Don't Blame H-1B Workers for Woes

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The research showed that Indian and Chinese H-1B holders are disproportionately represented among those who file for patents, especially in the computer field. Indians contributed to 7.6% and Chinese contributed to 11.8% of all patents filed from 2000 to 2004, even though Indians and Chinese comprise less than 1% of the U.S. population each. Tech companies were highly dependent on Indians and Chinese for their innovation. In 2006, these groups contributed to 33% of patents filed by Intel (INTC), 23% of those for Microsoft (MSFT), and 22% of patents filed by IBM (IBM). Even for consumer giant Procter & Gamble (PG), the immigrant patent contribution was 11%.

Immigrants Jump-Start Startups

My research, too, has explored immigrants' potent contributions to U.S. innovation. More than half of Silicon Valley startups were founded by immigrants over the last decade. These immigrant-founded tech companies employed 450,000 workers and had sales of $52 billion in 2005.

And while Kerr and Lincoln looked at changes on a year-to-year basis, other recent research shows that decade-over-decade advantages may be even stronger. Jennifer Hunt of McGill University and Marjolaine Gauthier-Loiselle of Princeton University analyzed long-term changes in a paper published in January titled "How Much Does Immigration Boost Innovation?".

According to their calculations, for every percentage point rise in the share of immigrant college graduates in the U.S. population, the total per capita number of patents for the entire population should increase by an astonishing 6%. Even more important, Hunt and Gauthier-Loiselle found that natives are not crowded out by immigrants, and that "immigrants do have positive spillovers, resulting in an increase in patents per capita of 9%-18% in response to a one-percentage-point increase in immigrant college graduates."

Waiting Decades for a Visa

My research found similar trends when we examined global patent filings by foreign nationals residing in the U.S. with the World Intellectual Property Organization of Geneva. We determined that foreign nationals residing in the U.S. were named as inventors in 25.6% of international patent applications filed from the U.S. in 2006. This increased from 7.6% in 1998. When trying to understand the reason for the 337% increase, we uncovered some worrying statistics. As of Sept. 30, 2006, there were 1,181,505 educated and skilled professionals waiting to gain legal permanent-resident status.

These workers were on visas like the H-1B. To make matters worse, there is yearly allotment of only 120,000 permanent resident visas for such skilled workers and a 7% limit on how many visas can go to immigrants from any one country. So immigrants from populous countries such as India and China could be waiting decades for a permanent resident visa unless immigration quotas are relaxed.

Anecdotal evidence and media reports supported what we feared—that highly skilled workers are getting frustrated with the immigration process and are seeing greater opportunities in countries like India and China.. Tens of thousands are returning home.

Layoffs Force Immigrants to Go Home

The economic downturn has made matters much worse. When American workers who have the skills to file patents and develop new technologies get laid off, they often start new companies. And these companies generate employment and help the economy recover. When workers on H-1B visas get laid off, they usually have no choice but to return home and start their companies abroad. So they are planting the seeds for future economic growth in their home countries, seeds that could easily have been planted in the U.S.

So the critics of skilled immigration may get their wish. We will scare away the world's best and brightest who have always flocked to our shores. But the next Silicon Valley won't be in located the U.S. It will likely be in Hyderabad or Shanghai.

Wadhwa is senior research associate at the Labor & Worklife Program at Harvard Law School and executive in residence at Duke University. He is an entrepreneur who founded two technology companies. His research can be found at www.globalizationresearch.com.