the context for this project a range
of policy issues that it bears on and

I think the next slide is a an outline and

the the data that I present
will come at the end and

I think yes a number of people
have to leave around noon so

I'll try to you know finish up between
eleven thirty and eleven forty.

So I may actually skip a couple of chunks
here if the time gets short but I'll make

sure that I have some time at the end to
share you with you with this project.

This is a survey research project in which
the unit of analysis is the firm and.

Its reason I don't have more firm results
to share with you have to do with the leis

both with the approval of the survey
instrument anybody who gets federal

support for a survey actually has to be
approved by the Office of Management and

Budget and apparently they have a better
things to do which I don't quite

understand that but so are despite
the fact that there is a technically

a deadline for approving these kinds
of projects ours sat in the management

of the Management Budget for a while and
then the service center also.

Was not as quick as we would like which
I personally is par for the course.

So anyway I have some
preliminary results to share and

I'll do that in the last ten or
fifteen minutes but in the meantime let me

explain how we got into this project and
why we think it's interesting.

So the first point is that there is a link
between entrepreneurship and growth and

there are a number of steps to this
argument and I really compress them

here but basically unless you believe that
existing businesses are more or less on

mission with respect to opportunities
there is a place for entrepreneurs to see.

Opportunities to innovate technologically
to innovate in terms of products

to innovate in terms of markets that
exhibit existing businesses either

either don't recognize because of
some kind of perceptual blinders or

that upper management blocks in
this is a classic story of so

many of you who have studied
large organizations will know and

then once entrepreneurs' get into
the picture then it's often the case that

existing business is move into high gear
and this is a kind of acceleration of

the growth process that results from
entrepreneurship even if the entrepreneurs

are ultimately killed off by
the I.B.M.'s and those kinds of firms.

And so
this is an emerging field of research and

one of my colleagues in
this project doesn't

been one of the leaders saw share with
you some of his previous results.

This is from a study that he did
looking at regional data and

it's a little confusing but they says this
is basically the elasticity of employment

to new business start ups in I should say
entrepreneurship year is defined rather

narrowly just in terms of
new business startups so

we're not talking about policy
entrepreneurship social entrepreneurship

all those other kinds of entrepreneurship
that are you know maybe well be valid for

their own sake but don't come into the
picture for economic growth directly and

what this picture shows is
that there's about a two and

a half percent response for
each one percent change in new business

start ups at the regional level and then
it also shows that over time actually.

These effects persist somewhat and
in fact there's I think

a somewhat unexplained bump up five years
after this rise in entrepreneurship.

Actually in increase in
the employment response.

So there is some connection
between them entrepreneurship and

growth viewed at the regional level and

then we have some national data this is
from the Global Entrepreneurship monitor

which is a forty nation I think it's forty
nations now study survey study where they

ask people Are you involved in
starting a new business and so T A.

It's called the Total Total
entrepreneurship.

I can run a stance for basically an index
of the percentage of the population that's

involved in starting a business and so
there is some positive can see that if you

fit a line to this there would be a
positive correlation between these things.

Now there's a lot of remaining
holes to be filled here and

I don't claim that this relationship
is ironclad but there are some good

theoretical reasons as well as some
supporting your empirical evidence to

suggest that there is a connection
between entrepreneurship and growth.

And then he has done more detailed work
looking specifically at the US and

one of the emerging arguments in the field
this it's not all startups that contribute

to the growth but it turns out that just
a small number of startups provide most of

the growth in a prior directly
prior project to this

one that I'm working on now he and
his colleagues show that basically all

the growth in the US in the in the period
between one thousand nine hundred four and

two thousand and six could be attributed
to a small number of firms about about

three hundred thousand to four
hundred thousand firms and

these are firms that are identified
by their growth rate.

So these are firms that doubled in
employment and doubled in revenue in

a four year period so that's that's how
they're found in this is starting for

those of you who are really
expert in this field.

This is from Dun and Bradstreet data so
that's the original data source just to.

You don't have to go into all these
numbers here but in these for

your peers you can see that these
three hundred thousand firms or so

are accounting for ten million plus jobs.

And these are trillions of dollars.

So one or two around two trillion dollars
So basically providing all the growth in

the economy from a small number of firms
again it's an emerging argument I would

say it's ironclad but I think the evidence
is is building that there's only a small

number of firms and Zoltan has
labeled these high impact firms that

are the most directly
connected to the growth.

Now there is a wrinkle in it and one of
the things that they found in this study

was actually not all
these firms are startups.

It turns out that there are.

Some pretty old firms actually in this
group and not all of them are high tech.

So to some extent this project that I'm
working on is a little bit captive of

the old thinking that we're especially
interested in high tech and as I point out

here there are some reasons to think that
high tech is especially interesting.

But there are also interesting interesting
issues that emerge out of the fact that

some of these firms are pretty old and
they're scattered across the economy.

Nonetheless for this project we're just
going to focused on a few sectors that

are considered to be high tech.

OK All right.

So that's entrepreneurship and
growth now immigrant immigrants and

entrepreneurship why should we care
about whether immigrants are involved in

these entrepreneurial firms and so

there are some theoretical reasons to
think that immigrants are more prone to be

entrepreneurs than native born citizens or
native born residence for

instance or is this notion that
immigrants are self selected whether or

not they have the educational background
the fact that they've made this journey

across the ocean or across the border
suggest that maybe they are more

risk taking that they're harder working
possibly you so these are the kind of

classic stories that we hear in American
history about entrepreneurs from abroad.

