July 12, 2016

International Students Are US Business' Best Hope for Growth

Stanford University students listen during their Technology Entrepreneurship class. REUTERS/Stephen Lam

By Steve Tobocman

Ramsoft Systems, a Detroit-based information technology (IT) solutions firm with more than 400 employees, is the archetype for America’s economic future. The company hires as many as 100 entry-level workers each year from local Michigan universities, seeking out highly skilled IT, computer science, and business graduates, as well as students in the science, technology, engineering, and math (STEM) fields, to retain its competitive edge serving clients such as BMW, Hewlett Packard, Miller Brewing Company, and Northrop Grumman, among others.

Unfortunately, Ramsoft, like countless other American companies, struggles to find the talent it needs among native-born workers in the United States. Researchers estimate there will be a nationwide employment shortfall of 1.3 million unfilled STEM jobs by 2020.

International students studying in the United States are part of the world’s most valuable economic asset—highly skilled STEM talent. According to the National Science Foundation between 40 and 70 percent of all graduate students in STEM fields at US colleges and universities are international students. Over the past decade, the number of international students in the United States has grown 72 percent and now reaches more than one million, comprising nearly 5 percent of all college and university students.

Yet this week, hundreds of thousands of these talented international students will say goodbye to the United States to return, degrees in hand, to their home countries. Their F-1 student visas expire 60 days after they graduate, and our outdated immigration system leaves them with few options to stay and work here. Research from the Chicago Council on Global Affairs revealed that nearly zero percent of international students work in their local economies five years after graduation.

The “eviction” of this international talent is a challenge for Michigan-based companies like Ramsoft, along with businesses across the country. A report released this week by Global Detroit, the nonprofit economic development organization that I direct, chronicled an 80 percent growth over the past four years in the utilization of international students from seven key Michigan universities to fill unmet STEM talent needs, while a report released by St. Louis Mosaic mapped out the strong fit between local employers’ talent needs and international students’ skills.

While Ramsoft’s leadership pursues talent wherever they can find it, President and CEO Victor Naidu believes that international students bring their own competitive advantage, arguing that international students “have a high motivation and their willingness to work hard overcomes all their obstacles. Success is not an option for them. It’s a mandated requirement.”

Vivek Wadhwa and researchers at Duke University and University of California-Berkeley have documented that approximated 25 percent of all US high-tech firms (and more than 50 percent of the high-tech firms being created in Silicon Valley) are created with at least one immigrant founder or co-founder. Follow-up research suggests that the average high-tech immigrant entrepreneur starts their business 13 years after coming to the United States and that the number one reason to come here was study as an international student.

The benefits of retaining this international talent doesn’t end with businesses.  When international students help a US employer satisfy hard-to-fill STEM jobs, they allow those employers to better serve existing customers, expand their operations, and grow the business in ways that enable the employer to hire additional workers. The American Enterprise Institute and the Partnership for a New American Economy estimate that every international student who attains a graduate STEM degree in the United States who is hired by a US employer creates 2.62 additional jobs in the U.S. economy. Similarly, the Chicago Council on Global Affairs has quantified the significant regional tax and wage benefits of better putting international students to work in local economies.

Economic developers, elected officials, and American businesses are beginning to realize the incredible economic potential that international students represent. New regulations will enable eligible international students with STEM degrees to work for as long as 36 months after graduation in an Optional Practical Training (OPT) as part of their student visa.

Yet longer-term employment of this talent remains a challenge as America’s demand for high-skilled labor has made the federal H-1B program, a more permanent visa channel for foreign-born talent, more difficult to use.

International students who return home after OPT represent a double-edged sword for American employers. On one hand, they can help American firms develop a global footprint as these former employees return home and represent potential customers and suppliers for a firm using their labor. On the other hand, they often set up companies in their home countries, becoming competitors for their former employers.

Federal immigration reform would provide a significant boost to the American economy and create the visa channels necessary to allow US companies to hire the world’s best and brightest. These much needed policy updates have been stalled to decades, but the urgency has never been greater, especially as the United States sheds another cohort of world-class talent this very week.  

Steve Tobocman, a former State Representative and Michigan House Majority Floor Leader, is the Executive Director of Global Detroit and Co-Chair of the Welcoming Economies Global (WE Global) Network, a partnership of Global Detroit and Welcoming America. He was also a member of the Council’s bipartisan task force behind the report US Economic Competitiveness at Risk: A Midwest Call to Action on Immigration Reform and is a signatory of its immigration Group of 500.


The Chicago Council on Global Affairs is an independent, nonpartisan organization that provides insight – and influences the public discourse – on critical global issues. We convene leading global voices and conduct independent research to bring clarity and offer solutions to challenges and opportunities across the globe. The Council is committed to engaging the public and raising global awareness of issues that transcend borders and transform how people, business, and governments engage the world.

The Chicago Council on Global Affairs is an independent, nonpartisan organization. All statements of fact and expressions of opinion in blog posts are the sole responsibility of the individual author(s) and do not necessarily reflect the views of the Council.


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