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Mary Meeker / Liang Wu
5.29.13
IMMIGRATION IN AMERICA &
THE GROWING SHORTAGE OF
HIGH-SKILLED WORKERS
2
 America’s technology industry is the global leader, thanks in large
measure to immigrants.
 Immigrants and the children of immigrants helped build some of our most
important companies, including Apple, Google, Oracle, Amazon, eBay,
Yahoo! and LinkedIn...and this trend continues. These companies drive
innovation, create jobs and help grow our economy.
 To maintain our leadership advantage and competitive momentum, U.S.
firms need the world’s best engineers, programmers, mathematicians and
scientists.
 Global competition for talent will rise; foreign nations will likely
increasingly pursue U.S.-trained talent. While it has become harder to
immigrate to America, opportunities to work for tech companies abroad
have grown.
WHY HIGH-SKILLED IMMIGRATION MATTERS TO
U.S. TECHNOLOGY COMPANIES...
3
 Many high-skilled foreigners graduate from our top universities. But
immigration policy makes it difficult for them to stay in America. In short,
we are training many of the most talented students in the world and
leaving many of them with these options – go work in another country for
a non-U.S. company or work for a U.S. company in another country.
 At the same time, tech companies are prevented from bringing into the
U.S. enough of the high-skilled workers they need to remain competitive.
 As a result, U.S. companies are moving some jobs overseas – and other
countries are focused on luring away talented workers who can’t get H-1B
visas.
…WHY HIGH-SKILLED IMMIGRATION MATTERS
TO U.S. TECHNOLOGY COMPANIES
4
 In previous reports*, we have provided insights on the U.S. economy –
USA, Inc. – and Internet Trends, based on our work in and around the
tech industry. We believe the immigration debate merits a similar data-
based analysis.
 The U.S. needs broad and comprehensive immigration reform to address
the large number of undocumented immigrants, border security
concerns, the need for agricultural workers and reforming the path to
citizenship. In this report, we focus specifically on the shortage of high-
skilled tech workers.
 We use a data-driven, common-sense approach to understand the many
complex threads in the immigration debate.
 A better informed public debate over high-skilled immigration would
enhance reform efforts now under way in Washington. We hope others
take our observations, share them and improve upon them.
THE GOAL OF THIS REPORT
*To see our previous reports, visit www.kpcb.com/insights
5
 Rapid growth in high-speed, inexpensive Internet access – first on PCs,
now on mobile phones and tablets and increasingly on devices of all
sorts – has transformed the way people (and companies) around the
world connect and communicate.
 The breadth + depth + speed + magnitude of technology innovation are
unprecedented – and accelerating.
 Widespread adoption of mobile access to the Internet is a global
phenomenon and is still in the early stages of evolution.
TECHNOLOGY INNOVATION –
THESE ARE UNUSUAL TIMES
6
 America’s innovation & leadership in mobile device technology – After ceding
leadership to other regions (Europe & Asia), America’s global share of smartphone
operating systems has jumped to 88% recently from just 5% in 2005, thanks to Apple and
Google.
 American leadership in global Internet innovation – 8 of the top 10 top global Internet
companies (based on users) are American – led by Google, Microsoft, Facebook, Yahoo!,
Wikipedia and Amazon – and 81% of their users are outside the U.S..
 How rapidly new U.S. companies have won users to do new things – Like Facebook,
Twitter, Linkedin, Tumblr, Groupon, Zynga, Pinterest, Dropbox…
 Intensity of competition for high-skilled engineers – Five American technology
companies (IBM / Intel / Microsoft / Oracle / Qualcomm) alone have a combined 10,000
current U.S. job openings.
 The ability to innovate (and secure capital) is at an all-time high – Coding meets
Kickstarter…
 …As is the ability of U.S. companies to attract high-skilled tech experts from around
the world.
TECH INDUSTRY SURPRISES OVER PAST
HALF-DECADE
7
 America’s tech leaders want to continue to lead in innovation – but to do so, they need
to hire the best and brightest.
 Demand for science, technology, engineering and math (STEM) experts exceeds
supply – U.S. STEM job vacancy rate (unfilled jobs as a share of the labor force) is 3-4
times higher than that of other sectors.
 U.S. policy caps H-1B work visas at 85,000/year (including 20,000 exemption for holders
of master’s degrees) despite much higher demand.
 Native-born Americans account for a declining portion of STEM graduates at U.S.
universities – 54% in 2006, down from 74% in 1985.
 High-skilled foreign graduates from U.S. universities are often sent home – and
thereby prevented from contributing to our economy.
 Demand is likely to increase for high-skilled workers – as advanced economies realize
the importance of tech skills in a slower-growth world with aging societies.
 Opportunity for immigration reform is real and reflects needed changes – and there’s
momentum, given Senate Judiciary Committee approval of comprehensive immigration
reform measure on May 21. Full Senate debate expected in June.
WHERE WE ARE NOW
8
WHERE WE ARE NOW…WHERE WE SHOULD BE
The U.S. has the best research universities in the world, which is why we
attract the best students from around the world. Forcing them to leave,
rather than allowing them to stay and add their skills and knowledge to our
economy, is one of the most short-sighted policies we have.
- John Hennessy (President) Stanford University
With more international students than virtually any university, and
graduating more engineers and technologists than any campus anywhere,
Purdue sees as clearly as anyone the senselessness of our current
policies. It’s time we begin - in the nation’s interest - taking sensible steps
to welcome more of the extremely talented people that seek to come and
strengthen the American economy...much of that talent prepared and
trained at universities like Purdue.
- Mitch Daniels (President) Purdue University
(Former Governor) Indiana
9
• High-skilled immigration policy should be designed to
create jobs and spur economic growth.
• Note that high-skilled immigrants contribute significantly to
the economy yet account for only ~3% of America’s
workforce (and fewer than 15% of all legal immigrants).
• All in, immigrants account for ~16% of America’s workforce;
almost one-third are undocumented.
WHERE WE SHOULD BE…
10
• Increase H-1B Quotas – There is clear evidence that we need a higher cap on
H-1B visas for foreign STEM workers.
• Keep More Foreign Graduates in the U.S. – We should make a greater effort
to retain the large number of non-Americans getting advanced degrees
(especially in STEM areas) from U.S. universities, while making sure that the
system does not simply become a short-cut to getting an easy Green Card.
• Streamline Immigration Process / Paperwork – Reduce current backlog,
create predictable and easier process by increasing efficiency across
government agencies related to immigration.
