Work by Dan Wang, Lambert Family Professor of Social Enterprise; Jorge Guzman, Gantcher Associate Professor of Business; and PhD Candidate Inara Tareque, shows that high-skilled immigrants, even without launching their own ventures, significantly boost regional entrepreneurship—especially in diverse communities—by driving knowledge-sharing, innovation, and economic vitality.
CBS: What is the major finding of your research?
Inara Tareque: Instead of being a net negative and taking away jobs from the local population, immigrants are actually a net positive and enhance job creation. The effect is stronger when immigrants move to cities with a larger presence of other individuals from their country of origin.
Our work shows that knowledge transfer, whereby individuals feel comfortable to share their expertise, ideas, is the reason behind this positive impact of high-skilled immigration on regional entrepreneurship.
CBS: How are your findings especially timely right now?
Dan Wang: There’s a lot of uncertainty about what the Trump administration stands on high-skilled immigration will be. On the one hand, there might be more high-skilled immigration due to the promise of, say, green cards that was floated for foreign students in the United States. On the other hand, there are proposals for restricting high -skilled immigration, and that is putting a lot of business leaders on edge.
We are currently in a period of de-globalization, but de -globalization doesn’t necessarily just mean extricating the United States from global supply chains. It also means thinking about what to do about global talent who are meshed in those global supply chains as well.
CBS: Why do some regions benefit more from high-skilled immigration than others?
Inara Tareque: Regions are more able to benefit from the immigration of high-skilled workers when these regions have a larger presence of other immigrants from the same country of origin. Immigrants feel more comfortable to share their new knowledge and ideas with others around them when they have a cultural familiarity and a share of trust with others around them.
CBS: What are the biggest challenges business leaders face if high-skilled immigration is restricted?
Dan Wang: Firstly, there’s going to be a loss of productivity. A lot of these high-skilled immigrants work in American companies, so if they all of a sudden are not there to fill those positions, then productivity will decrease.
Secondly, business leaders might face increased labor costs. Typically what happens is that when businesses lose out on high-skilled labor from abroad, they incur the cost of actually having to set up an apparatus for offshoring those jobs as well.
A third risk is that there might be a decrease in the pace of innovation as well. A lot of these high-skilled immigrants work in positions that enhance competitiveness in research and development.
CBS: How can high-skilled immigration policy hurt hiring?
Jorge Guzman: Conceptually, when we think about high skilled immigration, it is about wanting to hire a worker and a worker wanting to work for that company. In fact, what high-skilled immigration policy does is stand in the way of some of those transactions, allowing some of that hiring to happen and some of it not to happen. That is why the argument for high-skilled immigration is often so persuasive, because it is clear that at least for this hypothetical company the hiring would be beneficial.
Read the full article by Dan Wang, Jorge Guzman, Inara Tareque / Columbia Business Insights