There is the notion that immigrants may be
blocked in their career advancement they

may move into entrepreneurial pursuits
because they can't rise up in their

existing businesses the most interesting
one is the third one the one that I'm most

interested in is the idea that immigrants
may actually see different opportunities

than the native born perhaps they have
connections to their home country that

allows them to recognize markets or see
supply opportunities that are different.

So those are arguments that would suggest
that their propensity to be entrepreneurs

is higher among immigrants
than among native born.

However there's also the argument that
immigrants are not as able to mobilize

the resources that they
need to start businesses so

that one can go either way
it's an empirical question.

So here this is data from work
by Robert fairly and he uses.

Thing called the Current Population Survey
to collect these data and I won't go into

the details here but what it shows in
this green box shows you the difference.

The immigrant share of new business
foundings is about a third higher than

the US born.

OK And this is a huge data set
is like five hundred thousand.

Firms that are started
every month in the country.

I was in Korea recently so
this is where the caviar comes and

I did present this material in Korea
wants but I wanted to show them

the Korean Americans have the highest
Korean immigrants have the highest rate.

These are the top ten sources of
foreign born population in the U.S..

Now these are very different.

This is a different population
than the one I'm studying but

nonetheless it's indicative that there may
be this relationship between immigrant

immigrant status and entrepreneurship.

By state again as you would expect the
immigrants are not randomly distributed

across the country but they concentrate
in certain states including Georgia so

George is actually number five in fairly
This study of the share of new businesses

that are started by immigrants California
as you would expect at the top about

a third of all businesses in California
are started by foreign born residents.

Now that's all businesses and
in fact most of these businesses are so

often point that is there's
no employees in in about two

thirds of all the businesses in
the country are have no employees.

Only the owner is employed.

So now we want to link it to high tech
in this is where real inspiration for

this project was work by the way
an illustrious alumnus of

our department at MIT and she has done
work some of you may know at that links

Silicon Valley to high tech hot
spots in Taiwan in China in India.

And she also in that project did some
work on Silicon Valley itself to

show that a fraction large fraction
of firms started in Silicon Valley

were founded by immigrants.

She has the number twenty five percent.

There are some issues with
how that's measured in fact.

Of one of the motivations for this project
is to get a better measurement process for

this figure and you can see that there
are various other studies with different

kinds of populations different
kinds of measurements

that come out in the same range you
would expect Silicon Valley to be

on the high end in fact what was more
recent study of Silicon Valley he comes

up with the number over fifty percent
of the firms there are founded by

immigrants the number of
immigrants in the US is rising.

So we would expect these numbers
to rise over time but nobody has

studied the population that's of most
importance at least from the growth point

of view which are these firms that account
for all the growth in the economy and

as I said there are some methodological
issues with all these studies so

we're trying to improve on that different
population different approach to

the measurement and
then the most interesting question is this

one about opportunities do these
entrepreneurs just do things that natives

would otherwise do or or
are they adding something new and so

I use these images to kind of dramatize
that is the immigrant the Albert Einstein

you know that nobody in the United States
would ever have done what he did or

in this is taken from
an anti immigrant website.

Some of you probably
familiar with the H one B.

visas so
these folks are seeing arguing that.

That immigrants from presumably India or
somewhere in Indian

sub continent are crowding out
American computer programmers.

So which is it here and that's one
of the questions in our study which

I can't really shed light on with
the results that we have but

we want to explore that question.

All right.

So that's all the theoretical kind of from
the scar lease point of view motivation.

Now what about immigration.

Fortunately in my class on migration This
semester I have a student who works for

the Gallup poll this is one of the joys
of working in Washington we have students

who do some interesting things and so
he presented a some of their data to us

the other night at in the lecture and
I've just brought them directly into

the presentation this is American public
opinion on immigration the light gray.

In line is the number of people who think
that immigrants should be immigration

should be kept at should be decreased and
you can see that and this is true.

Pretty much around the world.

Most people think that immigration
should be decreased but

actually it's it's becoming a slightly
more popular this line is to keep it at

present level eighteen percent
has actually increased So

immigration is not particularly
popular even though the United States

likes to think of itself
as a country of immigrants.

A similar kind of question but
different result is that a good thing or

a bad thing in the speech to
the question of crowding out.

Actually most people think that
immigration is a good thing you know there

are questions about how you
phrase these these surveys.

So you know the American public
is kind of divided depends on how

you ask the question in
how you think about it.

What is our immigration
actually look like.

We have about a million people
that become permanent residents or

citizens every year.

This is two million number
is not actually people but

admissions because of the way
our statistics are kept.

But used.

Think of these as orders of magnitude
another million students or something

in that range six hundred thousand seven
hundred thousand actual individuals and

then perhaps five hundred thousand
of those Recent reports suggest that

the number of unauthorized
entries are declining in and

in fact the Homeland Security Department
today took credit for

this although I think there's some
evidence that it's the economic situation

that is accounting where in any
case that's the big picture.

Of the people who come here permanently.

The main point of this graph is to show
that it's vastly accounted the vast

majority of them are family relations.

So the big the big slice here
are immediate family members and

then the yellow slices people who are
slightly more distant married children and

grandparents those kinds of things so
about two thirds to three fourths of our

immigration flow comes from family
unification not a skills oriented program.

Policy and that's the key point here.

So of those things that
are oriented toward skill.

About one hundred forty
thousand are allowed and

in order to come here you have
to be sponsored by an employer.

