Written by Conor O’Brien
Important points
- States, cities, and universities can establish and fund Global Entrepreneurs in Residence (Global EIR) programs to retain immigrant founders who start companies locally.
- The Global EIR program can provide uncapped H-1B visas to promising founders who are unable to remain in the United States.
- At scale, global EIR programs serve as anchors for new technology clusters.
introduction
States and local governments have few policy tools if they want to attract and retain immigrant founders. One of his most promising programs, the Global Entrepreneur-in-Residence, remains underutilized and poorly promoted, but state lawmakers are finally starting to take advantage of it.
The Global EIR program provides visas to entrepreneurs who take advantage of the university’s cap-exempt H-1B status to establish promising companies in their neighborhoods.In the latest state budget cycle, New York State Approved $4 million in state aid Up to eight global EIR programs will be targeted across the state, providing a much-needed injection of entrepreneurship to a state struggling with: A sharp decline in economic vitality. Washington also appropriated funds for state pilot programs. New Jersey lawmakers are also considering dedicating $500,000 to a new AI-focused global EIR program at the state’s universities. These programs allow more entrepreneurial graduates to stay home rather than being forced to leave the country due to inadequate immigration systems.
Recent frenzy in New York, Washington, and New Jersey An important part of their economic development toolkit. This report provides a brief overview of how state and local governments, as well as universities themselves, can leverage this model to foster entrepreneurship and innovation in their own backyards.
How states and cities can use the global EIR model to build technology hubs closer to home.
problem
Foreign-born startup founders have few options for entering and remaining in the United States.
US, Unlike many developed peersthere is no independent startup visa.
At the same time, the primary temporary visas used by skilled workers to enter the United States either prohibit them from starting a business or actually make it difficult for them to do so. Research shows that immigrants as a whole are far more entrepreneurial than natives when given the opportunity, but existing visa programs make it difficult to establish startups.
Although entrepreneurs can technically use H-1B visas, in practice this is often difficult and rare. Establishing the employer-employee relationship required for H-1B sponsorship often requires the founder to relinquish majority control to the co-founders. The Department of Homeland Security is The rules are nearing finalization. This would make it easier for certain entrepreneurs (even those with a controlling interest in the company) to be clear that they can be sponsored for a visa in the annual H-1B lottery. right.
Aside from the complexities of H-1B for founders, there is the additional problem that the H-1B program is too small to meet demand. Each year, private companies across the United States compete for a limited number of 85,000 H-1B visas, which sponsor skilled foreign-born workers in specialized occupations. Demand for H-1B visas has increased dramatically since the cap was last updated in 2006, with USCIS receiving 470,000 applications last year. This means that the probability of an individual winning a randomly assigned lottery ticket is steadily decreasing.
Importantly, founders of H-1B sponsored companies are subject to annual visa caps. This level of uncertainty can make it nearly impossible for founders to raise funding, and perhaps deter would-be founders as a whole.
However, through the Global EIR Program, local universities, with support from the state government, can solve this problem for entrepreneurs and support local economic development at the same time.
solution
In 2000, Congress exempted universities and nonprofit organizations from H-1B caps in the 21st Century American Competitiveness Act. Universities, and certain non-profit organizations located within universities, can use this power to sponsor immigrant entrepreneurs. two ways.
The first one, Global EIR National Peer Network This is called the “employer” model. With this program design, the university employs local entrepreneurs part-time, typically to mentor business students and teach courses. The university submits her H-1B application with cap exemption for part-time work. If approved, the startup will also simultaneously file an H-1B application for the founder’s girlfriend, whose work at the university will exempt her from the 85,000 visa cap. During the day, entrepreneurs build businesses in their communities and create jobs and value within the local economy. In a part-time role, the Founder will use their relevant expertise to support students.
The second “employment” model allows startups to directly sponsor founders who are physically located at the university and whose activities align directly with the university’s mission. Under this model, the founding company can provide up to a cap without additional university sponsorship if it submits documentation that “can demonstrate a logical connection or connection between the company’s work and the university’s key functions.” You can apply directly for her exempt H-1B. This second model of his requires more specialized legal services on behalf of the founders, but typically does not require direct funding from the university.