• Ensure American Worker Wage and Job Protection – Follow the
compromise in recent Senate legislation which creates good rules of the road
for H1-B visa dependent and non-dependent companies.
• Create a New, Dedicated Visa for Entrepreneurs – H-1B visas focus on job
seekers with advanced degrees; we should offer an alternative for people
creating new technology businesses (as Canada does.)
…WHERE WE SHOULD BE
11
Our journey is not complete until we find a
better way to welcome the striving, hopeful
immigrants who still see America as a land
of opportunity, until bright young students
and engineers are enlisted in our workforce
rather than expelled from our country.
PRESIDENT BARACK OBAMA, 2013
“
”
12
AMERICA IS A COUNTRY
OF IMMIGRANTS
13
0.9%
15% 11% 9% 15% 13% 16% 5% 15%
0% 20% 40% 60% 80% 100%
Native Americans
Immigrants or
Descendants of
Immigrants
German Irish English
Other European African American* Hispanic
Asian Other / Unclassified
3 Million
306 Million
USA Population by Ancestry, 2010 Census
Note: *African-American total includes those who came as slaves and not as voluntary immigrants.
Other includes North America (Canada), Australia, New Zealand, and those who have more than one ethnicity reported.
Source: Census Bureau, 2010 data.
99% OF AMERICANS ARE IMMIGRANTS OR
DESCENDANTS OF IMMIGRANTS
14
270MM
U.S. Born
87% of Total
Population
4MM, 1%
19MM, 6%
6MM, 2%
11MM, 4%
40MM
Immigrants
13%
Legal Immigrants (High-Skilled)
Legal Immigrants (Family-Based)
Legal Immigrants (Refugees & Other)
Undocumented Immigrants
Total USA Population = 310MM
Note: Number of undocumented immigrants currently residing in USA is an estimate by PewResearch Hispanic Center based on
Census data. Precise breakdown of legal immigrants currently residing in USA by type of admission is not available and is an
estimate based on Census data as well as Department of Homeland Security immigrant admission data from 1986 to 2010.
Source: Census Bureau, PEW, DHS.
HIGH-SKILLED IMMIGRANTS ARE ONLY 1% OF TOTAL
U.S. POPULATION
U.S. Population at a Glance, U.S. Born vs. Immigrants
by Type of Admission, 2010
15
WHY PEOPLE COME TO AMERICA –
THE SPIRIT OF FREEDOM
& OPPORTUNITY
16
ECONOMIC OPPORTUNITY + RULE OF LAW =
KEY DRIVERS OF IMMIGRATION TO AMERICA
Note: *Numbers may not add up to 100 due to rounding. Source: Public Agenda survey of 1,138
foreign born adults via telephone interviews conducted between 4/23 & 6/7/2009.
Having a trustworthy legal system
Having more opportunity to earn a good living
Making good health care available
Having a good education system
Being a good place to raise children
Having free and independent media and free expression
Having a higher standard of morality
Letting people practice the religion they choose
For each of the following, please tell me if you think the United States or your home
country does a better job when it comes to the item, or if they’re about the same?*
17
PRESIDENT RONALD REAGAN, 1988
You can go to live in France, but you cannot
become a Frenchman. You can go to live
in Germany or Turkey or Japan, but you
cannot become a German, a Turk, or a
Japanese. But anyone, from any corner of
the Earth, can come to live in America and
become an American.
“
”
18
IMMIGRANTS HAVE BEEN KEY TO
AMERICA’S ECONOMIC SUCCESS
19
The essence of America – that which really
unites us – is not ethnicity, or nationality or
religion – it is an idea – and what an idea it
is: That you can come from humble
circumstances and do great things. That it
doesn’t matter where you came from but
where you are going.
SECRETARY OF STATE
CONDOLEEZZA RICE
“
”
20Source: The “New American” Fortune 500, June 2011
A Report By The Partnership For A New American Economy.
19%
23%
58%
Founders of 2012 "Fortune 500" Companies
Immigrant
Child of Immigrant
All Others
42% OF AMERICA’S FORTUNE 500 COMPANIES
FOUNDED BY 1st OR 2nd GENERATION IMMIGRANTS…
21
4MM
7MM15MM
Total Jobs
Created by Fortune
500 Companies
= 25 Million
Immigrant
Child of Immigrant
All Others
$1,732B
$2,807B
$7,211B 2012 Total
Revenue by Fortune
500 Companies =
$12 Trillion
…THESE COMPANIES HAVE CREATED 10+ MILLION JOBS AND
$4.5 TRILLION OF ANNUAL REVENUE (= TO 30% OF USA GDP)
10+ Million
Jobs Created by Immigrant Founded
Companies, 41% of Total Fortune 500
$4.5 Trillion
Annual Revenue by Immigrant Founded
Companies, 30% of USA GDP,
39% of Total Fortune 500
Source: FactSet, data as of 4/13.
22
7 OF 10 MOST VALUABLE & RECOGNIZABLE
GLOBAL BRANDS FOUNDED BY 1st & 2nd
GENERATION IMMIGRANTS
Source: The “New American” Fortune 500, June 2011
A Report By The Partnership For A New American Economy.
23
1820 TO 1950 –
AMERICA’S ECONOMIC GROWTH
WAS EXTRAORDINARY, DRIVEN
BY IMMIGRANTS & THEIR
DESCENDANTS
24
0%
2%
4%
6%
8%
10%
0%
5%
10%
15%
20%
25%
30%
35%
40%
1820 1835 1850 1865 1880 1895 1910 1925 1940 1955 1970 1985 2000
%ofWorldPopulation
%oftheWorldGDP
USA GDP as % of World (Left Axis)
USA Population as % of World (Right Axis)
USA Percent of Global GDP & Global Population, 1820 – 2012
GDP Share Peak @ 36%, 1944
Population Share Peak @ 6%, 1950s
Source: Angus Maddison, University of Groningen, OECD. GDP & population data from 1980 to 2012 based on adjusted World
Bank / IMF data. Note population & GDP growth highly correlated (92%).
U.S. SHARE OF WORLD GDP PEAKED JUST AS
POPULATION AS % OF WORLD PEAKED
25
44%
24%
34%
2%
9%
11%
16%
18%
30%
31%
36%
0%
10%
20%
30%
40%
50%
1900-09 1910-19 1920-29 1930-39 1940-49 1950-59 1960-69 1970-79 1980-89 1990-99 2000-08
%ofUSAPopulationGrowthfrom
Immigration
USA Population Growth from Immigration, 1900-2008
Source: Census Bureau, data as of 2008.
