Startup Act 2.0: Is Immigration Reform Vital in Moving Innovation Forward?

    June 17, 2012
    Abby Johnson
    Comments are off for this post.

With the economy weighing heavy on everyone’s mind this election season, legislators are hoping it will help them pass a new initiative. The bill is called Startup Act 2.0 and is designed to spark new businesses and jobs.

What does the U.S. need to spur the economy? Is legislation geared toward startups the answer? We’d love to hear your take in the comments.

Although President Obama already signed the JOBS Act into law this year, Startup Act 2.0 is said to be an extension of it. The Jumpstart Our Business Startups Act focused on simplifying the funding and regulation processes that small businesses and startups must go through and, specifically, introduced the concept of crowdfunding.

Startup Act 2.0, however, builds upon these principles but also opens the door on immigration reform. As WebProNews reported when the bill was first introduced to the Senate, it would bring about the following provisions:

  • Creates a new STEM visa so that U.S.-educated foreign students, who graduate with a master’s or Ph.D. in science, technology, engineering or mathematics, can receive a green card and stay in this country where their talent and ideas can fuel growth and create American jobs. It also creates an Entrepreneur’s Visa for legal immigrants so they can remain in the United States, launch businesses and create jobs, and eliminates the per-country caps for employment-based immigrant visas, which hinders U.S. employers from recruiting the top-tier talent they need to grow.
  • Makes permanent the exemption of capital gains taxes on the sale of startup stock held for at least five years, so investors can provide financial stability at a critical juncture of firm growth. It also would create a targeted research and development tax credit for young startups less than five years old and with less than $5 million in annual receipts. This R&D credit is designed to allow startups to offset employee taxes, freeing up resources to help these young companies expand and create jobs.
  • Uses existing federal R&D funding to better support university initiatives designed to bring cutting-edge R&D to the marketplace more quickly, where it can propel economic growth.
  • Requires government agencies to conduct a cost-benefit analysis of proposed “major rules” with an economic impact of $100 million or more. This new requirement will help determine the potential impact of proposed regulations on the formation and growth of new businesses.
  • And Startup Act 2.0 directs the U.S. Department of Commerce to assess state and local policies that aid in the development of new businesses. Through the publication of reports highlighting these “best practices” from across the country, policymakers will be better equipped to encourage entrepreneurship by adopting the most effective and successful policies.

The immigration aspect of the bill is certainly significant, especially since the subject has been so controversial in Washington. Startup Act 2.0 would bring two new types of visas to the U.S., one of which would give an additional 75,000 student visas in STEM (science, technology, engineering, and mathematics) fields the opportunity to go above the 50,000 H-1B cap. The second new visa category is for entrepreneurs that start businesses in the U.S. and obtain $100,000 in funding.

“In terms of the human capital equation and addressing immigration, it’s really a pressing priority for the industry and something that needs to be addressed,” Kevin Richards, the Senior Vice President of Federal Government Affairs at TechAmerica, tells us.

TechAmerica is a strong supporter of Startup Act 2.0 and the immigration reform that it would bring because, according to Richards, this “human capital” has been the U.S.’s “greatest advantage” over the rest of the world.

“The great success of this country has been its ability to attract talent from around the world and to have free innovative ideas to invest in a capital system,” he said.

Richards is fearful though, since new research indicates that the U.S. is falling behind in the global race for talent. The Partnership for a New American Economy found that, by 2018, there could be a shortfall of as many as 230,000 qualified science, technology, engineering, and mathematics workers.

Data from Partnership for a New American Economy

AOL Co-founder Steve Case, who is also one of the members of President Obama’s Council of Jobs and Competitiveness and an advocate of Startup Act 2.0, made an interesting comparison about the current immigration/education system in the U.S. in a post he wrote on TechCrunch:

Imagine if we trained men and women at our Air Force and Naval Academies, equipped them with the tools they need to lead and succeed in battle, and then kicked them out of our country to join other militaries? In effect, that is what we are doing when we train the world’s most talented immigrants to innovate and start businesses at our great universities, then send them off to start companies in China, India, and South Korea.

“We really have now more of a fortress mentality approach where we have the best and brightest universities in the world, but we send these students back home to our foreign competitors,” added Richards.

“If we don’t do something now,” he continued, “we risk our future and our future competitiveness in innovation.”

At this point, nearly half of the venture-backed companies in the U.S. have had at least one immigrant founder. What’s more, some of America’s biggest technology brands, including Google, Apple, and IBM, were also founded by either an immigrant or a child of an immigrant.