State and local governments across the country can help facilitate this type of sponsorship by providing dedicated funding for global EIR programs. Global EIR programs can scale independently and sponsor dozens of local founders each year who may ultimately have to leave their state or country. In contrast to many other forms of local economic development spending, global EIRs directly attract and retain top talent who are actively building businesses in the communities they serve.
in mockup For global EIR programs, the Global EIR Peer Network has one-time legal fees of approximately $10,000 per founder, ongoing annual costs of approximately $12,000 per founder, and a full-time program manager salary. and benefits totaling approximately $80,000. Extrapolating these estimates, a small program sponsoring 20 entrepreneurs could be built with annual operating costs between his $500,000 and his $700,000. Compare this with the average public cost per job. Over $100,000 From typical company-specific development incentives.
Global EIR programs operate as an important part of the world because of their large scale, vision and a degree of entrepreneurship from local leaders themselves. technology cluster in states and cities across the country.
More states are funding Global Entrepreneur-in-Residence programs.
As USCIS further clarifies the use of the H-1B for entrepreneurs, it recognizes the power of models like GEIR to build new technology hub ecosystems and provides funding for such programs locally. An increasing number of states are considering offering it.
and new york In last month’s update, five states approved funding for their state GEIR programs. At the beginning of this year, washington too Approved $300,000 to pilot the Entrepreneur-in-Residency program at the University of Washington. This program sponsors graduate and graduate students at California State University.
new jersey Gov. Phil Murphy also proposed a new AI-focused GEIR program for the state in his latest budget request. Governor Murphy asked lawmakers for $500,000 to pilot the AI GEIR program.Our goal is to encourage promising international students to bring their talents to New Jersey after graduation. ”
In 2014, Massachusetts allocated $3 million Participated in a global EIR program in the Boston area under the Center for Venture Development at the University of Massachusetts Boston. Currently, dozens of his GEIR participants supported by VDC are creating more than 1,600 jobs and raising funds for him. over $1 billion Incredible return on investment for economic development spending.
Over the past two budget years; michigan Award global detroit Two $1 million grants will be awarded for global EIR efforts across multiple university campuses in the state, including Grand Valley State College of Creative Studies, Lawrence Technological University, Michigan Technological University, and Wayne State University. This is part of the larger Michigan Global Talent Initiative, for which he has been allocated $10 million so far.
Last year, the state California dedicate 2 million dollars Towards the establishment of a global EIR program operated by the University of California System.
lastly, UtahGovernor Spencer Cox was suggested The Global Talent Accelerator Program supports part-time opportunities for international students pursuing entrepreneurship. However, the state Legislature failed to appropriate the proposed $250,000 in state funds.
Cities and universities can operate without state funding or permission.
Only a handful of states have funded or are considering funding new global EIR programs, but the good news is that cities and universities can start and fund these programs themselves. . While state funding provides additional visibility and centralized coordination, a permit is not required for communities to take full advantage of this economic development tool.
Currently, some city organizations exist independently of state-level programs. As an example, global clevelandis an organization that works on various immigration initiatives in the city, including the Global EIR program. aaron georgeAfter graduating from Case Western, he was able to stay in Cleveland to found SupplyNow, an AI company that now operates in multiple states.
Please note that the list of states and cities with GEIR programs is likely not comprehensive for two reasons. First, the global EIR is not a formal pathway. Rather, it is the name of a nonprofit network that popularized the concept of strategically using a university’s cap-exempt H-1B status to retain local entrepreneurs. Cities and states can create their own such programs. Second, there is no data from the Department of Homeland Security on the number of entrepreneurs using this route to secure H-1B visas. Perhaps some people have had success using this route on their own.
conclusion
State and local leaders have few tools to help more promising young entrepreneurs stay and build businesses in the United States. The Global Entrepreneur-in-Residence model is an imperfect tool. The US still requires a startup visa. Nevertheless, global EIR is an underutilized resource that communities can use to retain top talent, anchor new hub initiatives across the country, and sow the seeds of future economic growth at very little cost. It’s not a powerful tool.
