The Reverse Brain Drain

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We realized that these foreign-national inventors were not likely to be from the same immigrant group that was founding high-tech companies. They were likely to be PhD students and employees of U.S. corporations who are in the U.S. on temporary visas. Temporary-visa holders can't easily start their own companies—their visas require them to work full time for the company that sponsored them.

For our new research, we reanalyzed the WIPO patent database to look at which immigrant groups and corporations were applying for the most patents. To understand the foreign-national data, we examined extensive information published by the Homeland Security Dept., the Labor Dept., and the State Dept. We also reviewed the New Immigrant Survey to gain insight into the immigration process and to examine the potential that, even after becoming permanent residents, skilled immigrants might return home.

Here is what we found:

• Foreign nationals contributed to more than half of the international patents filed by companies such as Qualcomm (QCOM) (72%), Merck (MRK) (65%), General Electric (GE) (64%), Siemens (SI) (63%), and Cisco (CSCO) (60%). Their contributions were relatively small at Microsoft (MSFT) (3%) and General Motors (GM) (6%). Surprisingly, 41% of the patents filed by the U.S. government had foreign nationals listed as inventors.

• Foreign nationals contributed to 25.6% of all U.S. international patent applications in 2006, but the numbers were much higher in several states such as New Jersey (37%), California (36%), and Massachusetts (32%).

• In 2006, 16.8% of international patent applications from the U.S. had inventors with Chinese names and 36% of these (or 5.5% of the total) were foreign nationals. Similarly, 13.7% had Indian names and 40% (or 6.2% of the total) were foreign nationals.

• Both Indian and Chinese inventors tended to file most patents in the fields of medicine, pharmaceuticals, semiconductors, and electronics.

Our analysis of the immigration data produced the most startling results.

"Immigration Limbo"

We estimate that, as of Sept. 30, 2006, there were 500,040 individuals in the main employment-based visa categories and an additional 555,044 family members in line for permanent-resident status in the U.S. An additional 126,421 with job offers were waiting abroad. In total, there were 1,181,505 educated and skilled professionals waiting to gain legal permanent-resident status.

In the 2005-06 academic year, there were 259,717 international students in the U.S. There were an additional 38,096 in practical training—many of these are PhD researchers.

One thing is certain: If we wait five years to fix immigration policy, the unskilled workers will still be here, but the skilled workers who are in "immigration limbo" will be long gone. Our loss will be the gain of countries we are increasingly competing with in the new global landscape.

Vivek Wadhwa, a former tech entrepreneur, is the Wertheim Fellow at the Harvard Law School and an executive-in-residence at Duke University. He writes a column on policy issues affecting entrepreneurs every month.