Becoming American: Why Immigration Is Good for Our Nation's Future (18 page)

Ford Motor Company went through great efforts to assimilate, or “Americanize,” its immigrant workers. First, the company created the English Language School, where immigrants would spend six months reciting and learning daily life phrases. Upon graduating, immigrants participated in a ceremony called “The Pageant of the Ford Melting Pot,” during which workers would symbolically climb into a melting pot wearing their national garb and come out wearing American clothing. The ceremony was so elaborate that the school’s teachers would pretend to stir the pot with big, long spoons.
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Government support also helped the automobile cluster. Car companies realized that a national highway system would increase the demand for cars, so with this goal in mind, Detroit lobbied for such a system to promote car ownership. Eventually, the mutual benefits the car industry and the United States both received were so great that Charles Erwin Wilson, head of General Motors, made the statement, “For years I thought what was good for our country was good for General Motors, and vice versa.” The quote is often misquoted as, “What’s good for General Motors is good for the country.” Wilson was the head of General Motors when President Eisenhower asked him to be the Secretary of Defense. As Secretary of Defense, he claimed that, if a situation arose in which he had to choose between the country and General Motors, he would choose the country. He also stated, however, that he truly believed such a possibility was inconceivable because the fates of the two were intertwined.

Other companies that grew alongside Ford and General Motors include Chrysler and Packard. By the 1950s, one out of every six working Americans worked directly or indirectly for the automobile industry. At its peak, Ford’s River Rouge plant employed more than ninety thousand workers.
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The economic prowess Detroit brought America was truly great. In addition, social scientists in the 1950s viewed the auto industry as a force that had the ability to end class conflict in America. Autoworkers were able to buy homes and to save money to send their children to school.
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They were able to enter the middle class.

Eventually, Detroit began to deteriorate due to greater international competition, the oil crisis, and automation technology. Today, it is often portrayed as a city of empty buildings and high crime. All is not yet lost. In 2010,
Time
magazine published an article titled “Arab-Americans: Detroit’s Unlikely Saviors.” Thousands of Lebanese, Yemenis, and other Middle Easterners moved to Detroit as a result of Henry Ford’s recruitment. During that time, a group of Iraqi Catholics, known as Chaldeans, made a home for themselves in Detroit. Today, both Muslim and Christian Middle Easterners can be found in the city. It has been estimated that at least two hundred thousand Middle Easterners live in the four-county region of southeastern Michigan. According to the article, “The Arab-American community in metro Detroit produces as much as $7.7 billion annually in salaries and earnings.” Entrepreneurial in nature, Middle Easterners have started more than fifteen thousand businesses in the metro area. When Nafa Khalaf, cofounder of Detroit Contracting, was asked about the future of Detroit, he responded, “You want to know if Detroit has a future? Ask us Arabs. We believe in this place.”

Though it is admirable that the Arab American community holds faith in Detroit, the city has declared bankruptcy. The only way to rejuvenate it is to reestablish the cluster or to promote another cluster, similar to the way Boston refocused its attention from textile manufacturing to the high-tech computer industry. Now, Boston has refocused once again and has become one of the leaders in biotechnology.

Clusters require a large workforce and government encouragement and support, such as the U.S. nationwide road systems investments. In the case of Detroit, immigrants helped to fill the workforce needs. They helped to build America’s once greatest industry. Even now, at a time when most have little faith in the fate of the city, immigrants are trying to help it get back on its feet.

CASE STUDY: SILICON VALLEY

In 2013, Silicon Valley held its breath while Congress debated immigration reform. The leaders of Silicon Valley wanted a greater slice of the world’s high-tech labor pool pie. They spent millions in a super PAC to try to increase the number of foreign-worker visas.

According to Adam Thierer, of the Mercatus Center for Politics at George Mason University, “High technology companies are among the fastest growing lobbying shops in Washington.”
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The supply of H-1B visas is not nearly high enough for the number demanded. Mark Zuckerberg, founder of Facebook, believes American companies will lose their competitive edge if they do not begin to employ more immigrants. In a
Washington Post
op-ed, he writes, “In a knowledge economy, the most important resources are the talented people we educate and attract to our society. A knowledge economy can scale further, create better jobs, and provide a higher quality of living for everyone in our nation.”
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Professor Dan Schnur of the Jesse M. Unruh Institute of Politics at the University of Southern California, puts it more bluntly: “If you are a tech company, immigration is not a social issue, not a cultural issue, not a moral issue—it is a bottom-line issue.”
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AnnaLee Saxenian, dean of the School of Information at the University of California, Berkeley, has researched the role of immigrants in Silicon Valley for over a decade now. In 1999, she found that in the previous two decades, immigrants made up one-third of Silicon Valley’s scientific and engineering workforce. In 1998, Chinese and Indian engineers in the region alone operated businesses that generated $16.8 billion in sales and provided 58,282 jobs. They accounted for a quarter of the technology businesses in Silicon Valley at the time. In 2005, 52.4 percent of the startups in the region had at least one key founder who was an immigrant. A study conducted in 2012 and published in a Kauffman Foundation paper, however, found that 43.9 percent of the startups in Silicon Valley at that point were immigrant founded.
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The significant 8 percent drop may indicate a potential change in the attitude of immigrants in coming to the United States and remaining here.