There are various issues with that

process as some of you may
know all too personally.

It's a difficult process and there are big
backlogs for certain countries but

there is there is a program in place
too to bring in people on the basis

of their of their skills a much
bigger number of people come in for

temporary purposes either to work in
universities or work in companies and

there are a lot of different visas
the H one the G J one the F one and so

on and a lot of these people adjust this
is the language of this is immigration

speak this means that they move from one
status to another so they come in and as

the term permanent as a temporary person
but they become a permanent immigrant.

But there's no real system for doing that.

Whereas some other countries are trying
to put in place a kind of pipeline

becomes a student get a temporary
visa if you stay you work out with

your employer then you can stay for good.

The U.S. doesn't quite It has implicitly
but doesn't have it explosively.

Similarly with the with the students.

So there are a variety of options on
the table if you believe this story

about immigrant immigrant entrepreneurship
or immigrants contribution to.

U.S. technology variety of options
on the table that would expand that

slice of the pie that's brought
here on the basis of skills and

perhaps in this is where
the fight comes in.

Perhaps reduce the share that comes
on the basis of family preference but

there is a big battle as some of you
surely know about immigration in

Perhaps you could raise the total
number in allocated to the high skill.

Migrants but it's not clear that that's
going to happen anytime soon but

nonetheless this study that we're doing is
meant to contribute to this policy debate.

And the context here is as I mentioned
other countries that are are really

focusing more and more on skills.

I just have a few examples here is as
Danny mentioned I've been working in

Hong Kong Hong Kong has a series of
programs where they're trying to attract

highly skilled students professionals
especially from China the U.K.

has now introduced a so-called point
system which have these are programs where

individuals can apply and
if you have certain qualifications

different kind of degree professional
experience language skills then you would

be able to enter as an individual
without sponsorship from an employer.

So so as the U.S.
thinks about its position in this.

High skill migration area.

We have to recognize that countries
are trying hard to attract this talent and

of course the source countries are also
trying to retain their talent at home and

some have been quite successful in that.

All right so I wanted to just touch
briefly on the international implications

of these flows of high skilled migration
and I'll just say a word about it but

there's a connection an emerging
discourse about migration and

development which which this
work can also contribute to so

it's built around has historically been
built around the notion of brain drain and

this just ranks countries
according to their income and

you can see of those
people who are moving.

They're more likely to be skilled
coming from the poorest countries.

And this is historically been seen
as detrimental to those countries.

Here's just again from
the cat Gallup poll so

they other thing about the Gallup Poll is
they now work one hundred forty countries

and so they're trying to measure.

This question of skilled migration and
I with others an interesting question.

Ideally if you had the opportunity would
you like to move permanently to another

country or would you prefer to
continue living in this country.

So this is asked across Latin America and

then this correlated with
whether they work with.

Leaders are not so
on the far left hand side

of the responses I prefer not
to work with computers at all.

So those people seventy three
percent would like to continue

living in their own countries.

Twenty six percent still would
like to move somewhere and

that in itself is an interesting
number but if you go into the far

end I enjoy working with computers and
could teach others how to use them.

You can see that the fraction that
is inclined to move is higher.

So again just suggesting that that
there is a skill bias in migration and

so as highly talented
migrants come to the US or

to another country even
perhaps to start businesses.

You know they're they're not contributing
those skills to their home country.

So the historical wisdom on this has been
a kind of zero sum vision of it that

every person who leaves is a loss to
their home country I think I'll just

leave it there because I think that kind
of logic is straightforward now what.

Anneli sixteen has argued
is that when people move

they don't necessarily have
to cut their ties forever.

There are a variety of ways in
which they can take advantage

of their skills if they're scientists
to work with the very best equipment in

the world which happens to be
in the developed countries but

they might retain some connection to
their home country in this is more and

more possible as information
technology improves and

so she argues for
this what she calls brain circulation and

as she showed in the case of
Taiwan in some parts of India

people who came to the US in particular
then built up these relationships and

she argues contributed to the development
of their home country even though they

didn't necessarily move back there
permanently although some did and

you have these these are I guess
the Taiwanese use the term astronauts

these are people who travel back and
forth across the Pacific but

tend to keep their permanent residence
in the US in then the Chinese use

the term sea turtles which are people
who have returned permanently to China.

So again this is an emerging notion in
our our study is going to try to explore

this with the immigrant entrepreneurs we
haven't really developed it very much yet.

But we would like to
explore this question of a.

Other immigrant entrepreneurs are more
likely to have connections back to their

home country and of course that's open
to interpretation that could be seen as

kind of a speeding up of the outsourcing
process if you want or it could be seen as

I tend to view it as a recognition of
different kinds of opportunities and then

there's also an argument out there that
actually a certain amount of migration is

good for the sending countries that it
raises the payoffs from education and

if you allow people to have
the opportunity to have access to a global

labor market then the people who are still
at home will tend to want to get education

in the best evidence of this comes from
the Philippines enough anybodies been in

the hospital lately but you have a pretty
good chance of having a Filipino Filipina

nurse in American hospitals and that's
because the Philippines have been building

nursing schools to supply
the american nursing market.

We have the world know it's true.

And so and that's been just
the Philippines happens to be the most.

Upfront and aggressive about this.

And there is some so there is some
feedback in some cases between this

opportunity to migrate in
the acquisition of skills at home.

But I don't think there's any
inevitable relationship and

one of the things we're interested in
this project is to think about how public

policy might facilitate those
positive feedback effects to the to

the home countries and the evidence so
far suggests that the smaller the country.

