Duke study

Date: Wednesday, January 10, 2007 3:40 PM

<<<<< JOB DESTRUCTION NEWSLETTER No. 1621 -- 1/10/2007 >>>>>

Lately a slew of articles are appearing in the mainstream media implying
that without the entrepreneurs from India, Taiwan, and China our high-tech
industries would disappear, and Silicon Valley would become a ghost town.
They base these fallacious conclusions on a new study from Duke University.
You can see the study by clicking this link:

http://memp.pratt.duke.edu/downloads/americas_new_immigrant_entrepreneurs.pdf

To sum it up, this is their conclusion:

We found there was at least one immigrant key founder in 25.3%
of all engineering and technology companies established in the
U.S. between 1995 and 2005 inclusive.

All of this leads to the conclusion that we need to make it easier for
foreign students to stay in the United States because without them, we
wouldn't have computers, microprocessors, and internet search engines. This
is a sales pitch for instant green cards and for more H-1B visas.

The key to maintaining U.S. competitiveness in a global economy
is to understand our strengths and to effectively leverage these.
Skilled immigrants are one of our greatest advantages.

The study cleverly avoids calling these foreign whiz-kids H-1Bs or green
card holders and opts for diversity-talk phraseology. The phrase "immigrant
non-citizens" is used instead of H-1B visa holders, and "immigrants who
became citizens" or "naturalized citizens" is used for those that came here
on employment based green cards (EB3).

The press never questions whether this study is scientifically valid
because it confirms their preconceived notions that our high-tech
industries cannot survive without the better educated geniuses from foreign
countries. The most important thing to notice when looking at the "study"
is that it's merely a telephone survey that was made by calling corporate
PR and HR departments. It says so right up front, but of course reporters
probably never get past the introductory pages with the glossy pictures.

Does this methodology sound like science to you?
(page 8)

Our research team then made thousands of unsolicited phone calls
to these companies. We asked whether one or more immigrant key
founders had established the company and if so, what their
nationality was. This became the source of the data presented
in this report.

If all of this sounds fishy to you just wait, it gets worse! There is an
abundance of hyperbole about the brilliant entrepreneurs from India, China,
and Taiwan that should make you suspicious -- unless of course you are a
journalist for the Mercury News or Washington Post!

We found that from 1995 to 2005, Indians were key founders of
15.5% of all Silicon Valley startups, and immigrants from
China and Taiwan were key founders in 12.8%.

Now let's look at a list of students at at Duke who did the telephone
survey.

Some of their info can be found at this page:
http://memp.pratt.duke.edu/people/current.php

Ramakrishnan Balasubramanian: Hometown: Mumbai, India
Pradeep Kamsali Hometown: Hyderabad, India
Nishanth Lingamneni Hometown: Hyderabad, India
Chris Morecroft Hometown: Georgetown, Ky, USA
Niyanthi Reddy Hometown: Hyderabad, India
George Robinson
Batul Tambawalla Hometown: Bombay, India
Mark Weaver
Zhenyu Yang Hometown: ChongQing, China

OBVIOUS CONCLUSION: Based on who did the telephone survey, the only real
surprise is that they didn't conclude that Indians are responsible for
every technological innovation in the history of mankind. Instead they made
a more modest claim by giving China the #2 spot, perhaps to appease Zhenyu
Yang.

If we are to consider all of the bias in the study, let's not overlook the
fact that Vivek Wadhwa and AnnaLee Saxenian were the brainchilds behind
this sham. Wadhwa is one of the often quoted gurus of outsourcing and
Saxenian is the queen of sham studies on outsourcing and H-1B. You can read
more about the shenanigans of these two by searching the newsletter
archive.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.pratt.duke.edu/news/?id=829

Skilled, Educated Immigrants Contribute Significantly to U.S. Economy
January 4, 2007
Note to Editors: "America's New Immigrant Entrepreneurs" is available
online.
Durham, NC -- Immigrant entrepreneurs founded 25.3 percent of the U.S.
engineering and technology companies established in the past decade,
according to a new study from Duke University. What's more, foreign
nationals -- those living in the United States who are not citizens --
contributed to an estimated 24.2 percent of international patent
applications in 2006.

The study, conducted by a student research team at Duke's Master of
Engineering Management Program, brings new context to the nation's
immigration debate. Until now, much of the discourse has focused almost
exclusively on unskilled laborers who cross the U.S. border illegally,
primarily from Latin American countries. The team is providing its project
results online to contribute to the overall national discussion.

"To sustain our economic and global competitiveness, America needs to focus
on its many strengths. One of these is our ability to attract and
assimilate the world's best and brightest," said Vivek Wadhwa, executive in
residence at the Pratt School of Engineering's Master of Engineering
Management Program. Wadhwa himself is an immigrant who has co-founded two
technology companies.