In 2007, a study titled “Intellectual Property, the Immigration Backlog, and a Reverse Brain-Drain” predicted that, if the foreign-born visa problem was not addressed, reverse brain drain would occur. With a decade wait time for permanent residence visas, immigrants are bound to get frustrated and decide to either return home or to move to another country.
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According to “America’s Loss Is the World’s Gain: America’s New Immigrant Entrepreneurs, Part IV,” “for the first time in decades, the growth rate of immigrant-founded companies has stagnated, if not declined.”
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This observation should cause policymakers to raise red flags. Zuckerberg and other Silicon Valley leaders recognize the problem. Will the United States ultimately be able to remain technologically and economically competitive? The Silicon Valley cluster and its technologies need continuous product and service improvements to continue its success in the face of global competition and to prevent the fate of the Detroit automobile industry. It cannot achieve this goal without highly skilled immigrants.

TECHNOLOGICAL REVOLUTIONS

Global tectonic
is a phrase I have used to identify “the process by which developing trends in technology, nature, and society slowly revolutionize the business environment of the future.”
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In 2005, Erik Peterson, now director of A. T. Kearney’s Global Business Policy Council, and I identified twelve global trends that will shape the future of society and business. These trends range from governance to knowledge dissemination to urbanization. In
Global Tectonics: What Every Business Needs to Know
, we stress that CEOs and managers must prepare for the changes that these global tectonics will bring because those that do not will fall behind. Among the trends we identified were biotechnology and nanotechnology.

With the rapid growth in these two fields, we can expect a life science and a nanotechnology cluster to form somewhere in the world within the coming years. So add on the issue of the formations of a life science and a nanotechnology cluster to the potentially struggling Silicon Valley, and the United States will be challenged to remain the technological leader of the world, unless it hosts significant portions of these clusters.

In 2012, ManpowerGroup released the results of its seventh-annual Talent Shortage Survey. The survey found that 49 percent of U.S. employers had a hard time filling mission-critical positions within their organizations. On the other hand, the survey found that only 34 percent of employers globally were facing the same problem. Over 1,300 U.S. employers were surveyed, and they reported the hardest positions to fill were those in skilled trades, engineering, and IT. They had a hard time due to “lack of available applicants, applicants looking for more pay and lack of experience.”
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Both a life science and a nanotech cluster would require engineers. Life science would in particular require IT staff to develop the much-needed area of bioIT. If the United States is already having a hard time filling these positions, how will it fill the high workforce demand of a cluster? It is simple economics. Supply must increase, and to do so, a greater number of immigrants must be added to the available labor pool.

Furthermore, we learned earlier that for every foreign STEM graduate student who remains in the United States, 2.62 secondary jobs are created. In addition, for every high-tech job created in a metro area, five long-term secondary jobs outside of the high-tech sector are created, as well. Two of the five are professional jobs, and three of the five are service industry jobs.
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Hosting a cluster would be the greatest stimulus package we could receive.

LIFE SCIENCE CLUSTER

The Human Genome Project, which began in 1990, completely mapped the human genome after thirteen years of work and $4 billion. Today, about a decade later, a genome can be mapped in just fifteen minutes for under $1,000.
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The field of life science has made huge strides in the last few decades. The discoveries made can be used to diagnose and treat disease. Gene therapy will allow mutated genes, which cause disease, to be replaced with engineered healthy genes. In addition to the health benefits, the area of genomic medicine is projected to generate $350 billion worth of economic activity and millions of jobs.
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In the July–August 2012 issue of the
Harvard Business Review
, John Sviokla, a principal at PwC Consulting; Dietrich A. Stephan, a board member of the Personalized Medicine Coalition; and I wrote an article about the imminent emergence of a life science cluster. Titled “Why Life Science Needs Its Own Silicon Valley,” the article recognizes the benefits of a life science cluster and the need for government support in developing the cluster. As stated in the article, “The genomics cluster will include multinational corporations, research institutions, scientists, students, investors, related industries, and start-ups that haven’t been imagined yet.” A life science cluster would bring jobs and prestige to the city that hosts it. After much analysis, we determined that the United States, the United Kingdom, and Canada are well positioned to host the cluster. We also recognized the window of opportunity for hosting the cluster will only be open for so long, and whichever nation succeeds will receive a great economic boost and head start in the field.

No one really knows how to start clusters or why they occur where they do. The software cluster that grew in Seattle was likely a result of the city being the birthplace of Bill Gates. We believe, however, that bioIT and government support will be instrumental in the development of a life science cluster.

First, genomic medicine is data driven, so for genome studies to become widely useful, bioIT must be further developed. Researchers should amass a database of genomic data, including information in areas such as disease outbreaks, family history, and environmental exposures. The U.S. Department of Veterans Affairs is currently collecting blood samples and health and lifestyle information from veterans through the Million Veteran Program. The goal of the program is to help researchers learn how genes affect health.
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Perhaps this program will play the same role for the genomic medicine cluster as the U.S. nationwide highway did for Detroit’s automobile cluster. Unfortunately, IT personnel is one group of workers the United States is strongly lacking, as discovered by the ManpowerGroup. As it turns out, immigrants disproportionately specialize in information technology. Immigrants represent 16 percent of America’s workforce but 23 percent of the information technology industry.
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Additionally, immigrants are on average more educated in the fields of IT and life science.
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For a life science cluster to develop in the United States, we will need the help of immigrants. We will need IT experts to develop databases that can hold vast amounts of genomic data while remaining secure and easily accessible to researchers.