The bigger the chance of a brain drain so
countries done on this and.

Are well over fifty percent of their
people who have college educations

are living abroad.

Trinidad Haiti Jamaica Guyana.

So the smaller Caribbean countries the
smaller African countries tend to be tend

to be in that group.

Now of course the overwhelming
numbers are from the big countries but

the the opportunities as a proportion
of the population to depart

are just smaller for those big countries.

All right great.

So I got through my background right on
time and I'm happy to entertain questions

about any of this material that I
presented all again to provide context for

our study our study doesn't
speak directly to all of it but

we would like to to engage these
questions as we move forward.

So as I mentioned we have this population
of firms that comes originally from Dun

and Bradstreet we have
a business partner that runs

something called the A C S L The American
corporate statistical library and

we're using the last four year sample
of those three that I showed you.

There's about three hundred seventy
five thousand firms from all sectors and

then we filter it down just
by sectors that have a high.

This is a conventional definition of
high tech high proportion of R. and D.

spending as a share of their revenues or

a high proportion of our of the employment
as a share of their total employment.

So our total population for the U.S.

is about twenty five thousand firms you
can see that they're mostly in the service

sector which is not always the way
people think about about high tech but

I think it's really important for
our study that we capture services because

that's where a good deal of the growth
in this economy comes from.

So we did a national random sample
of those twenty five thousand

firms we hired a real survey center for
better or

worse it was the George Mason Survey
Research Unit which was responsible for

a few delays and
basically we called firms and we asked

speak to somebody who was familiar with
the history of the firm and then we had

a very short survey instrument so that we
would get people to stay on the phone.

There's a big problem
with having very long

interviews on enough people here are
familiar with the cost in a firm survey.

This is a very long service and
I think it takes about an hour and

they made the guy told me they made three
hundred seventy five thousand calls to

get a sample of five thousand firms so we
don't want to say we don't have the money

to do that and be we don't want
to spend that much time on it.

So we did a very short.

Instrument basically asking a little bit
about the firm a little bit about what it

does to do R. and D. that hold patents and
then our key questions.

To do with the demographics of the
founders and we actually got a pretty good

higher response rate than anybody thought
we would though there are various ways to

measure the response rate anyway we have
about fourteen hundred in the study.

So just to describe our population most
of these firms are privately held.

About twenty to thirty percent
have some kind of R. and D.

activity or whole plans or
at least they said that they did and

you know again manufacturing
services split.

You might expect that about thirty
percent of the firms are manufacturing

key numbers so this is our key finding and

I'm pretty sure this will hold up because
it's just descriptive about fifteen

percent of the firms in our sample were
had at least one foreign born owner but

most of these entrepreneurs have
been in the U.S. for a long time.

The vast majority are citizens.

Most of them got their last
degree in the U.S. and

they're very highly educated as you
would expect in the high tech sector.

One of the things that surprised me and
actually I don't know anything

about female entrepreneurship but
there was a pretty high proportion

of female entrepreneurs in this study you
have to find out from his old whether this

number is way out of line and
especially given that IT services.

I don't know how to interpret that.

But that's something that we're
going to look into as well.

OK so now a little bit of analysis so

now we're looking at the technological
performance to immigrant founded firms.

Contribute disproportionately to the
technological base of the of the high tech

economy in this.

This is just day by various analysis so

you really can't hold us to it but
we did it.

We did do one where we controlled for
sector manufacturing versus services and

here you can see that the foreign born
firms with at least one foreign born owner

have are more likely to say that they have
a patent than the firms that were entirely

founded by natives in the the piece
that to stick is strong on that.

So these are shares so
thirty two percent versus

twenty one percent answered
positively to that question.

So stop me here if I'm not
explaining my my data.

Clearly.

I know I know so I'll read them to you.

So I will.

So thirty two percent of the firms
that have at least one for

about one hundred reported that
they held the patent versus twenty

one percent of those with only American.

Founders.

And now this question has to do
with whether you have a we call

that a strategic relationship
with firm in a foreign country.

And here it's even stronger about
forty five percent of those firms in

the at least one foreign born owner
one foreign born founder group versus

twenty two percent so about twice as many
proportionally have this relationship with

a foreign country that's going to
give us access to this question that.

I just mentioned about migration and
development and and outsourcing and

all that sort of stuff but again these are
just by variant so we've got to do a bunch

of controls before we can really make
any conclusions from performance.

So here we categorize the firms into
four different groups according

to their employment from low
to very high and on average.

Sorry of the in this particular study.

This particular group we have sixteen
percent had at least one foreign born

owner but of the very high the very
large firms the most successful

firms about twenty four and a half
twenty five percent of the foreign born

firms have reported that they
had very high employment so

it could be that these immigrant founded
firms are disproportionately contributing

to to employment by
these high impact firms.

But in this.

Yeah.

This is number of employees so

that the firms have so
we're calling Attica nomic performance.

That's that.

Yeah so.
So

that's one of our depended variables but

it's operationalized here as
employment and we can also do it with

revenue the results are the same of though
I guess the conventional wisdom about

these data is that the employment
data are better than the revenue data

because I guess Dun and Bradstreet kind
of estimates the revenue data and some.

Cases but this is the one where I
can actually show you a little.

We produce some aggressions this week.

So this is really really fresh.

So we control for two things we control
for the age of the fern and we control for

the sector that they're in and
here we're here is the native and

you get this is with the dependent
variable here is for employment it's

the same as the previous slide but when
you put it in the multivariate context

then then the finding goes away for
better or worse we'll see.