But, according to Richards, these trends could change if the U.S. doesn’t lift its current caps. For instance, the H-1B cap is typically filled in one day. As a result, he believes that, if the U.S. fails to act now, technology giants will begin to appear overseas.

“The pace of innovation is something we really have to be concerned about,” said Richards. “We’re hopeful that this bill will unleash new innovation and creativity in our sector.”

Still, there are some who believe that Startup Act 2.0 doesn’t do enough to encourage entrepreneurs. Richards, however, points out that it is a “good first step” in the right direction.

While an election year is not normally a good time to get a bill passed, the economic elements this bill proposes could help it.

“The economy is gonna be the top issue on the minds of voters in the 2012 election,” explained Richards, “and if they [legislators] want to have a record to run on and to demonstrate what they’re doing here in Washington, this would be a great first step.”

The bill has been introduced in both the Senate and the House, and the hearings over it are expected to begin soon.

Is immigration reform necessary to reviving the American economy, and is this bill an effective strategy for it? Why or why not? Let us know what you think.

  • john miano

    You would think that when a bunch of lobbyists produce a marketing campaign, the media would ask “What are these guys not telling us?”

    It rarely happens though.

    Lobbyists make the claim there will be “X jobs in 6 years.” How would you know?

    Look at the chart. There will be 555,200 holders of STEM ADVANCED DEGREES in 2018. They know that down to the nearest 200. There will be 779,000 STEM job openings. That’s apples and oranges. Most stem jobs (and nearly all outside academia in engineering) don’t require an advanced degree. They’ve subtracted the apples from the oranges and gotten a shortage.

    Is the American media capable of critical thinking these days?

  • Dave Francis

    The only avenue that will bring to a halt illegal immigration is for all American voters to demand that a mandatory “Legal Workforce Act” Commonly known as E-Verify (H.R. 2885), if expedited through Congress. The Republicans amplify that they want to help American labor, so tell me why by House speaker, John Boehner (R-OH) and Dave Camp, ranking Chairman of the influential Ways and Means Committee are placing obstacles to stop E-Verify being enacted? Simply put, under this intentionally dormant law, that if implemented nationwide millions of illegal aliens will recognize the pointlessness of searching for a job. The electronic computer program accesses two major databases, Homeland Security and Social Security Administration, which has a 99.5 percent rate at flagging foreign workers. E-Verify has expanded its information sources to include driver’s license records, which strengthens the reliability of the program. E-Verify has been collecting driver’s license information since June 2011, for employees who present a state-issued driver’s license. Applicants for jobs will notice new screens that support this change, which further detects unauthorized job seekers. As some states have repudiated E-Verify, American citizens as voters must call Congress and demand from the spineless lawmakers to press ‘THE LEGAL WORKFORCE ACT’ be passed-and be expedited. Even ‘The Pew Hispanic Center’ estimated that 8 million illegal aliens attained American jobs in 2010, even as 20 million unemployed and underemployed citizens/legal residents sought after work.

    When the Obama administration temporarily enforced immigration laws with worksite raids throughout the last years of the Bush administration, Americans lined up to take those jobs, even before the economy downturn. The raid at Swift Meats, Colorado 2006, and the line of applicants eager to fill jobs vacated by illegal workers was “out the door”. After the raid at Smithfield Foods, North Carolina 2007, blacks again became the majority of workers, and after 16 years of struggle, workers were finally unionized. Multiple times illegal labors in numerous industries, after ICE raids thousands of legal workers have been hired. Saying that Americans won’t do those jobs is ludicrous? But Americans couldn’t get these worker’s until the government enforced our laws. Many newspapers reporters spotlight on illegal alien neighborhoods, feeling “under attack” and “distraught” after enforcement operations, recounting enforcement legislation as “tough” and “anti-immigrant”, and they generally disregard the advantageous effect of enforcement on birthright workers, lawful immigrants, and refugees who rapidly arrived to those jobs after ICE had left.

    The highest jobless rates currently are among unskilled African American and native born Hispanics with the seemingly skilled experience as most illegal alien job seekers. Well educated Americans, as the newspaper editors, pundits and legislators, corporate who incessantly call for “fixing” a broken immigration, is in by awarding themselves by beneficial legalization schemes, and are not in best interest of U.S. labor. They have the resources to hire immigrants to clean their houses, mow their lawns and babysit. And they’re unconscious to the dissimilarity between who hires and who has to compete for few jobs.

