Immigration reform: A competitive imperative

In the first installment of our new quarterly feature Issues by the Numbers, “How immigration is shaping the United States,” we detailed how immigration contributes to the economic vitality and competitiveness of the United States by making us smarter, stronger, and younger. However, the limitations of our immigration system, coupled with increased global competition for top talent, threaten this advantage. Instead of actively marketing the United States as the best place to work or grow a business, our current policies send the opposite message—and we are seeing the results in an erosion of our leadership position in science and technology.

One sign of this erosion can be seen in the substantial shift that has occurred in the balance between R&D employment by US companies abroad and R&D employment by foreign firms in the United States. According to the National Science Foundation:

• Whereas R&D employment abroad by US multinational companies (MNCs) nearly doubled between 2004 and 2009, domestic R&D employment by these firms increased by less than 5 percent in the same period.
• US MNCs employed many more R&D workers in foreign locations in 2009 than the number of R&D workers employed by foreign firms in the United States. In contrast, these two numbers had been similar in 2004.¹

In short, US firms are sending more of their R&D jobs abroad, and those jobs are not being replaced by foreign firms establishing R&D facilities in the United States. Even if the ownership of the intellectual property being created remains US-owned, we are contributing to the technological capacity of other nations—in terms of human capital as well as the physical capital of structures and equipment—at the expense of domestic capacity.

The fact that US firms find it easier to access highly skilled R&D workers outside the United States than at home is due, in part, to our immigration policies. Granted, many multinational companies find it more cost-effective to hire foreign R&D talent. However, we cannot ignore the challenge of finding qualified workers to fill home-bound R&D positions.

Most industrialized countries already admit a higher proportion of more highly skilled immigrants than does the United States, and many are making additional changes to their immigration laws to encourage still more highly skilled workers to relocate.² Further, many countries are investing in their science and technology capabilities, in large part by investing heavily in education and research facilities.³ Top students and researchers are finding that obtaining a world-class education or conducting cutting-edge research does not necessarily require attending a US university or working in a US-based lab.

The US immigration system is a disjointed patchwork of programs, each seeking to support a specific goal such as increasing diversity, unifying families, or filling talent gaps. The net result is a siloed system that does not serve any group well. There are huge backlogs in some immigration categories, where the wait for entry can stretch over decades; shortages in other categories, where annual caps are reached within a few days or months into the fiscal year; and regular surpluses in still other categories. Further, the time delays involved in the temporary categories frustrate employers who need to match workers with the work within tight time constraints.

Given the shortcomings of the current system, it is not surprising that there is a growing recognition of the need to enact comprehensive reforms. We should take this opportunity to redesign the system to increase flexibility and efficiency, better serving those who wish to become Americans and optimizing the potential of these new citizens to contribute to a strong shared future. We need to build on the ways that immigration makes the United States smarter, stronger, and younger. Other countries have realized that they are in a worldwide competition for talent and have adjusted their immigration policies to improve their competitiveness—the United States can do no less.