We don't care if the firms are exactly
the same as native firms or not.

Both I think are interesting.

So we'll see if this holds up but
I have a feeling that this particular

regression will probably hold up because
it doesn't seem to me that there are any

other important variables to put
into control for so probably there

isn't this connection between
immigrant founding and infirm growth.

At least not not as we've measured it.

All right.

So that's all I can show you for
the moment but

I did want to mention the future piece
of the project which is to go out and

do some case studies we're going to try
to match firms together to get some find

a grain sense of their business strategy
to really explore this question about

foreign networks in particular and
more broadly the question of whether

the firm was founded by immigrants or
recognizing different kinds of

opportunities then the native found
difference because one could argue

that if these immigrant
founded firms weren't there.

You know would you know would why when
a native see the same opportunities so

you know name your favorite
foreign born entrepreneur Google.

Right.
Sergei Brin is from Russia.

I believe you know would somebody
also founded Google if he hadn't been

admitted to the U.S. on his visa.

That's the hyper kind of counterfactual
that we want to explore so

we're going to do it through
some There are many others.

Andy Grove you know you name it.

So there are all these for
effect success stories out there and

the tendency in the public discourse
this is a zero point zero.

You know there is surrogate
brand there is Andy Grove

you know where would America be without
these immigrant entrepreneurs and.

What's said and
many many Yeah go all the way back

course we're all immigrants ultimately But
so that's where we're headed with this

project over the summer is to is to do
some matching and to do some qualitative

work on our own pairs of firms from
different subsectors of high technology.

Perhaps from different
regions of the country

to try to get a little bit more insight
into the question of the kinds of

businesses that these different
kinds of firms are building.

And let me leave it there and
open up for questions.

Thank you.

So.

OK You know I rather do I want to and

I guess I left out a slight I'm sorry
I thought I was done but I did.

Basically you can spin this in a variety
of ways are my spin would tend to be more

open borders.

And that we need to build a pathway for

people to get to the point where
they can become entrepreneurs.

But I always say wait for
the rest of the study in other people.

So these guys act.

I mean just two years.

Great great right and

are you me right right.

Like you.

Some people would say so

I don't know how many students here
would say that but I think if.

So what are they.

So you want to add on to that.

Yeah.

I don't

know.

Well so let me separate the two the two
points and they're both good points so

on the first one I think it really comes
to the question of complementarity versus

substitutability one of my students
actually the same one who had this Gallup

poll data shared with me an article about
Vietnamese manicure a sudden know this.

In California.

It turns out that almost
all the new manicure S.

in the last fifteen years in
California are from Vietnam and so

that allowed this research to look at
this question of complementarity versus

substitutability in there
was some displacement.

But in fact there are a lot more
manicurist than there were before because

it turns out that they have
created a new business model for

manicures little kiosks that's the way
I understood and I'm not in the.

On the customer end of that.

So I can't say for sure but in any
case they have expanded the market for

a manicure it's in California and so

the question is does that kind
of stuff go on in high tech and

you know if you want to view it from
a national competition point of view.

Do they allow American business
to recognize opportunities.

Either that they do in one
recognize at all or more quickly or

to exploit them more rapidly so that's
that's the value add question if it's

purely a crowding out issue then then I
think the restriction is either point so

we're not going to be able to answer that
question with this study this is just one

input and then you know my biases are for
whatever reason on the.

On the pro immigration side but I tend to.

I tend to try to move them
in that direction but

I would say our number fifteen percent
is quite a bit below their studies.

So so and
that may have to do with our population.

OK was fine before.

Well population so

let me just speak to this actually
interested in this question as well.

Whether in this is actually a big
question of whether migration and

trade are substitutes for one another so
is it is it make more sense to have your

H one B. come here do the work even
though you have to actually pay

them more than they would
be if they stayed in India.

It's seems to me that that
option is still always there and

there must be some advantage of being
in proximity with everybody else

in the company or being in proximity
with the American programmers that

that provides this momentum for H. one B..

So I don't know you would have
to be inside I think I.B.M. or

another one of these big H. one B. users
to understand that issue in more detail

and my guess is that there's probably some
of both there's probably some substitution

that goes on in that program and some
complementarity and it seems to me one of

the solutions is to is to really
try to enforce some of the wage and

in working condition pre-conditions which
are supposed to be attached the H one B.

but are basically ignored right now.

So a company that wants to have any
twenty basically just has to sell

Labor Department.

We're going to pay them the prevailing
wage labor department actually doesn't go

out and find out if they are.

I mean I think we'll actually see some
of that coming in coming through.

Pretty soon we do want to follow up.

Yeah yeah.

Yeah.

I have yes.

And my.

If they're truly if they're
truly pure substitutes.

I think that's probably probably a fair
a fair argument in I think you have

to do that is kind of a.

Holding action cause ultimately presumably
the native jobs are also going to.

Going to go the way of the.

Passenger pigeon.

So it's.

Yeah yeah.

Now I don't think so.

OK.

Yeah we actually don't have that we didn't
actually ask the age of the founder

We only have the age of the company and
then we have the number of years

the foreign born people have been in
the U.S. So we can't do that directly here

we do know that successful
entrepreneurs at least tend to have

quite a bit of business experience that is
this lines up with what we know about it.

What I know about native entrepreneurs
who tend to be late thirty's early

forty's to have you know those business

connections especially in
high tech that are important.