IMMIGRANTS HAVE NEARLY ALWAYS ACCOUNTED FOR
MATERIAL PORTION OF AMERICA’S POPULATION GROWTH
26
1980 TO 2013 –
AS THE WORLD HAS GROWN
MORE COMPETITIVE, AMERICA
HAS LOST SHARE OF GLOBAL
ECONOMIC GROWTH
27
0%
10%
20%
30%
40%
%ofGlobalGDP
USA Europe China India Latin America
AS CHINA AND INDIA GAINED SHARE OF GLOBAL GDP,
AMERICA’S SHARE HAS DECLINED
Percent of Global GDP, 1820 – 2012.
USA vs. Europe vs. China vs. Latin America vs. India
Source: Angus Maddison, University of Groningen, OECD, data post 1980 per
IMF (GDP adjusted for purchasing power parity).
27%
16%
33%
15%
2%
19%16%
6%
8%
2%
28
BUT AMERICA IS THE GLOBAL LEADER
IN TECHNOLOGY AND INTERNET…
AND IMMIGRANTS HAVE MADE
OUTSIZED CONTRIBUTIONS AS FOUNDERS
AND KEY PERSONNEL
29
Company Mkt Cap ($MM)
Apple $416,622
Google 268,445
IBM 239,530
Microsoft 234,828
Oracle 172,044
Amazon.com 119,011
Cisco 116,904
Intel 105,721
Ebay 65,357
Facebook 63,472
EMC 53,347
Hewlett-Packard 43,118
Texas Instruments 38,756
VMware 35,917
Priceline 35,583
Automatic Data Processing 31,274
salesforce.com 25,840
Dell 25,003
Yahoo! 24,306
Cognizant Technology 23,648
Adobe Systems 20,640
Broadcom 19,713
Intuit 19,393
LinkedIn 19,357
Symantec 16,916
Other U.S. Tech Companies 622,632
Total $2,857,376
AMERICAN TECHNOLOGY COMPANIES =
69% OF GLOBAL PUBLIC TECH MARKET CAPITALIZATION
Total USA Public Technology Companies =
$2.9 Trillion in Aggregate Market
Capitalization
USA Public Technology Companies* = 69% of
Aggregate Market Capitalization of Global Top 100
Technology Companies
USA
69%
Europe
8%
Japan
7%
S. Korea
6%
Other
4%
India
3%
China
3%
USA* = $2,519B
Europe = $298B
Japan = $245B
S. Korea = $203B
India = $118B
China = $111B
ROW = $160B
Note: *While total USA tech companies support aggregate market cap of $2.9T as of 3/13, those in the
global top 100 support aggregate market cap of $2.5T. Source: FactSet, data as of 3/13.
30
Top 10 Internet Properties by Global Monthly Unique Visitors, 2/13
Source: comScore Global, 2/13.
0 200 400 600 800 1,000 1,200
Baidu.com
Tencent
Glam Media
Apple
Amazon.com
Wikipedia
Yahoo!
Facebook
Microsoft
Google
Monthly Unique Visitors (MMs)
USA Users
International Users
80% OF TOP 10 GLOBAL INTERNET PROPERTIES
‘MADE IN USA’…81% OF USERS OUTSIDE USA
31
INNOVATIONS IN MOBILE CONNECTIVITY HAVE TILTED
TECH INDUSTRY MARKET SHARE TO AMERICA
Source: 2005 data per Gartner, 2012 data per IDC.
Global Smartphone Operating System Market Share
(by Units Shipped), 2005 vs. 2012
2005 2012
0%
20%
40%
60%
80%
100%
MarketShareofSmartphoneOS
Other OS
Apple iOS
Google Android
Microsoft Windows Phone
BlackBerry OS
Linux
Nokia Symbian
Made in USA
Operating systems
88%
5%
32
IMMIGRANTS ARE KEY DRIVERS OF INNOVATION &
GROWTH IN AMERICA’S TECHNOLOGY INDUSTRY
Percentage of Companies Founded by Immigrants, 2007
Foreign-National Contribution
to U.S. Global Patent Applications, 1998-2006
Immigrant-Founded Start-Ups
as Percent of Total in Tech Centers, 2007
Source: The Kauffman Foundation, America’s New Immigrant Entrepreneurs reports, published in 2007.
Defense / Aerospace
Environmental
Bioscience
All Industry Fields
Innovation / Manufacturing-Related Services
Software
Computers / Communications
Semiconductors
8%
9%
20%
25%
26%
28%
32%
35%
60%
50%
40%
30%
20%
10%
0
Portland Research
Triangle
Park
Denver Seattle Austin D.C Boston San
Diego
Chicago N.Y Silicon
Valley
30%
25%
20%
15%
10%
5%
0%
1998 1999 2000 2001 2002 2003 2004 2005 2006
%ofTotal
%ofTotal
33
Founders / Co-Founders of Top 25 U.S. Public Tech Companies, Ranked by Market Capitalization
60% OF TOP 25 TECH COMPANIES FOUNDED BY 1st & 2nd
GENERATION AMERICANS = 1.2MM EMPLOYEES, 2012
*Note that while Andy Grove (from Hungary) is not a co-founder of Intel, he joined as COO on the day it was incorporated.
**Francisco D’souza is a person of Indian origin born in Kenya. Source: FactSet as of 3/13; “The ‘New American’ Fortune
500”, a report by the Partnership for a New American Economy; “American Made, The Impact of Immigrant Founders &
Professionals on U.S. Corporations”