The Duke research team of 18 students from the Master of Engineering
Management Program was led by Wadhwa, research scholar Ben Rissing and Gary
Gereffi, director of the Center for Globalization, Governance &
Competitiveness and a professor of sociology at Duke. The team was assisted
by Dean and Professor AnnaLee Saxenian of the University of California,
Berkeley. The study builds on research Saxenian published in 1999 that
focused on the development of Silicon Valley's regional economy and the
roles of immigrant capital and labor in this process.

The team contacted thousands of engineering and technology companies
founded between 1995 and 2005 to determine if the CEO or lead technologist
was an immigrant, and to determine that person's national origin. More than
2,050 companies participated in the telephone survey.

The researchers found there was at least one immigrant key founder in 25.3
percent of these companies. Together, the study report says, this pool of
immigrant-founded companies was responsible for generating an estimated $52
billion in 2005 sales and creating just under 450,000 jobs as of 2005.

Almost 26 percent of all immigrant-founded companies in the past 10 years
were founded by Indian immigrants. Immigrants from the United Kingdom,
China and Taiwan contributed to 7.1 percent, 6.9 percent and 5.8 percent of
all immigrant-founded businesses, respectively.

These immigrant-founded businesses were unevenly located across the
country. California and New Jersey represented hot spots for
immigrant-founded engineering and technology businesses; Washington and
Ohio possessed relatively low percentages of immigrant-founded businesses.

Some immigrant groups displayed tendencies to start businesses in a
particular state. For example, 81 percent of businesses founded by
immigrants from Taiwan were located in California.

The Duke team also did a special analysis of two tech centers -- Silicon
Valley, Calif., and Research Triangle Park, N.C.

The researchers found that over half (52.4 percent) of Silicon Valley
startups had one or more immigrants as a key founder, compared with the
California average of 38.8 percent. A comparison with Saxenian's 1999
findings shows that the percentage of firms with Indian or Chinese founders
had increased from 24 percent to 28 percent by 2006. Indian immigrants had
also outpaced their Chinese counterparts as founders of engineering and
technology companies in Silicon Valley.

In Research Triangle Park, 18.7 percent of startups surveyed had an
immigrant as a key founder, compared with the North Carolina average of
13.9 percent. Indians constitute the largest immigrant founding group, with
25 percent of startups, followed by immigrants from Germany and the United
Kingdom, each with 15 percent.

"In places like Silicon Valley we see the compounding impacts of immigrant
social and technical networks," Saxenian said. "As foreign-born engineers
start businesses, they collaborate with former classmates and colleagues
from their home countries -- sharing the business contacts and know-how as
well as market information that support entrepreneurial success. Successful
entrepreneurs not only contribute to the regional economy, but also become
powerful role models and mentors, attracting subsequent generations of
immigrants to the area."

To understand the intellectual contribution of skilled immigrants, the Duke
team analyzed the World Intellectual Property Organization Patent
Cooperation Treaty database for international patent applications filed in
the United States.

The researchers estimated that foreign nationals residing in the United
States were named as inventors or co-inventors in 24.2 percent of such
international patent applications in 2006. This percentage increased
dramatically from 7.3 percent in 1998. This count does not include
immigrants who became U.S. citizens before filing a patent application. The
largest group of contributors was of Chinese origin. They were followed by
Indians, Canadians and British.

"The contributions immigrants and foreign national residents are making to
our economy -- and particularly to science and technology -- are well
recognized and this report is a start at documenting the statistics of
those contributions," said Kristina Johnson, dean of Duke's Pratt School of
Engineering. "The United States has a long history of welcoming
international students and entrepreneurs -- and has benefited greatly as a
result.

"Looking at this research from the perspective of the U.S. educational
system, the study continues to reveal challenges facing our K-12
educational program," Johnson said. "As the economies of other nations
improve, more immigrant non-citizens living in the United States may choose
to repatriate. Given the large percentage of high-tech companies started by
these individuals, the nation may be forced to look more and more to
domestic students for continued innovation. Without dramatically improving
our pre-college science and technology preparation, the United States risks
losing its competitiveness in the future global economy."

The Master of Engineering Management team led by Wadhwa has been
researching the impact of globalization on the engineering profession and
U.S. competitiveness. In December 2005, the team published a study that
countered the assertion that India and China were graduating 12 times the
number of engineers as the United States. A subsequent study published in
2006 analyzed the experiences of companies engaged in outsourcing and found
that the key factors in outsourcing were cost and proximity to markets --
not a skills shortage in the United States. Both studies are available
online at .

Students contributing to the study include Ramakrishnan Balasubramanian,
Pradeep Kamsali, Nishanth Lingamneni, Chris Morecroft, Niyanthi Reddy,
George Robinson, Batul Tambawalla, Mark Weaver, Zhenyu Yang, Gloria Gyamfi,
Laura Higbie, Amanda McCain, Marine Raoux, Anand Sankar, Chuntat Tan,
Payman Tayebi, Rachel Wu and Tarun Wadhwa.

Mark Lavender of Neopatents, Raleigh, N.C.; John P. Harvey in Canberra,
Australia; and the Duke Statistical Consulting Center assisted in the
study.

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