So Bill Gates.

You know starting the company
right out of college.

That's not the parodic Matic
entrepreneurial in our in the population

but it would be nice to know if these
guys are older than the Americans but

we can't do with our survey we do need to
control for the educational background.

Yeah I agree with that and
we probably should should throw that in.

And I don't know the spread on this
across the whole population but

most of the high tech founders tend to
be pretty highly educated in so but

we should you're right we should
put that in as a control.

Yeah yeah yeah yeah yeah.

Yeah I mean that all factors into it
in you know there are other intangible

benefits that might come from immigration
again that may be what accounts for

my bias that I think our country
benefits from this diversity.

I don't know.

You know give me think that's kind of
a directly back to Dan's point that you

might as well have them here even if
they're doing stuff that could be done

abroad for both employment in direct and
in direct reasons.

Yeah you know we didn't ask
that because one we asked for

the respond and we didn't ask for
the actual founder because

we thought it would be too difficult to
get through and then we felt like let's

say it's you know somebody who's been
the executive assistant to the C.E.O.

This is kind of my vision of what the
typical response is like when they know

for sure if the person came on a J. or
you know if it happened twenty years ago.

So we were in feel confident
that we would get that data.

There is a paper recently which I have
downloaded but haven't read by Bill Curry

from Harvard Business School which looks
at the correlation between H one B. S.

and patent production arguing that H.

one B.'s actually produce patents
in the US but I think it's true.

Another.
Another point which

is relevant to the immigration policy.

I actually think it would be good to to
try to break somewhat the link between

employment and immigration that people
are stuck in these relationships

with their employers until
they get the green card.

Right.
So it's very hard to be an entrepreneur if

you're not allowed to change jobs and
you lose your place in the queue and

everything because you know once you
put your put your application in you

go in line and then if it's a five
year wait you know every time

you switch jobs you go
to the back of the line.

So that's obviously a.

A problem for entrepreneurship so I kind
of think we should break some of those

linkages anyway but I'm sure it's the case
that different kinds of status is

are more more or less prone to
entrepreneurship but unfortunately this

particular study can't get at that and
maybe there's some way to get it though.

Yeah.

Yeah so the case study should provide some
insights into that but it may not be big

enough to capture the different
categories in the course that people move

from category two category to you know
especially from a student to temporary

work to you know there's all this for
nailing that goes I mean our system is so

messed up that finagle in is only way
to get through it as far as I can tell.

Yeah.

OK great.

And I would love to be
able to substantiate that.

I mean you know as I said I kind of have
this you know bias in favor of immigration

and I would like to think that there's
some complementarity or value added.

But I think to jump to that conclusion.

This is where I've had some some debates
with other people from the fact that we

have any growth that we have Sergei Brin
that's that's alone is not not enough.

Now you may never nail it down in
fact even in the low wage area.

You know the study of manicurists not
withstanding there's a huge debate about

whether there's crowding out even
in low skill jobs despite the fact

that there's this huge population.

I mean twelve percent of the population
of the U.S. now is foreign born and

to believe that there's no labor market
effects just seen seems to stretch

the boundaries of believability but
people have not been able to nail it down

so you know I'm not going to say that will
nail it down but I hope that the case

studies will provide some insights as I
said we're going try to match firms on

these objective characteristics
as much as possible and

see you know do their business
strategies differ in some systematic and

a way you know when you look at.

We haven't done it yet
we haven't done yet.

I just got these results this week so but
I mean I guess theoretically you would

expect that firms that are older to be
bigger in firms in different sectors to

be systematically different in size and it
seems to me that with those controls you

don't need to go much beyond it to believe
that that washes out the immigrant.

Factor because there is not necessarily a
theoretical reason to think that immigrant

founder firms ought to be bigger or be
more successful they may be different but

not necessarily so when we will we
will look at some of those underlying

diagnostics we just haven't
we haven't had a chance yet.

What do you have for us to get.

Yeah yeah.

Was there a tendency among
the firms to cluster is a very

live at one point in terms
of where they meet you.

Yeah yeah yeah it's definitely
applies on the types of really.

Yeah and complete.

Yeah we do have some weights
I didn't mention that.

So we've got this is one of the things
we've been doing the last month is waiting

the sample by age of firm by basically

the what core tile of state you come in
to in terms of your immigrant population.

And size.

I think those are the three
factors that we we are so

weighted on manufacturing versus
services but that was very very small.

So we've been fiddling with the weights
and the numbers the regression in

particular I think all across
helps you are on the way to data.

So we did have to wait them I don't
think they're really badly distorted

we did have a problem.

Here's the I should probably cover
my microphone I do this but with our

survey one of the problems we had with the
Survey Center was that somehow somewhere

in there some software they had a glitch
where they didn't call any phone numbers

that had a number seven or larger as
the first digit so they had to go back and

give us a much bigger sample to fix that
which does impose a geographical bias so

though it's not quite.

Unless you really know the area codes.

It's not clear exactly what that is but

I know that you would pick up
some of like Southern California.

You know if you left out all
the seven eight and nine.

So we do have a geographic from
a telephone number a point of

view a random sample and we have that
we've adjusted it by state population

by some of the some of the variables
associated with the firm.

We didn't see any real big biases
in just looking at the raw numbers

they're in hopefully the weights will take
care of that but I think it's you know

it's a far cry from China and I was really
surprised by the responses I have to say

when we talked to people before they said
You'll be lucky if you get ten percent or

fifteen percent and you know there are
different theories out there about twenty

different ways to calculate response
rate so this is just people who declined

versus people who accept it doesn't count
the run the numbers the fax machines and

some of the other things that you would
encounter in a different response.

