Current immigration laws hamstring U.S. economy, tech industry says

Tech industry says Congress needs to do more to allow highly skilled foreigners to live and work in the U.S.

The presidential orders on immigration Thursday night offered little relief to the nation’s technology industry, with company executives, venture capitalists and lobbyists expressing frustration that Congress hasn’t moved to improve the processes that would allow more highly skilled foreigners to live and work in the U.S.

Tech industry leaders have long complained about a skills gap in the U.S. workforce they say makes it difficult to fill technical positions. Their key concerns include the current cap on the number of H-1B work visas issued each year, the complicated and red tape-wrapped process of obtaining a green card, and the lack of a direct path from a student visa to a green card.

“The caps that are put on visas are a huge burden for us,” said Shan Sinha, co-founder and chief executive of Silicon Valley start-up Highfive. “We need to grow three times over this next year, and given that we have a shortage of qualified people here in the country and we can’t hire the people who are very well qualified from outside the country, it means we’re artificially capped in our ability to grow.”

Sinha believes the current system puts start-ups at a disadvantage because they don’t have the resources that tech giants like Microsoft and Google have to secure the visas when they become available. Only 65,000 H-1B visas are issued each year, the majority of which are snapped up by large corporations weeks after being made available, Sinha said.

“Every October, the cycle begins again,” said Gil Elbaz, founder and chief executive of Los Angeles start-up Factual. “Large companies that have large legal staffs dominate the process and quickly use up the quota. If you’re not on the ball, you have to wait another year.”

This wait isn’t just hurting smaller companies. Tech lobbyists and venture capitalists believe it’s hurting the American economy.

Paul Maeder is a partner at venture capital firm Highland Capital Partners, which invests in Silicon Valley companies like Leap Motion, Jaunt and Scopely. He told The Times that the difficulties associated with getting foreign workers into America has caused his companies to outsource big pieces of their software to workers in Eastern Europe and Asia.

“We’re essentially spending our money building assets that we don’t control outside the country, and it often ends up competing with us,” Maeder said. “This is a very sophisticated way of shooting ourselves in the foot.”

Congressional action is required to change H-1B visa caps.

The president’s address did bring the tech industry some good news, with the announcement of plans to expand and extend the use of the existing Optional Practical Training program for foreign students studying science, technology, engineering and mathematics at U.S. universities. The current program allows recent foreign graduates to work in the U.S. for up to a year to get training in a field that complements their studies.

The expansion of the program could alleviate some of the immediate demand for domestic workers in the fields of science and tech, giving start-ups and larger corporations a greater pool to hire from. But even this is seen by some as only a Band-Aid fix to a bigger problem.

There is currently no way for a foreign student studying in the U.S. to go from a student visa to a green card; the path to a green card requires the student to get an H-1B visa. So even if tech companies can hire more recent foreign graduates, they eventually come back up against the H-1B visa shortage.

“There’s no dual intent for students,” said Scott Corley, co-founder of technology and policy consulting firm Corley Pipes and former director of government affairs for Microsoft. “They make a promise when they come to school in the States that they won’t apply [for a green card]. We need the State Department to change the dual intent standard so that we can have students never have to go onto a temporary visa, and go into the green card line. We need that early adjustment, and we need the Optional Practical Training to extend long enough for the green card to become a reality for them.”

Without these changes, Corley said, the U.S. is experiencing brain drain that could hurt the economy when students who are trained in the U.S. return to their home countries to start competing companies. “That’s the danger,” he said, “that more will choose to build outside the U.S.”

Tech industry groups like the Communications Workers of America and the Information Technology Industry Council (ITI) said the president’s reforms were a good start, but the groups also reiterated the need for congressional reform.

“While we appreciate the president’s efforts to address the problems in our employment-based system and look forward to further details,” said Dean Garfield, president and chief executive of the ITI, “it is disappointing that neither he nor Congress have been able to seize the opportunity to accelerate economic growth by fixing our broken immigration system.”

Twitter: @traceylien

Times staff writers Russ Mitchell, Tiffany Hsu, Paresh Dave and Sarah Parvini contributed to this report.

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