Rank Company
C
o
Mkt Cap ($MM) LTM Rev ($MM) Employees
1st or 2nd Gen Immigrant
Founder / Co-Founder
Generation
1 Apple
S
$416,622 $164,346 76,100 Steve Jobs 2nd-Gen, Syria
2 Google
S
268,445 49,958 53,861 Sergey Brin 1st-Gen, Russia
3 IBM
S
239,530 104,507 434,246 Herman Hollerith 2nd-Gen, Germany
4 Microsoft
S
234,828 72,764 94,000 -- --
5 Oracle
S
172,044 37,230 115,000 Larry Ellison / Bob Miner 2nd-Gen, Russia / 2nd-Gen, Iran
6 Amazon.com
S
119,011 61,093 88,400 Jeff Bezos 2nd-Gen, Cuba
7 Cisco
S
116,904 47,252 66,639 -- --
8 Intel
S
105,721 53,341 105,000 --* --
9 Ebay
S
65,357 14,028 31,500 Pierre Omidyar 1st-Gen, France
10 Facebook
S
63,472 5,089 4,619 Eduardo Saverin 1st-Gen, Brazil
11 EMC
S
53,347 21,714 60,000 Roger Marino 2nd-Gen, Italy
12 Hewlett-Packard
S
43,118 118,397 331,800 -- --
13 Texas Instruments
S
38,756 12,690 34,151 Cecil Green / J. Erik Jonsson 1st-Gen, UK / 2nd-Gen, Sweden
14 VMware
S
35,917 4,605 13,800 Edouard Bugnion 1st-Gen, Switzerland
15 Priceline
S
35,583 5,261 7,000 -- --
16 Automatic Data Processing
S
31,274 10,945 57,000 Henry Taub 2nd-Gen, Poland
17 salesforce.com
S
25,840 3,050 9,800 -- --
18 Dell
S
25,003 56,982 111,300 -- --
19 Yahoo!
S
24,306 4,987 11,700 Jerry Yang 1st-Gen, Taiwan
20 Cognizant Technology
S
23,648 7,346 156,700 Francisco D'souza / Kumar Mahadeva 1st-Gen, India** / 1st-Gen, Sri Lanka
21 Adobe Systems
S
20,640 4,373 11,144 -- --
22 Broadcom
S
19,713 8,006 11,300 Henry Samueli 2nd-Gen, Poland
23 Intuit
S
19,393 4,153 8,500 -- --
24 LinkedIn
S
19,357 972 3,458 Konstantin Guericke / Jean-Luc Vaillant 1st-Gen, Germany / 1st-Gen, France
25 Symantec
S
16,916 6,839 20,500 -- --
Total Founded by 1st or 2nd Gen Immigrants $1,590,800 $507,516 1,151,835
34
JOBS AT TOP 50 U.S. TECH COMPANIES GREW 4X
TO 2.5 MILLION OVER 2 DECADES
0
500
1,000
1,500
2,000
2,500
3,000
1993 1996 1999 2002 2005 2008 2011
AggregateNumberof
Employees(000s)
Aggregate number of employees among (current) Top 50 Public USA Technology
Companies by Market Cap, 1993-2013 YTD
Source: FactSet as of 3/13.
35
42% of Scientists in Top 7 U.S. Cancer
Research Centers Are Foreign Born
• University of Texas MD Anderson – 62%
• Memorial Sloan-Kettering Cancer Center – 56%
• Fox Chase Cancer Center – 44%
• Johns Hopkins Sidney Kimmel Comprehensive Center – 35%
• Dana-Farber Cancer Institute – 33%
• UCSF Diller Family Comprehensive Cancer Center – 32%
• Fred Hutchinson Cancer Research Center – 30%
BEYOND COMPUTING
Source: National Foundation for American Policy, based on National Cancer Institute data, policy
brief published in 2013.
36
STEM
(SCIENCE / TECHNOLOGY /
ENGINEERING / MATH)-RELATED
EMPLOYMENT HAS INCREASED
~2X FASTER THAN NON-STEM
EMPLOYMENT…
37
0%
2%
4%
6%
8%
0MM
2MM
4MM
6MM
8MM
1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
%ofTotalUSAWorkforce
USAScience&EngineeringWorkers
USA Science & Engineering Workers & % of Workforce, 1983-2010
Science & Engineering Workers (MMs) % of USA Workforce
Note: *Potentially understated - according to the National Science Foundation, over 4 million people in America use their science
& engineering degree in their job even though their occupation is not formally classified as a science & engineering occupation.
Source: National Science Board, data as of 2010.
U.S. DEMAND FOR HIGH-SKILLED STEM WORKERS KEEPS
GROWING – 7MM STEM WORKERS* IN 2010, UP FROM 3MM IN 1983
38
Total USA Employment % Change from 2000 by Sector, 2000-2012
40-85%* INCREASE IN STEM + CMS* JOBS VS.
30% FOR NON-STEM JOBS SINCE 2000
Note: *CMS is Computer / Math Sciences. Source: U.S. Census Bureau, Current Population Survey
(CPS); Ian Hathaway, Engine.is report published in 2013. Note: Data have been smoothed using a 12-
month moving-average.
EmploymentChange(%)Since2000
39
Job Openings as % of Respective Labor Force by Sector, 2005-2012
Note: Calculated as job openings in each sector divided by labor force in each sector. Note that the job vacancy data used here aren’t
available by level of educational attainment. Therefore, we are unable to restrict this portion of the analysis to workers with a bachelor’s
degree or more. As a result, the differences here between STEM, Computer / Math Sciences & non-STEM may be somewhat overstated.
Source: Ian Hathaway (Engine.is) analysis of data from U.S. Census Bureau, CPS; Conference Board; Bureau of Labor Statistics, JOLTS.
3-4X* MORE STEM JOB OPENINGS THAN NON-STEMJobOpeningsasaShareofLaborForce
40
…BUT AMERICA CANNOT FILL ALL
STEM-RELATED JOB OPENINGS…
41
122,300
51,474
0 50,000 100,000 150,000
# of Job Openings
Requiring a Bachelor's
Degree in Computer
Science
# of Graduates w/
Bachelor's Degree in
Computer Science
Number of People, per Year
Source: Microsoft analysis (released in 2013) based on Bureau of Labor Statistics data.
COMPUTER SCIENCE JOB OPENING FORECAST =
2.4X # OF COMPUTER SCIENCE GRADUATES
Projected Average Annual # of Graduates w/ Bachelor’s Degree in Computer Science vs. # of Job
Openings Requiring a Bachelor’s Degree in Computer Science, 2010-2020E
42
View outside of Quixey’s office on
Castro St. in Mountain View, CA.
Source: Joshua Stanton-Savitz.
STREET VIEW – COMPANIES & STARTUPS CAN’T HIRE
ENOUGH ENGINEERS
42View outside of Quixey’s office on Castro St. in Mountain View, CA.
Photo: Joshua Stanton-Savitz, 5/13.
43
FIVE HIGH-TECH COMPANIES
ALONE – IBM, INTEL, MICROSOFT,
ORACLE AND QUALCOMM – HAVE
COMBINED 10,000 CURRENT
OPENINGS IN THE UNITED
STATES.