    Then we have the consortiums in the giant agricultural and the farmers, who have inroads in to Congress, and lobbying advocates who has created for their industry a guest worker program (the H-2A visa). The agricultural organizations have no limit on the number of workers a business owner can sponsor. Employers prefer illegal workers because it’s less paper work or have to pay the minimum wage, overtime, sick pay, observe safety rules, provide housing, or pay social security taxes. Illegal workers are amazingly obedient, and their company owners have a large benefit over competitors who play by the Department of Labor regulations. These noxious farmers have the advantages by the protection of federal policies, that recurrently awarded by decades of administrations who scorn the law, with so called “comprehensive” immigration legislation that the Liberal press promotes.

    The Pew Hispanic Center, have reported that only 4% of illegal migrants work in agriculture. While the larger majority have taken jobs in construction, janitorial, manufacturing, food preparation, entertainment and other services. Are we to believe that Americans don’t want these types of jobs? In a Bureau of Labor Statistics, the majority of workers in each of those fields are native born, but it less obvious jobs not seen through the public eye, this is far from the truth. Behind the façade of Las Vegas for instance, is a very high number of foreign national working in jobs, American should have. Hundreds of thousands of illegal workers have flooded those labor markets and driven down wages. And that’s why President Clinton’s U.S. Commission on Immigration Reform advised Congress to reduce legal immigration and strictly enforce laws at the worksite, not more legalization schemes. Barbara Jordan, Chair for U.S. Immigration Reform stated in February 1986, “It is both a right and a responsibility of a democratic society to manage immigration so that it serves the national interest.” Her position on immigration cited by opponents of current US immigration policy who cited her willingness to sanction employers who violate US immigration regulations, to tighten border security, and to oppose amnesty or any other pathway to citizenship for illegal immigrants.

    Second in line for rapid enactment should be the ‘Birthright Citizenship Act (H.R.140), is possibly the most financially devastating hundred billion dollar cost that effects taxpayers. This is definitely a piece of law that must be amended. Both laws are gathering dust and only by the force of voters, will these pieces of legislation resurface again. If Both Republicans and Democrats fail to bring these bills to a floor vote, then the latter should specifically take a ride to the U.S. Supreme Court, as it’s never been judged constitutional or otherwise? Annually 400.000 mostly unborn children are smuggled into American through airlines and regions of the border, so the Mothers can then gain from an injudicious statute achieving instant citizenship for their baby. Only Canada and United States amongst the industrial nations have allowed this commitment to continue? The law must be changed, so that one parent must be a citizen, before the child can become a citizen?

    Bar none these urgent immigration bills will not come to maturity, without the sponsorship of politicians and you the voter? Also consider that the TEA PARTY is a very substantial political organization, very much more moderate to the either the Democrats or Republicans and more supportive of the doctrines of the U.S, Constitution. Years of planned encouragement by both political parties, has erupted in a major response from anti-illegal alien organizations, including NumbersUSA, Americans for Legal Immigration (ALIPAC), The Heritage foundation, The Federation for Immigration Reform(FAIR), Judicial Watch and thousands of more groups, blogs available to all avid readers across the web. Let your Senator or Congressman/Women know how you will vote, by giving your name to the politician’s aides and that you want them to sponsor E-Verify and the Birthright Citizenship bills. Phone the Washington DC. , Switchboard at 202-224-3121. BOTH OBAMA AND ROMNEY HAD BETTER TAKE NOTE, AS MILLIONS OF AMERICAN VOTERS FROM EVERY WALK OF LIFE IS JOINING THE TEA PARTY. In addition demand also that your state adopts a voter ID law, so no non-citizens, illegal aliens, felons or even deceased people are removed from election rolls for pending elections, including the Presidential vote. Whether it’s Florida or any of the other 50 states, non-citizens voting in an election, compromises the integrity and trust of the system.

    Incidentally, do the church and every denomination want to pay the way for every illegal alien, who snubs our laws and enters this country? Perhaps the Church hierarchy is in agreement with Sen. Harry Reid of Nevada, which illegal aliens can steal from taxpayer’s $4.2 Billion dollars child tax credits, when the majority of their offspring live across our Southern border somewhere. However, you try cheating the IRS and the will be auditing you and down upon you like a ton of bricks? The left keep on spilling rhetoric about that illegal aliens are great for the economy, but in truth annually states spend $120 BILLION on their hospital treatments, which are supposedly emergency care. But they turn up with everything including a common cold. Education is not even part of this growing financial enigma, or the complex world of welfare as the phenomenal number of ‘foothold’ babies, given instant citizenship have the same rights as a U.S. citizen, which the parents use to their own advantage. Even the thought of a path to citizenship that the millions would receive, costing the United States taxpayer a projected cost of $2.6 Trillion in your money as studied by FAIR and the Heritage foundation.

