Keep international startups flowing to the Bay Area
It’s no secret that the Bay Area is the leading place for technology, innovation and entrepreneurial activity in the nation. Not the only one, for sure, but the largest, richest andmost productive. Its universities are strong and aggressively support entrepreneurship, the region hosts the world’s largest pool of venture capital, incubators and accelerators abound, and an open, entrepreneurial environment attracts and fosters creative talent that drives the economy forward.
This is also an international story. The Bay Area is considered by aspiring entrepreneurs around the world as the ultimate source of inspiration and opportunity. The result is the massive presence of early-stage companies from every corner of the world who come to connect, learn and tap its resources. Many remain to base their companies here.
Europe provides a good example. Hundreds of European startups are here on any given day. At the large accelerators a majority of international startups are European. Entrepreneurs are also supported by an array of private and government-sponsored business services from their home countries. The German Accelerator (which the German government supports), Swissnex (government sponsored with private and university support), Nordic House (a partnership of Scandinavian countries) and Atelier (an ex- tension of the Belgian Chamber of Commerce) are among them. European venture funds and corporate innovation offices (at least 40) are present in force.
This phenomenon isn’t limited to Europe. On a smaller scale, China, Korea, Mexico, Australia, Singapore and other countries have similar facilities that support innovation and entrepreneurial connections.
One explanation is venture capital. Though the startup environment in Europe is improving, in all of Europe there is still only a fraction of the venture capital there is in the Bay Area. The other driver is scale. Many economies aren’t large enough to quickly grow global companies, and the European market — though large — is fragmented by regulatory and cultural barriers. From Silicon Valley, young companies can test both the U.S. and global markets.
When they succeed, everyone benefits. They typically incorporate in the U.S. and move their senior management here to find capital, develop partnerships and grow markets. The Bay Area gains in talent and creativity, and the home country gains through companies that are more successful and employ more people than if they had stayed at home.
Being here comes with challenges. One is visas. It’s easy to pass through on a three-month visa, but building a company takes longer. The United States has no visa designed for entrepreneurs, pushing them away. Legislation to create such a visa has been proposed more than once but languished due to partisan divisions on immigration policy. It faces an even rockier road in Washington’s current environment. In 2016, the Department of Homeland Security proposed an “International Entrepreneur Rule” to let overseas entrepreneurs stay in the United States for an initial 30 months subject to certain benchmarks. Implementation was suspended by the Trump administration, while countries such as Canada are throwing their doors open, hoping to attract the jobs and talent we reject.
An entrepreneur visa or an International Entrepreneur Rule costs us nothing, but would help cement our technology leadership and grow quality jobs at home. Much of our past success stems from being an economy that’s open to creative people and ideas from around the world. As Europe’s presence here demonstrates, this model works. But as competition for talent grows and innovation becomes the benchmark for success, we need a clearer focus on how to retain that competitive edge.