Source: Technology CEO letter to the president and lawmakers, 3/13.
http://www.scribd.com/doc/130388692/Tech-CEO-letter
44
DEMAND FOR STEM
GRADUATES / EXPERTS HAS
RISEN DRAMATICALLY…
45
U.S. EMPLOYER DEMAND FOR STEM EXPERTS /
GRADUATES CONTINUES TO RISE…
Sustained Growth is Projected for STEM Occupations
Relative Employment Levels vs. 2006 Employment (2006=100), by Occupation
Source: Chairman’s staff of the Joint Economic Committee based on data from the Bureau of Labor Statistics.
The BLS does not project employment for individual years from 2010-20. For the purposes of this chart, Life
Sciences excludes Medical Sciences. Report published in 2012.
RelativeEmploymentLevelsvs.2006Level
(2006=100)
46
…WHILE SUPPLY OF NATIVE-
BORN STEM GRADUATES /
EXPERTS HAS FALLEN ON
RELATIVE BASIS
47
STEM DEGREES HAVE FALLEN AS % OF DEGREES
GRANTED IN AMERICA...
Source: Chairman’s staff of the Joint Economic Committee based on data from the Department of Education’s National
Center for Education Statistics: Integrated Postsecondary Education Data, STEM Degrees include degrees in:
Engineering, Physical Sciences, Geosciences, Math and Computer Sciences and Life Sciences (except Medical Sciences).
Report published in 2012.
A Smaller Percentage of Degrees Are STEM Degrees
STEM Degrees as a Share of All Degrees Granted, 1985 - 2009
STEMDegreesas%ofAllDegreesGranted
48
…WHILE U.S.-BORN STUDENTS HAVE FALLEN TO 54% (2006)
FROM 74% (1985) OF U.S. STEM DOCTORATE GRADUATES
Source: Chairman’s staff of the Joint Economic Committee based on data from the Department of Education’s National
Center for Education Statistics: Integrated Postsecondary Education Data, STEM Degrees include degrees in:
Engineering, Physical Sciences, Geosciences, Math and Computer Sciences and Life Sciences (except Medical Sciences).
Report published in 2012.
Share of STEM Doctorates Granted to U.S. Domestic Students, 1985 - 2006
STEM Doctorates as a Share of All Doctorates Granted, 1985 - 2009
%ofSTEMDoctoratesGrantedtoU.S.Domestic
Students/STEMDoctoratesas%ofAllDoctorates
49
First University Degrees in Natural Sciences,
By Selected Country/Economy, 1998–2008
Note: *Data for selected countries not available in 2007-2009. Natural sciences include physical, biological,
environmental agricultural, computer sciences and mathematics. SOURCES: Organisation for Economic Co-operation &
Development, Education Online database, http://www.oecd.org/education; & national statistical offices. Science &
Engineering Indicators 2012
Doctoral Degrees in Engineering, By Selected
Region/Country, 2000 To Most Recent Year*
GLOBAL SCIENCE & ENGINEERING GRADUATION
RATES INCREASINGLY FAVOR CHINA
EngineeringNatural Sciences
Degreesin000s
Degreesin000s
50
TO REMAIN COMPETITIVE,
AMERICAN COMPANIES WANT TO
HIRE BEST & BRIGHTEST FROM
AROUND WORLD…
51
…BUT AMERICAN COMPANIES
ARE CONSTRAINED BY CAPS ON
H-1B VISAS (85,000 ANNUALLY –
OR < 0.03% OF U.S. POPULATION).
THERE’S DEMAND FOR AT LEAST
150,000 PER YEAR.
52
U.S. DEMAND FOR H-1B WORKERS HAS EXCEEDED
CAPS
Number of Initial Petitions for New H-1B Workers Submitted by Employers Relative to the Cap,
2000 – 2009#ofPetitionsin000s
K
K
K
K
Source: GAO analysis of Homeland Security data, Testimony Before the Subcommittee on Immigration Policy and Enforcement,
Committee on the Judiciary, House of Representatives. Report published in 2011.
53
ECONOMIC GROWTH &
EMPLOYER DEMAND IMPLY MORE
H-1B VISAS SHOULD BE GRANTED
54
0
100
200
300
400
$10
$11
$12
$13
$14
1999 2001 2003 2005 2007 2009 2011
NumberofVisasIssued(000s)
USARealGDP($T)
USA Real GDP* vs. Employment (H-1B) Visas Issued
per Year, 1999 - 2012
Real GDP ($T) H-1B Employment Visa Issued
SINCE 1999, U.S. REAL GDP UP 26% WHILE ANNUAL H-1B
VISAS GRANTED REMAINED CONSTANT & ANNUAL H-1B
QUOTA DECLINED
Note: *Real GDP adjusted for inflation.
Source: BEA, State Dept. data as of 2012.
2005-2012
85K
H-1B Visas Subject to Cap
2004
65K
1999-2000
115K
2001-2003
195K
55Source: Brookings Institute, USCIS, 2013.
H-1B Visa Annual Cap & Availability Windows For Employers, 1999-2014
FLAT H-1B WORK VISA QUOTA BLOCKING U.S. FIRMS
FROM HIRING SKILLED WORKERS THEY NEED
Annual Cap on H-1B visas
H-1B Availability Windows
56
HIRING H-1B WORKERS DOES
NOT DISPLACE AMERICAN
WORKERS –
DATA IMPLY NEW AMERICAN
JOBS ARE CREATED
57
7.5
4.7
Firms w/ <5,000 Workers Firms w/ 5,000-10,000 Workers
0
2
4
6
8
10
NewEmploymentperH-1B
Application
New Employment per H-1B Application, by Company Size, 2002-2005
Average New Employment per
H-1B Application = 5.0
Source: National Foundation for American Policy (NFAP) Study based on 2002-2005
data, report published in 2008.
COMPELLING CORRELATION BETWEEN H-1B
APPLICATIONS & NEW AMERICAN JOBS CREATED
58
Impact of H-1B Visa Restrictions
% of Surveyed
Companies Agreeing
Hired more people (or outsourced
work) outside of USA
65%
Delayed or changed plans for projects 46%
Affected competitiveness against
foreign competitors
74%
Source: 2008 NFAP survey response from 27 companies who are members of TechNet, the Semiconductor
Industry Association (SIA) and the larger corporate members of SEMI (Semiconductor Equipment and
Materials International).
RESTRICTING H-1B QUOTAS HAS FORCED AMERICAN
COMPANIES TO HIRE & RELOCATE WORKERS ABROAD
59
PLAYING BY THE RULES
PRIMER ON
H-1B VISAS & GREEN CARDS
60
SO, YOU WANT AN H-1B VISA?