    If you want to read the truth about the lawlessness and carnage along the border, then bookmark the ‘AMERICAN PATROL’ website. Investigate other headlines today such as ‘Rep. Steve King rebuffs Rubio and Rivera DREAM Act proposals, Should counties bear the financial burden of criminal aliens? Mexican cops discover human slaughterhouse in truck, Holder offers documents to avert gun probe contempt vote, Omnibus Bill: Canadians protest North American Union agenda, Spanish graduation speech enrages community, A Message from World War II–Still fighting for America. American Patrol is a current exposure of the nationwide E-media and newspapers, for rural, national, blogs and commentary of the Liberal party, which keeps concealed facts. Daily the truth is revealed about illegal immigration and the corruption in Washington and state assemblies.

    In close races there is an ever present danger in even the most minor of municipal elections, specifically in states with millions of illegal aliens like the Sanctuary state of California, Nevada and New York. Absentee ballots are particularly vulnerable as nobody has to arrive at the voting booth in person, but is counted from a piece of paper that can be forged. This November will be extremely prominent election for President, as it means the loss of our sovereignty under Obama, and his administration ignoring the doctrines of the U.S. Constitution. Americans must insist on strict oversight of the voting booth, as many states have no serious restrictions during the election cycle. This is not voter repression that the special interest organization likes to crow about, but the growing need for voters to possess some form of government ID, so all those eligible have a fair and equitable in the voting cycle.

  • Emma

    The importance of STEM/Startup visa reform cannot be overestimated, however, there are many other equally deserving stakeholders (and voters) who want and need immigration reform urgently,(farmers, the travel and hospitality industry,construction, the Dream Act kids, to name a few).

    That is why there will be no Startup Act passed as a stand-alone bill. Tell your Congressmen that if they want your votes, they should support comprehensive immigration reform asap.

    • http://www.motorcarsfinancial.com Brad

      BS Emma, get rid of all of these immagrant workers ASAP, stop handing out food stamps and paychecks to abled Americans. Let them starve or take these jobs.

  • Sid

    So what I’m hearing from this is that the wonderful colleges and universities cannot produce a competent workforce from the base of people that are already American citizens. We have poured billions of dollars into an education system that cannot prepare the next generation of Americans. Amnesty doesn’t solve the fundamental problem of lazy, entitlement mentality, and poorly educated young people in this country.

    I have watched the decay over the past 25 years. Big government and big business is isolated from the real world in their concept of a one world order. This country is on the threshold of financial disaster do to the lack of intellectual resource development at the lowest common denominator. When individuals can’t even balance their checkbook or manage their expenses; how in world can they become innovators!

    The lack of this common knowledge at the highest levels of government and business have promoted the outsourcing of jobs, expertise, and the “dumbing down“ of the greatest country on earth. America became great because of the moral and work ethics of its people. Government, the media, the family structure and mind robbing tech toys have been the source of the children growing up without a clue about their purpose in life. We have become a country focused of political correctness, protecting self esteem, promoting unmanageable entitlement, emotional decisions and inflated egos.

    The solution doesn’t come from a broad bush “comprehensive immigration reform” better known as Amnesty. The solution is comes when you take a look at the fundamental elements that made the country what it used to be. These elements are a positive work ethic, fundamental education, pride of country, pay based on contribution, cost based on value, leaders with integrity, and every person with a sense of purpose.

    • http://www.motorcarsfinancial.com Brad

      You are 100% correct. This political BS by Obama is nothing but a straight B-Line to amnesty for all immagrants. He will begin paying 100’s if not thousands of dollars per immagrant to bus loads accross the border for votes. Watch this traitor we have in the WH carefully in your sights. Lock and load! One shot, one kill!

      • Drape

        It’s a shame so called good Americans don’t even know their country’s history.
        European settlers came and occupied America illegally. Most of the Native Indians were nice enough to allow it. The Europeans were friendly with the natives at first until they outnumbered them, then time to eradicate.
        Same story when Texas belonged to Mexico. Mexico was nice enough to allow Anglos to immigrate without restrictions. Eventually the Anglo immigrants outnumbered the Mexicans in Taxas and time to declare independence.