Yeah yeah yeah

that's my vision of it where yeah so

we have well we have the title we
don't have the name of the person for

privacy reasons we have the title of the
person so I obviously you can go back and

pin them down and I haven't look
systematically at those at those job

titles so the question was something like
the screening was something like we would

like to speak somebody to somebody who's
familiar with the founding of the firm and

this is I think pretty typical
language in this type of survey but

you are to some extent at the mercy of the
respondent and it's not you know it's not.

The founder in some cases the founders
are you know long past be on the scene.

So yeah.

You know who their CO who they're who
they're well we can figure that out.

We haven't done that yet.

So we have a question that asked how
many founders there are in there for

each founder We asked the demographics so
we can go back and look at that.

Yeah yeah.

Yeah and

we do have a question there
about how the founders met or

how they decided to go into it.

Whether it was I think they were
something like that in school met

through family met through friends work
together or other something like that.

So we actually can can find
out about about that and

we have something like two hundred some
odd immigrant founded cases here so we'll

see how much you know how much leverage we
can get given the size of the population.

But I'd be curious to see to see
what that see what that shows.

Yeah I mean free to go but

I think that's probably yes.

One point one million.

OK because look there are forty seven
percent immediate family houses.

So why.

It's not really good for you very very.

You know people have all the options.

Lord no.

If you bring in more skilled.

You know.

Well I think there are two ways to
answer that the first thing is that this

is this was put in place in one thousand
nine hundred sixty five the basic

structure of immigration policy was
put in place one hundred sixty five.

And I think the noble
justification is that it's

a humanitarian thing you know why should
people live without their families and

if you look at European policy
that's how they justify it but

the other piece of it is that the people
who are here to lobby for it.

You know there is some ways more powerful
than the employers I mean you'd expect.

You know depends on what your vision
of U.S. politics is you think employers

should be more powerful than some broadly
distributed grassroots movement but

as we as we know the you know the ethnic
groups are organized in the U.S. and they

push for this but what was unexpected in
one hundred sixty five was that there's so

many of these family members would be from
Latin America from Asia now from Africa

and we also had a so-called regularization
which occurred in the one nine hundred

eighty S. which brought in about three
million previously undocumented residents

almost all of whom are from Mexico and
Latin America and

now they're bringing their families and
so I mean this is a chain.

This is a feed positive feedback effect
and migration is that kind of phenomenon.

It brought it all on sure.

Yeah.

Course.

Well well economically
probably in the long run.

I mean the one case that I
know about that's a little bit

like that is Israel in the one
nine hundred ninety S.

they had a an influx of something like
twenty percent of the labor fourth.

Now you be careful with
the any of the robot.

You can very well.

OK.

But there was a huge huge rise in their
high school workforce in terms of numbers

because the Russians.

At the end of the Soviet Union.

There was a huge outfox of
Russian Jews to Israel and

it did this is the one case where they've
shown that there's a connection to

the wages that it knocked down wages about
ten percent for the skilled workers.

You know that way.

It was the best thing that happened for
you.

National companies you know
because of the Russian.

Low skill high tech you have good
low skill high skill and in our own.

So there were two of us.

I mean the timing of that
was could have been better.

Right because the Nasdaq starts
in the mid ninety's and.

Why you and

the people here should be most

people when we

do.

Nation bringing everyone green.

Well that's the other piece

is that everybody you know many people
have families much for selecting on single

people which is not necessarily the best
thing to do from the social point of view.

Then they ultimately they
create the demand for

family members as well but you know you're
right and then of course the other piece

is you want to look at this from a global
perspective then you know the U.S. is such

a huge receiving country I mean it's worth
the rest of the world in terms of these

numbers not just disregard the proportions
here but just think about the numbers.

Yeah just the absolute
a million people you.

Getting Plus getting green cards and
you know it's much bigger than anywhere

else and I probably the rest of the
O.E.C.D. put together something like that.

So you can really accelerate the brain
drain in a fight about that if and

when these quotas actually come up for
not not the H. one B.

but the the green card quotas
come up apart from this

internal conflict there's a there's
a there's a development issue and

people really come here.

You know when you work from here and not.

Create.

Or.

Yeah yeah you know you have read your

names and.

Yeah and it turns out that it's very hard
to teach to these point systems to get

exactly the kind of people you might want
to mean Canadians are constantly tuning

there is and
they have a big brain drain to the U.S.

in their basic view now as I understand it
is that they have a point system in a good

education your experience if you
can speak French or English.

In fact that has its own immigration
policy as you might expect.

But in any case there their interpretation
is they're basically replace in

their best people who come to the U.S.
with people who are not as good.

Because it's just very hard with these
descriptive characteristics to select.

My computer is well protected
against viruses or not.

I'll say that a good way.

If someone you know they
have a lot of money but

they're still not down in that list and
they have you feeling for their education.

While Snow's guy has entrepreneurial
instincts Yeah yeah.

But it's important here to think about.

I mean I can't speak the same effort but
I can speak to Hong Kong.

You know geographically
somewhat similar in St for

the U.S. as well there's a huge demand for
low skill workers.

You know nannies.

I mean that's not really low skill but
it's low paid you know cleaning people and

so on and landscape people and my
understanding of the East Asian systems in

general is that those
people are meant to be.