Congress capped annual new visas at 85,000 in 2004… And you need to be sponsored by an
employer. If you lose your job, you need to leave the country, unless you find a new sponsor
or switch to another kind of visa (like a student or visitor visa).
For foreigners to get
an H-1B visa to
work in the U.S.,
you’ll need to be a
skilled worker…
With at least a
bachelor’s degree…
…in designated
“specialty
occupations.”
You can stay up to
six years, if your
visa is renewed but
they are hard to get.
61
BUT WAIT…YOU WANT TO STICK AROUND?
• H-1B visa holders who want to stay in the country can apply for a Green Card
– which lets you stay permanently. After five years, Green Card holders can
apply to be citizens.
• Green Card holders can live and work in the U.S. on a permanent basis…
• …But they aren’t easy to get.
• There’s an annual quota of 140,000 for skilled workers and professionals…
• …And a per-country quota of no more than 7% of total Green Cards issued,
regardless of size of population of the country…
• …So it could take up to 10 years or longer for skilled professionals from some
countries to get approved for Green Cards.
• As a result, many more H-1B visa holders must seek renewal status while
their Green Card applications are being processed.
62
• In 1979 – 18%
• In 1997 – 28%
• In 2006 – 35%
Foreign-born
engineering
professors
• In 1979 – 10%
• In 1997 – 25%
• In 2006 – 31%
Foreign-born
math/computer
sciences
professors
WHILE FOREIGN-BORN PROFESSORS
PLAY A MAJOR ROLE IN U.S. COLLEGES
AND UNIVERSITIES…
Source: National Science Foundation survey of full-time faculty who received Ph.D.’s from American institutions, 2011
63
…U.S. POLICIES FORCE MANY
AMERICAN-EDUCATED FOREIGN
STUDENTS TO RETURN HOME
64
0
100
200
300
400
500
600
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
NumberofVisasIssued(000s)
Number of Student Visas (F1) vs. Employment (H-1B)
Visas Issued per Year, 1992 - 2012
F1 Student Visa Issued H-1B Employment Visa Issued
~100K Difference
~350K
Difference
85K
H-1B Visas
Subject to
Cap
Source: U.S. Department of State, as of 5/13.
U.S. SENDING MORE QUALIFIED FOREIGN STUDENTS HOME
POST GRADUATION – 3.5X RISE IN STUDENT & EMPLOYMENT
VISA ISSUANCE GAP OVER DECADE
65
Data as of January 2012, Examples for illustration purpose only. The individual's qualifications and the requirements
of their job determines the actual waiting time.
HIGH-SKILLED IMMIGRANTS CAN WAIT 35
YEARS OR MORE FOR GREEN CARDS
How long must I wait?
Estimated time to acquire a U.S. green card.
66
ALL IN, HIGH-SKILLED
IMMIGRANTS
ACCOUNTED FOR <15%
OF LEGAL IMMIGRANTS IN 2012
67
65%
15%
13%
4% 3%
Total Legal Immigrants = 10.5 Million, 2002-2011
Family Based (Relatives of US Citizens)
Employment Based (High-Skilled Immigrants)
Refugees & Asylees
Diversity Based (Encourage Immigration from
Smaller Countries)
Other
“HIGH-SKILLED” IMMIGRANTS = ONLY 15% OF
LEGAL IMMIGRANTS IN PAST DECADE
Source: Department of Homeland Security. Data as of 2011.
68
USA RIVALS, MORE FOCUSED ON
JOB CREATION AND
COMPETITIVENESS,
GRANT 7X MORE GREEN CARDS
BASED ON SKILLS (ON RELATIVE
BASIS) THAN AMERICA DOES
69
Percentage of All Green Cards Distributed by Each Country That
Are Employment-Based, 2010
U.S. PEERS ISSUE 7X MORE GREEN CARDS ON RELATIVE
BASIS THAN U.S. AS THEY TARGET IMMIGRATION FOR JOBS
+ SKILLS
Source: OECD (2012), “Trends in International Migration Flows and
in the Immigrant Population.”
Weighted Average
(ex. USA) = 50%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0
%ofGreenCardsDistributed
70
0
300
600
900
1,200
1,500
1986 1988 1996 1998 2000 2002 2004 2006 2008 2010 2012
0%
15%
30%
45%
60%
75%
TotalLegalImmigrantsAdmitted(000s)
%ofTotalImmigrantsAdmitted
USA Number of Immigrants by Type of Admission, 1986 - 2012
Total Legal Immigrants Admitted (000s) % Family-Based
% Employment-Based % Refugees & Asylees
% Other
Source: Department of Homeland Security,
data as of 2012.
73%
66%
U.S. IMMIGRATION POLICY OF PAST 30+ YEARS
FOCUSED ON FAMILY REUNIFICATION (66% OF
IMMIGRANTS), NOT HIGH-SKILLED IMMIGRANTS
71
GLOBAL COMPETITION FOR
HIGH-SKILLED IMMIGRANTS WILL
LIKELY INTENSIFY AS ECONOMIC
GROWTH SLOWS & SOCIETIES AGE &
COUNTRIES PURSUE ECONOMIC
GROWTH DRIVERS
72
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
1950 1960 1970 1980 1990 2000 2010 2020E
RealGDPY/YGrowth(%)
USA Real GDP Annual Growth Europe Real GDP Growth
USA Trendline European Trendline
USA + Europe Real Annual GDP Growth, 1950-2020E
Note: Real GDP adjusts for inflation. Source: BEA, IMF, data as of 4/13.
ECONOMIC GROWTH IS SLOWING IN MOST DEVELOPED
COUNTRIES / REGIONS – INCLUDING USA / EUROPE
73
Growth in Potential Labor Force (Population Aged 15-59), Indexed to 1950 level = 100
Source: Jack A. Goldstone, Brookings Institute based on projection by United Nations. Report published in 2011.
MANY MAJOR ECONOMIES (LIKE CHINA / RUSSIA /
EUROPE / JAPAN / S. KOREA) LIKELY TO EXPERIENCE
LABOR FORCE DECLINES
IndexedValue(1950level=100)
74
10
20
30
40
50
1950 1960 1970 1980 1990 2000 2010
MedianAge
Median Age by Country, 1950-2010
Japan
Europe
Russia
USA
China
Latin America
India
Source: United Nations, Population Division. Data as of 2010.
