Tensions rising in Silicon Valley over Trump’s immigration crackdown

  • Immigrants founded 51% of the current crop of billion-dollar U.S. start-ups, revealed a recent, nonpartisan study from the National Foundation for American Policy.
  • A start-up visa could create 1 million to 3.2 million new jobs over 10 years, according to the study.
  • Silicon Valley faces increasingly tough competition from cities in India, China and France, which are more welcoming to entrepreneurs, they say.

Tension over immigration reform is rising in Silicon Valley. The Supreme Court agreed Monday to let President Donald Trump’s immigration travel ban go into effect for some travelers, reversing the actions of lower federal courts that put the controversial policy on hold. The court agreed to hear the case involving travelers from six Muslim-majority countries and all refugees in the fall, leaving open the chance it could reverse the verdict if challengers can prove it is illegal or unconstitutional.

This is the latest development on immigration policy that some technology companies are concerned about. Another big issue that could deliver a blow to Silicon Valley is the report last week that the Trump administration is reviewing and may scrap the new “start-up visa,” which had been set to go into effect in July. The news leaked out just days after Apple CEO Tim Cook warned Trump at a White House tech CEO meeting that tech employees are “nervous” about his administration’s approach to immigration

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The “start-up visa” proposed by President Obama last August grants foreign entrepreneurs starting businesses in the United States to gain temporary permission to be in the country and receive investment capital from certain qualified U.S. investors.

Trump has made it clear that under his “America First” administration, it will be harder for foreigners to obtain visas to work or travel to the United States. “Extreme vetting” at U.S. borders and Trump’s proposed travel ban has many start-ups with fast-growing international operations concerned. In April the president signed an executive order for a comprehensive review of visa programs that allow U.S. companies to hire foreign workers. The H-1B visa has been a favorite of the tech industry, as it allows U.S. employers to temporarily employ foreign workers in specialty occupations.

The situation has entrepreneurial experts in the region speaking out. “In our politics today, there’s this position being pushed that immigration is bad for America, and that certainly puts [the Silicon Valley] ecosystem at risk,” said Michael Seibel, CEO and partner at Y Combinator, the seed accelerator that has spawned more than 1,450 companies since its founding in 2005, including tech giants Dropbox, Airbnb, Stripe and Reddit.

As Seibel points out, Silicon Valley is a “delicate ecosystem” that is a lot smaller than it seems, he said. Its unrivaled network of entrepreneurs and investors with experience building companies is what enables start-ups to thrive and eventually become giant corporations, employing thousands of Americans.

The California economy has thrived in part because of the influx of skilled immigrants who come from all over the world and build businesses, spend money and buy homes, said Seibel. It’s been a key driver in the state’s technology and innovation prowess.

But the ramifications of clamping down on immigration go well beyond California, he said. States throughout the United States are affected.

Statistics tell the story. According to the Kauffman Foundation, immigrants are more than twice as likely as non-immigrants to start a business. Taking that into account, it’s not surprising that immigrants founded 51 percent of the current crop of billion-dollar U.S. start-ups, a recent nonpartisan study from the National Foundation for American Policy found. A start-up visa could create 1 million to 3.2 million new jobs over 10 years, according to the study.

Today, as start-up meccas are rising around the world, talented immigrants may choose to set up shop outside the United States, Seibel pointed out. Founders are questioning whether America is still as welcoming to immigrants as it has been in the past, and whether they can get to the United States to start a business or even travel here, he said. It’s a daily topic of conversation, he revealed.

“The second we start to make this place less welcoming, the second we start losing our advantage,” said Seibel. “America is participating in a competition for talent. If we change immigration policies and make it harder for smart people to come and stay, we’re going to start losing this battle,” said Seibel.

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