Contractors looking for a new life in the US and set on opening a new growth business may be welcomed with open arms should new immigrant visa legislation, the Startup Act 2.0, become law.
The UK’s Coalition government started its term by firmly shutting the door to most non-EU immigrants, and although this has been slightly relaxed, the message being given is still that the UK is less than welcoming. So, would expanding or relaxing the UK’s existing Tier 1 visa category reap the same rewards that the US expects – improved entrepreneurial activity and a significant rise in growth business start-ups.
A significant constituency of the US business and political establishment supports the new act, which will enable 75,000 existing foreign born visa holders to start US companies and within 12 months, raise or invest $100,000 or more, or employ two new workers. The prize for those meeting the act’s performance criteria will be permanent residency within three years.
According to Kansas-based thinktank The Kauffman Foundation, an estimated 1.6m new jobs could be created in the ten years following the act’s adoption, adding 1.6% to US GDP.
So, why do some American businesspeople and politicians believe that immigrants are required to increase start-up rates? Well, it seems that newcomers to the US are more likely to start a new business.
In fact, in a separate report published 12 months ago, the Kauffman Index of Entrepreneurial Activity, authored by Robert Fairlie, Professor of Economics at the University of California Santa Cruz, “immigrants were more than twice as likely as were the native-born to start a business each month”.
The US economy grew by 2.5% in the first three months of 2013. Even though its recovery may be bumpy and start to slow, that level of performance is significantly better than the UK. There is no direct causal link between the Startup Act 2.0 and economic success, yet, but the economic returns may be significant, and swift.
However, immigration is currently an emotive topic in the UK. It has been used as a key, if not decisive issue, in recent Parliamentary by-elections, and has been a major campaign issue in the 2013 council elections.
Little of the coverage has been positive, although in his series on how immigration has changed Britain, the BBC’s political correspondent Nick Robinson has found ‘native-born’ Brits who recognise the value that motivated and entrepreneurial immigrants bring to the communities and economies where they settle.
There are no signs that the UK’s visa system is likely to change any time soon, despite appeals to relax the visa system to allow wealthy investors, top students, skilled workers and even foreign tourists easier access to the country.
Let’s hope that the Startup Act 2.0 becomes law in the US quickly and the benefits of unleashing 75,000 entrepreneurs becomes quickly apparent, to help guide the UK’s policy makers on how best to tackle unleashing the UK’s entrepreneurial potential.