SOCIETIES ARE AGING IN MOST DEVELOPED
COUNTRIES / REGIONS – U.S. MEDIAN AGE WAS 37 IN
2010, UP FROM 30 IN 1950
75
Note: Labor force includes all employed & unemployed civilians 16 years old & over. It does not include those who have no job & are not
looking for one. Many who are not in the labor force are going to school or are retired. Family responsibilities keep others out of the labor
force. Women joining labor force has been a key driver of overall labor force growth – in 1950, only ~35% of women (16+) are in the labor
force, by late 1990s, ~60% of women (16+) are in the labor force – since then, the 60% ratio has remained constant. Source: BLS, 4/13.
1.1%
1.6%
2.0%
1.2% 1.2%
1.1%1.1%
1.7%
2.6%
1.6%
1.3%
0.8%
0%
1%
2%
3%
1950s 1960s 1970s 1980s 1990s 2000s
AnnualGrowthRate(%)
Annualized USA Population & Labor Force Growth Rates, 1950s
to 2000s
Population
Labor Force
U.S. LABOR FORCE GROWTH FALLING AS POPULATION GROWTH
SLOWS, GAINS FROM WOMEN JOINING LABOR FORCE EASE AND
BABY BOOMERS RETIRE
76
USA Birth Rate vs. Population Replacement Rate*, 1960 - 2010
0
1
2
3
4
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
USABirthRate
USA Fertility Rate Replacement Rate
Note: *Population replacement rate is the number of children each woman needs to have to maintain current population
levels. In most developed countries, the natural replacement rate is close to 2.1. Source: World Bank, data as of 2010.
WITHOUT IMMIGRATION, U.S. POPULATION SHRINKS AS
BIRTH RATE FALLS BELOW REPLACEMENT RATE
77
IMMIGRATION COMPETITION?
LET THE GAMES BEGIN…
78
OH, CANADA!
79
GOOD DEAL, EH?
[E]veryone knows the American system is pretty dysfunctional...
I'm going to the Bay Area to spread the message that Canada is
open for business; we're open for newcomers. If they qualify,
we'll give them the Canadian equivalent of a green card as soon
as they arrive…
I’m not going to apologize, and you know what, if you guys cannot
figure out your immigration system, we’re going to invite the best
and the brightest to come north of the border.
- Jason Kenney, Canada Minister of Citizenship, Immigration & Multiculturalism, May 2013
“
”
80
AS COUNTRY-BY-COUNTRY
COMPETITION FOR
HIGH-SKILLED IMMIGRANTS RISES,
AMERICA REMAINS A PREFERRED
DESTINATION
81
AMERICA = #1 GLOBAL DESTINATION FOR IMMIGRANTS
20% (OR 43MM) OF GLOBAL MIGRANTS IN 2010
82
AMERICANS SUPPORT
HIGH-SKILLED IMMIGRATION –
POLICY REFORM CAN MAKE
IT EASIER
83Source: TechNet / Zogby Analytics survey of 1,000 US adults, 3/13.
MANY AMERICANS SUPPORT HIGH-SKILLED
IMMIGRATION & ARE CONCERNED ABOUT
AMERICA’S ROLE AS TECH INNOVATOR
• Support for High-Skilled Immigration – 63% of likely
American voters surveyed believe America faces a shortage of
high-skilled workers and that immigration policy should
encourage high-skilled workers to stay in America.
• Worried about U.S. Innovation Status – ~43% of Americans
surveyed believe next major technology or innovation product
will come from China while only 30% believe this discovery will
come from America.
84
VIEWS FROM TECHNOLOGY LEADERS…
At a time when talent is the key to economic success, it makes no sense to
educate people in our universities, often subsidized by U.S. taxpayers, and
then insist that they return home…our immigration system makes it very
difficult for U.S. firms to hire high-skilled foreign workers. Last year [2008],
at Microsoft, we were unable to obtain H-1B visas for over a third of our
foreign-born candidates.
- Bill Gates (Founder and Chairman) Microsoft
Why do we kick out the more than 40 percent of math and science
graduate students who are not U.S. citizens after educating them? Why do
we offer so few H-1B visas for talented specialists that the supply runs out
within days of becoming available each year, even though we know each
of these jobs will create two or three more American jobs in return? Why
don’t we let entrepreneurs move here when they have what it takes to start
companies that will create even more jobs?
- Mark Zuckerberg (Founder and CEO) Facebook
85
…VIEWS FROM TECHNOLOGY LEADERS…
Improving and increasing high-skilled worker immigration to America will
increase jobs and help drive economic growth.
- Meg Whitman (CEO) Hewlett-Packard
It's critical that America attract the best and brightest minds from around the
world to drive the next wave of technological innovation and economic
growth.
- John Chambers (CEO) Cisco Systems
Continued technological innovation depends on continued growth in technical
talent. As a country, we need to use all of the available tools to increase the
pipeline of Science, Technology, Engineering, and Math (STEM)
professionals - from encouraging young students to pursue degrees in math
and science to ensuring that our immigration policy enables us to tap the
expertise of highly-skilled workers from around the world.
- Tom Leighton (Co-Founder / CEO) Akamai
86
…VIEWS FROM TECHNOLOGY LEADERS…
Immigration has always been a key to America's future. We are more than
a country founded by immigrants. We are a country whose competitive
strengths are entrepreneurship and immigration. When you consider how
many companies are founded by immigrants, you realize that immigration
is fundamental to any long-term economic growth and prosperity … The
high-skill immigration question is simple: Would you rather have more
great technology companies here in the U.S. or abroad?
- Reid Hoffman (Co-founder, Executive Chairman) LinkedIn
(Partner) Greylock
The denial of U.S. visas has forced us to routinely apply for visas in
Canada and Ireland … We prefer that talented workers be able to work in
our American offices as it would be best for our company, people and the
local economy.
- Mark Pincus (Founder / CEO) &
Colleen McCreary (Chief People Officer) Zynga
87
…VIEWS FROM TECHNOLOGY LEADERS…
The tech sector in the U.S. is creating more jobs than it can fill, given the
shortage of American computer science graduates. If we don’t take steps as a
country to address immigration in the short run and improve education in the
long term, then inevitably these jobs will start to leave the United States and
move to other countries.
- Brad Smith (General Counsel) Microsoft
As someone who came to this country as a political refugee, working at a
company co-founded by an immigrant, I know first-hand how much the idea of
America means to the world. The most talented people on the planet dream of
coming here. Our laws, markets and educational system give us a unique and
sustainable competitive advantage relative to other countries. But we will only
realize this advantage if we make it possible for people to stay, build great
businesses, and contribute to our economy. Immigration reform is essential to
our future success, not just at Google, but as a nation.
