Canada, China challenging the United States for start-up supremacy

The United States has long been a magnet for some of the world’s brightest innovators and entrepreneurs, who have come here to launch firms like Intel, Merck and Google.

But competition for foreign talent is swelling, and experts warn that the country could fall behind as other nations beef up efforts to lure the next generation of business leaders.

“From Singapore to Germany to India, countries around the world are making it easier and more attractive for talented foreigners to settle and contribute,” Steve Case, co-founder of AOL and head of investment firm Revolution LLC, said earlier this year during a hearing before the Senate Judiciary Committee. “What was once the secret sauce of our economic advantage, a strong entrepreneurial economy that rewards risk, disruption and innovation, is being replicated aggressively around the world.”

The latest example comes from just across the border, as the Canadian government next month plans to launch a start-up visa program designed to attract entrepreneurs from around the world. The pilot program offers residency to foreigners sponsored by Canada’s Venture Capital & Private Equity Association or its National Angel Capital Organization.

Canadian government officials are currently searching for additional private-sector groups to help the country find more foreign-born entrepreneurs, and they aren’t being coy about where they plan to harvest talent.

“When this thing gets launched, I plan to go down to Silicon Valley with some of the industry associations here and fly the Canadian flag and say to those bright young prospective immigrants, some of whom are going to create massively successful companies in their lifetime, that they can come to Canada through this program and they can get permanent residency here, and have the certainty that this represents and start their businesses in Canada,” Jason Kenney, Canada’s Citizenship and Immigration Minister, recently told the Financial Post.

Citing the heightened level of competition, Case, who serves on President Obama’s Council on Jobs and Competitiveness, has repeatedly urged lawmakers to take steps to stop the United States’ entrepreneurial sector from suffering the same demise as its once-dominant manufacturing sector.

He and other entrepreneurship advocates have lobbied for proposals that would eliminate per-country caps on employment-based visas, create new classes of visas for highly educated and entrepreneurial immigrants, and help foreign-born graduates from American universities stay and work in the United States — all of which have been included in small, targeted immigration bills introduced in the past two years.

Critics of the proposals argue that beckoning more foreign workers would drive down wages, especially in the technology sector, and take jobs away from native-born Americans. In response, Case pointed to a study showing that every foreign-born worker specializing in science and math fields creates an average of 2.6 new jobs for U.S. workers.

Riding a wave of support from minority voters in the fall election, President Obama has insisted that lawmakers tackle immigration reform with an all-or-nothing rather than piece-by-piece approach, essentially tying the fate of proposals for educated and entrepreneurial foreigners to that of a larger, comprehensive deal.

A bipartisan “Gang of Eight” senators is currently working on such a deal, which they say will be ready by the end of March. However, while their proposal is expected to increase the number of visas for highly skilled workers, there is no guarantee that it will include help for foreign-born entrepreneurs.

During a meeting last month with entrepreneurs, Sen. Jeff Flake (R-Ariz.), one of the eight, said proposals like a new class of start-up visa “have a good shot” at being included in a larger deal. Still, he said their inclusion may rely on their capacity to secure additional votes for the total immigration package.

In the meantime, Canada is moving full-speed ahead on proposals to attract non-native innovators and entrepreneurs — and they aren’t the only ones. In the past year, for example, China, Australia and Germany have all implemented immigration reforms designed to lure more foreign talent.

Check out the gallery above to see the details of their plans, and find out which other countries have adopted some of the immigration proposals that are stalled in the United States.

Follow On Small Business and J.D. Harrison on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he manages the Post's On Small Business blog.
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