        Most of our European ancestors were poor SOBS who came by the boatload.

        Are you people hypocrite, ignorant or just choose to ignore facts because you just don’t like them.

        • Sid

          Drape… Were not talking about cowboys and indians here! The basis for this article and presidential end run was to load the liberal voter roles with illegals not rocket scientists! Purely arrogant and political…

          You don’t have to worry about being out numbered, we currently have a president that is enacting one tyrannical executive order after another. You just might be one of those “Poor SOBS” if he has his way. Suggest you look at his alignment with “Agenda 21” if you doubt it!!!

  • Andy

    You should be looking for Inventors to allow into the country it is after all their ideas that make the money.
    Take me for example. One invention makes £12 million profit per month another makes £2 million per month. Sure the businessmen take it forward but the Inventor is the person you should actively encourage to come to the USA.

  • Craig

    Startup Act 2.0 makes much more sense that Obummer’s obvious political pandering to Hispanics in order to get their votes.

    If I understand Startup Act 2.0 correctly, unlike the current immigrants from south of our borders, the students with advanced degrees that would qualify have paid their way though college, rather that milking the American system.

  • Ken

    I’m not surprised at an article like this. Clearly, the author and any business asking this question is clueless or a socialist.

    Obama and the socialist agenda have been targeting small businesses for quite some time.

    Immigration reform? First, it’ll never happen other than seeing Obama and other giving amnesty and effectively helping illegals rather than Americans. Obama’s recent move is pure politics because he’s desperate and the fall election isn’t looking good for him.

    Last year I read an article about the continuing loss of high tech jobs to Asia.

    There is no problem with innovation in the US. There is a problem with the outrageously poor quality of education in the US thanks to liberal/socialist control of the education system. American kids cannot compete as well as those educated outside the US in places where education has not been dumbed-down. The whole idea of no child left behind as it applies to education is a liberal joke.

    Yes, liberals/leftists/socialists and Marxists want nothing more than to drag down the US. They want the US to be like Western Europe.

    To the author of this leftist garbage: Pull your head out.

    • Denny Crane

      Who has been in control of our education system for the last 10 years , mostly the GOP and Bush’s law that screwed things up worse than ever before. As far as immigration Illegal means Illegal , they should all be sent packing , anchor babies included. Remove the Billions from each state and the FED that goes to the Illegals ( housing, food stamps < medical, Schooling, Bi-lingual teachers etc. ) and we cut the inherited deficit almost in half. Then with all the illegals gone maybe fair wages come back and there should be more job opportunites for everyone.

      • Sid

        Why don’t we keep blaming Bush… that continues to be the liberal montra for everything. Education is a mess because it is filled with administrative bureaucrats. Many of the people that teach have never worked in jobs outside a school. Then you have the unions that prevent incompetent teachers from being fired unlike an employee that fails to do their job in the private sector. Good teachers are trying to carry the dead wood and the burdens of over priced administrators. Then you have the entire issue of sports performance getting more recognition than academic performance. I can go on and on about the problems in schools as I taught 2nd year college Electronics courses where students couldn’t do basic algebra. Wake up and understand that education in this country has been destroyed by liberal, politically correctness at every level.

    • Sid

      You got it Ken!!

  • John

    The socialist propaganda is so out in the open now.

  • http://www.keithjamesdesigns.com Keith James

    This is so off target it is ridiculous. It does absolutely no good for small businesses. The government bailed out the banks and left small business owner high and dry. Just imagine if the billions of dollars we spent bailing out the banks was split between low interest loans for businesses and homeowners. Our economy would be booming and most of all there would be considerably higher consumer confidence.

  • http://cass-hacks.com Craig

    The immigration portion of the bill is just another way to say that the administration considers the brain-trust existing in the US to be bankrupt and in need of an external stimulus package.

    Good idea! Import business, teach it how to operate within the business environment within the US and then watch as they take their companies back home.

  • http://www.danielbogogolela.wordpress.com daniel

    i think anyone with talent should be given a chance.

  • John

    There aren’t enough jobs for the legal people here already, and now they will add another 800,000 to take any new jobs that come along. I think we need to put a hold on immigration until our country gets things back to normal, we just don’t have enough jobs to go around right now.

    • Sid

      When you pay people more not to work than they’re paid if they did something constructive… guess what you get. Anyone drawing money for unemployment should be required to pick up trash for 20 hours per week at 75% of minimum wage… thus there is an incentive to be more creative, innovative, and appreciative. Jobs are available if you really want one!