New York Wants To Help More International Students Become Entrepreneurs
International students have few workable options to stay in the United States after graduating, even though most say they would like to do so. Instead, many leave and put their training to use elsewhere, depriving the U.S. economy of a skilled—and often entrepreneurial—work force.
New York state could start chipping away at that problem. Last week, Democratic Gov. Kathy Hochul announced 204 new policy proposals as part of her 2024 State of the State address. The agenda features a section on creating “new avenues for immigrant entrepreneurs,” which will allow certain “graduate and doctoral students…to obtain university-sponsored visas that allow them to continue performing and commercializing research without leaving the state.”
International students earned “more than 44% of graduate degrees in STEM awarded by SUNY in 2020–2021,” it continues. “But many graduates are unable to secure visas and are forced to leave New York and start companies abroad.”
In addition to the university-based visa pathway, Hochul’s plan will involve Empire State Development, a state economic development agency, “offer[ing] competitive grants to research universities and colleges to retain international entrepreneurs who would otherwise be unable to launch start-ups in New York.”
“In the absence of Congress taking action on immigration reform and creating a ‘startup visa,’ states need to know they can create programs like this one as a vehicle for innovation and economic growth,” says Tahmina Watson, an immigration lawyer and author of The Startup Visa. “State-centric immigration policies have to be the way forward.”
Policies that capitalize on the efforts and energy of immigrants could be especially beneficial in New York, which “has seen a steep decline in economic dynamism post-pandemic,” notes Connor O’Brien, research and policy analyst at the Economic Innovation Group. “Its startup ecosystem has fallen behind much of the country.”
“New York is home to a high-quality, affordable public university network that trains so many students with entrepreneurial potential,” O’Brien continues. “Providing more avenues for foreign-born startup founders to stay in-state after graduation and grow their businesses in New York is a win-win.”
Though Hochul’s plan is short on detail, it seems to mirror the Global Entrepreneur in Residence (GEIR) programs that have been implemented around the country. GEIR programs allow universities and research nonprofits to sponsor immigrant entrepreneurs, who would otherwise likely have to try to get an H-1B visa. Demand for these visas far exceeds the annual cap of 85,000, and they’re randomly allocated, meaning many talented people who may eventually become successful entrepreneurs never get their ticket to the United States.
Universities are uniquely positioned to avoid those roadblocks because they’re exempt from the annual H-1B cap. GEIR programs capitalize on that, allowing universities to take on foreign entrepreneurs as employees.
Only a handful of universities have adopted GEIR programs, and several of these initiatives are still young, but they’ve reported some good results. Since 2014, foreign entrepreneurs sponsored by the University of Massachusetts Amherst have started companies that employ nearly 1,700 people and have raised over $1 billion in funding. Eight foreign entrepreneurs based at the University of Michigan have raised $15.6 million in funding since 2019. Other GEIR programs are bringing entrepreneurs to economically depressed cities, including Cleveland and Detroit.
“Research has consistently shown that the foreign-born not just have a higher entrepreneurial propensity,” says Dane Stangler, managing director of strategic initiatives at the Bipartisan Policy Center, “but are also overrepresented among high-tech startups, venture-backed startups, [and] AI startups most recently.”
Stangler cautions that observers should take the available job creation and fundraising numbers with a grain of salt. “It’s one thing to say, ‘Hey, we’ve created X number of jobs, X number of money.’ I don’t necessarily disbelieve that, but it doesn’t appear to me that rigorous, independent, third-party evaluation has been done of that,” he says.
New York may face problems implementing certain aspects of Hochul’s international entrepreneur plan. For one, Empire State Development, which has been directed to offer grants to universities to retain immigrant entrepreneurs, hasn’t exactly been the most effective distributor of economic development funds. Reason‘s Eric Boehm reported in 2022 that Empire State Development threw $750 million in subsidies at a solar energy project near Buffalo, with then-Gov. Andrew Cuomo saying it would create 3,000 jobs. It created just 700.
Startups are inherently risky ventures, and New York’s plan may well shift that risk onto taxpayers. But it’s still a good idea to open up avenues for universities to sponsor international entrepreneurs, getting around a major problem in the country’s high-skilled immigration system. Other localities need not replicate New York’s grant allocation plan, and it remains to be seen how costly that plan will be.
Ultimately, programs like this capitalize on an already-present talent force, in a way that may promote more growth and attract more future entrepreneurs. “Clusters of highly-skilled technical people, and of entrepreneurs in particular, build on themselves, attracting further investment and talent,” O’Brien wrote.
“Leverage what you already have. You already have a lot of potential entrepreneurial talent in your universities,” says Stangler. “What can you do to tie them into the ecosystems? What can you do to tie them into potential employers in those startup ecosystems?”
