Nearshore Americas

Immigration Reform: Why Tech Companies Drive Demand for H1B Visas

Proponents of immigration reform listened intently as President Barack Obama addressed the issue during his 2014 State of the Union speech last week. Of the multiple facets—social, civil, labor—on the bill for Immigration Reform, the one nearest and dearest to America’s technology industry pertains to the access to foreign talent with specialties in STEM (science, technology, engineering, math) fields.  Political persuasions aside, the strong push favors an increased limit of (or limitless) qualified H1-B visas candidates, and an expedited process in the U.S.

Some of the big-name proponents of the reform include Microsoft, eBay, IBM, Accenture and Google, and we are reminded that approximately 40% of Fortune 500 companies were founded by immigrants or their children. Facebook CEO Mark Zuckerberg and CEO Mark Benioff have cast their vote of support, and the Silicon Valley Leadership Group who—along with 100 executives from technology firms—have called on Congress with a letter pleading their case for immigration reform as a means to attract more high-skilled workers and boost the global economy.

But smaller start-ups are also speaking up.  Engine Advocacy, a group of tech firms seeking innovation and entrepreneurship through startups, has launched Keep Us Here in support of bringing in more foreign talent for the US to maintain its global market competitiveness.

Leading the Global Digital Economy

In the words of Paul Romer PhD, American economist, entrepreneur and activist: “The country that takes the lead in the twenty-first century will be the one that implements an innovation that more effectively supports the production of new ideas in the private sector.”

Currently, the U.S. has the upper hand in the digital global economy. Just look at the platforms that are being developed: iOS, Android, Windows. These American-born tools are the ones leading the world, empowering corporations and shaping the way we live. Facebook, Twitter, and LinkedIn are also helping the U.S. maintain its position as a leader. These leading technologies, developed by bright, entrepreneurial minds are the motor of our productivity. Once that is gone, and companies lose intellectual capital, the U.S. productivity vantage point is at risk.  As articulated by Nobel Prize-winning economist Paul Krugman, “A country’s ability to improve its standard of living overtime depends almost entirely on its ability to raise its output per worker.”

The knowledge economy of the U.S. is largely supported by foreign immigrants. According to the National Science Foundation, 25% of the total tech workforce is made up of U.S. immigrants. Furthermore, 42% of doctoral engineering and science workers as well as 34% of master’s degrees holders in the U.S. are foreigners. The digital age is here, and technology and engineering are driving today’s global economy so much so that every company is a technology company, regardless of industry.

In his State of the Union address, Obama withheld specifics with regards to soon-to-be-outlined proposals, but rather made some broad strokes about the benefits of foreign talent enriching the US economy: “Independent economists say immigration reform will grow our economy and shrink our deficits by almost $1 trillion in the next two decades And for good reason: when people come here to fulfill their dreams — to study, invent, contribute to our culture — they make the US a more attractive place for businesses to locate and create jobs for everybody.”

The Need for Talent

In my position at Softtek as Chief Globalization Officer, I meet with clients in various industries from all over the world. One of the challenges I often hear from executives and hiring teams is that the local talent isn’t enough to fill all open high-skilled positions. reported a 3.8% unemployment rate for jobs in the STEM sector in 2012—less than half that of the national average of unemployment for the same year. Furthermore, Dice reported that from 2011 to today, U.S. tech salaries have risen from $81,327 to $87,811—nearly an 8% increase in three years, and a total way above the national average.

Ayush Soni, government affairs analyst at Qualcomm (U.S. chipmaker with 2012 revenues of $19 billion), recently commented, “We are competing globally now. We’re also now competing with Chinese companies, Taiwanese companies, Korean companies. If we can’t put a worker in San Diego or wherever our supply chips are, then they’ll go and compete somewhere else. That’s a very, very big detriment on our business.”

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In a nutshell, tech companies contribute in a big way to the U.S. achieving and sustaining its status as world leader in the digital economy. They are asking for H1B visas so that they can create more of these innovations at home. Since technology services have largely become a global phenomenon, work naturally flows wherever that talent is. Fortunately, and unlike gold mines, oil reserves or land for agriculture, this resource is highly mobile, and is inspired by ideals and culture. Tech companies are asking something akin to letting gold mines relocate to U.S. mining fields. Or they’ll relocate somewhere else.

Having said all of the above, and as a provider of nearshore services, regardless of the outcome of the reform this is an opportunity for Latin American companies to continue to claim a fair slice share of the largest market.

Beni Lopez is Chief Globalization Officer at  Softtek

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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