Rotated in and out.

I mean that the system does try to push
them out and and in fact other systems

are supposed to be like that but
haven't really worked out that way and

we'll see if these countries that have I
mean Hong Kong has an incredible system

of let's say surveillance I guess
is the maybe too strong word but

they you know you have to have your
identity card on you at all times and

it's a relatively small place and
so if you want to kick people out.

It's easier so there's a huge you
know suppose to be a turnover

of the low skill people and
they want to keep the high skilled people.

Yeah yeah yeah.

And so that's that's the system so.

So they're trying to prevent this
kind of chain migration that occurs

with the low skilled people in the U.S.
and in Europe.

And you know there are there are various
arguments you know the economic

side versus the humanitarian side versus
you know you got the jobs and and

you know people need to do them
in are you creating a society and

what do you think of that first
if only immigration on top of it.

Yes that if you actually want
somebody here or they're not here.

They can't win by giving
their families when the U.S.

yeah but

if you really want to you have to live
in countries are aware of that and

increasingly we see relaxation of
spousal work requirements in so on so

that people who come you know
on a certain kind of visa

then their spouses can also work so
it's a kind of a two for one idea.

That's a good point to yeah but
this is you know this can include parents.

It can include I mean it's not just
spouses and not just minor children there

are I can't remember the details
of the preference categories but

I believe includes doesn't include
parents I think includes pay.

To complete it.

Let's stop for a moment.

OK OK this is a free for all that.

OK.

All right.
I guess it's comes to you on the one.

OK you have a very much

here.

You know I've been reading

like your

post and then you know worn and

good i have my back.

Because he

basically started.

Because he really wanted to be one not

completely one in the.

Well not in the survey but
I'm not sure that that's not

what really matters to us why there
might be a higher propensity to become

entrepreneurs that is if it's sort of
some insecurity that may also be OK that

Americans you know are native born
people don't see the opportunity or

don't seize the opportunity because
they're comfortable in their job.

They're tenured professors or
something silly like that.

So they don't have to worry about you
know ever working again in their lies and

so the.

So yeah yeah.

Well that's I mean part of it is that
people do come for just for that for

that reason but more broadly I think you
have the opportunity is a big draw for

people whether they think of it originally
in terms of business opportunities or

whether it's other kinds of opportunities
but to feel their their potential

in some way but I guess I want to come
back to dance group not sure I understand

why does it matter from the point of
view of the economy if people start.

As in the why is that different
from policy because once you start.

That no one wants to keep me company.

You want more right.

So when you force people to say.

Yeah you know completely and
yeah yeah no I think that's a.

It is something of a defect of our policy
and there's some advantage to matching

labor demand with labor supply I mean you
don't want to get rid of that company link

all together because you know then people
can you know then your you know is

well kind of skills you're getting and
whether your economy can really take

advantage of them in skills or there's
the higher you go up the food chain.

The more the less transferable I mean
I can't do anything else besides

what I do so.

I'm not transferable at all.

And so if you bring in a bunch of
political science professors you know

that's bad for me but it also going to
be a lot of people driving cabs I mean

everybody knows that there are plenty of
skilled people out there are credentialed

people out there doing our underemployed.

So I want to cut that link all together.

It's just a question of balance and even.

Had a chance to say yeah

we had five.

So we had fifty S. I.C.'s into
only five of them are services and

they were almost all we actually
took out management and

public relations took that out because
that was actually a big number.

It was like fifteen thousand firms we just
decided it was going to skew our sample if

we included them but they actually
fall into the high tech definition.

It's most I mean it's mostly I.T.

services just kind of eyeballing
the names of the firms we have.

We have a lot of architecture firms
design firms Internet design.

So I think that's the bulk of them.

We also had.

Engineering Services and
interior professional services so

I think those are the two biggest
codes one of seven thirty seven.

That's the I.T.
and I can't remember the other one.

But it's eight something but I think those
are the biggest The two biggest class

occasions are engineering professional
services which is kind of a catchall and

we have also we have other
services not elsewhere classified.

So who knows what there was are but
I think we have a lot of I.T.

companies in there.

Yeah yeah just it was
stratified by services and

manufacturing that was the only that
was the only stratification we did in

pulling our pop point our sample.

Yeah.

The next question.

I just need to work out
there's a lot of research.

There's two tier system.

If you like.

Yeah

right yeah.

Yeah you really right.

Right.
Actually these guys

the Global Entrepreneurship monitor they
make a distinction between what they call

opportunity entrepreneurship and necessity
entrepreneurship and if you look across

countries you know there's a lot more
necessity entrepreneurship in poor

countries that are doing in so and
it's true in the U.S. as well.

So this guy fairly who's looking at
the Current Population Survey he says

that the immigrant startups
are clustered in high school and

low low skilled those streams of the of
the market in you know I I would

assume that the most of the Latin American
immigrants here are have low education and

so they're probably working in
the service you know low and

service areas I don't know that that's
true across the board and we're just

guessing here whereas the Koreans
are probably they're probably distributed

exactly is that where you know they're got
groceries on the one hand and you've got

high tech people in the other and so so
I think that that that is a good point.

And again expecting complementarity
versus suitability I mean.

Would there be cleaning businesses.

If there weren't immigrants
to start them and

I think the answer is probably yes
because there are dirty floors one way or

another they might you know they might use
different kind of equipment they might use

a different mix of labor and capital but I
think that the opportunity is still there.

There's still.

That.

OK Thank you.

Yeah thanks a lot.