- Laszlo Bock (SVP People Operations) Google
88
…VIEWS FROM TECHNOLOGY LEADERS…
Our current immigration system is ridiculous - it's disrespectful or even abusive to
amazing immigrants who increasingly have other choices. These people are vital to
our ability to create competitive businesses - which lead to jobs and prosperity - and
we should be fighting to get them here instead of making them confront a
bureaucratic and arbitrary system that might or might not let them in. And we
should be giving them incentives to stay, instead of making them worry as they build
their lives here that they might be kicked out.
- Joe Lonsdale (Partner) Formation 8, (Co-Founder) Palantir Technologies
We need great engineers in order to build great companies. The current immigration
system not only prevents great engineers from working at companies that need
them, but also limits their ability to be entrepreneurs. In order to remain competitive
in the global war for talent, we need a policy that enables the U.S. to both be
competitive and win.
- Mike Abbott (General Partner) Kleiner Perkins
(Former VP, Engineering) Twitter
89
…VIEWS FROM TECHNOLOGY LEADERS
I would argue why not raise the cap to 500,000? Why not 1 million? As long as
they are truly skilled, and there is real demand for their services by U.S.
companies, why limit at all? Why not let the market decide how many are
needed?
If the premise is that STEM jobs create more jobs, which there is plenty of
evidence for, then in my mind, the more the better. And there is no reason to
"protect" U.S. employees because they will benefit from the additional job
openings thanks to the growth which will result from the great talent we will
attract … We see it every day in our companies - if they are able to get great
talent, they are more likely to succeed, grow and create more jobs directly and
indirectly.
- Oren Zeev (Founding Partner) Orens Capital
90
A FIX MAY BE IN THE WORKS…
NEXT STEPS = SENATE FLOOR
DEBATE IN JUNE + HOUSE
DISCUSSION AND PROCESS (MAY BE
MULTIPLE INDIVIDUAL BILLS IN
COMING MONTHS) WITH PUSH
TOWARDS CONFERENCE
91
A LOOK AT KEY PROVISIONS IN THE
IMMIGRATION BILL BEFORE THE SENATE
• Exempt Ph.D.’s and STEM degree holders from U.S. universities
from annual Green Card cap; also would exempt all family
members of foreign workers.
• Boost H-1B base to 115,000 initially, with higher levels in years in
which demand exceeds supply; current exemption for master’s
degree holders increases to 25,000 from 20,000.
• Makes it easier for H-1B holders to change jobs while keeping
visa status.
• Sets rules to make sure H-1B holders aren’t displacing U.S.
workers; requires U.S. employers to recruit U.S. workers.
• Creates fee for each H-1B petition to be paid by employers;
proceeds to fund STEM education and training.
92
IN CLOSING…
93
GROWTH IN PEOPLE
+ JOBS + GDP + PRODUCTIVITY
+ EDUCATION + CONFIDENCE
= KEY TO USA’S SUCCESS
94
[Immigration], I believe, is one of the most important sources
of America's greatness. We lead the world because, unique
among nations, we draw our people - our strength - from every
country and every corner of the world. And by doing so we
continuously renew and enrich our nation…
Thanks to each wave of new arrivals to this land of opportunity,
we're a nation forever young, forever bursting with energy and
new ideas, and always on the cutting edge, always leading the
world to the next frontier. This quality is vital to our future as a
nation. If we ever closed the door to new Americans, our
leadership in the world would soon be lost.
PRESIDENT RONALD REAGAN, 1989
“
”
95
WHAT YOU CAN DO
• With momentum for change building in Congress,
we have a window of opportunity to enact true
reforms that will grow the U.S. economy and
create U.S. jobs.
• You can help keep the focus on Congress to drive
change. Make sure your voice is heard.
96
ACKNOWLEDGEMENTS
• A lot of people helped pull this document together and
helped modify along the way.
• We thank the engineers and tech industry leaders – H1-B
+ green card holders + first generation Americans +
American natives – that inspired us to push forward to
compile the thoughts.
• Special thanks to Eric Savitz, Alix Burns, Mike Abbott,
Juliet DeBaubigny, Fred Miller, Itamar Rosen, Greg Dingle,
Jackson Gorham and John Maier.
• Design by
97
This report has been compiled for informational purposes only and should not to be
construed as a solicitation or an offer to buy or sell securities in any entity.
Contributors to the report cannot guarantee the accuracy or completeness of any of the
data (compiled from public sources believed to be reliable) and make no warranties
(express, implied or statutory) as to the information in it.
The information presented in this report does not necessarily reflect the views of Kleiner
Perkins Caufield & Byers (KPCB) or any of its associated management personnel,
investment vehicles, investors, portfolio companies or any affiliates or associates of the
foregoing.
Subject to the Terms and Conditions of Use http://kpcb.com/terms_of_use applicable to
this Site, KPCB grants users of the Site a limited license to download this report and to
use, reproduce and distribute the report, solely for non-commercial purposes.
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Immigrationinamericaandthegrowingshortageofhigh skilledworkers-130529093319-phpapp01

  • 1. 1 Mary Meeker / Liang Wu 5.29.13 IMMIGRATION IN AMERICA & THE GROWING SHORTAGE OF HIGH-SKILLED WORKERS
  • 2. 2  America’s technology industry is the global leader, thanks in large measure to immigrants.  Immigrants and the children of immigrants helped build some of our most important companies, including Apple, Google, Oracle, Amazon, eBay, Yahoo! and LinkedIn...and this trend continues. These companies drive innovation, create jobs and help grow our economy.  To maintain our leadership advantage and competitive momentum, U.S. firms need the world’s best engineers, programmers, mathematicians and scientists.  Global competition for talent will rise; foreign nations will likely increasingly pursue U.S.-trained talent. While it has become harder to immigrate to America, opportunities to work for tech companies abroad have grown. WHY HIGH-SKILLED IMMIGRATION MATTERS TO U.S. TECHNOLOGY COMPANIES...
  • 3. 3  Many high-skilled foreigners graduate from our top universities. But immigration policy makes it difficult for them to stay in America. In short, we are training many of the most talented students in the world and leaving many of them with these options – go work in another country for a non-U.S. company or work for a U.S. company in another country.  At the same time, tech companies are prevented from bringing into the U.S. enough of the high-skilled workers they need to remain competitive.  As a result, U.S. companies are moving some jobs overseas – and other countries are focused on luring away talented workers who can’t get H-1B visas. …WHY HIGH-SKILLED IMMIGRATION MATTERS TO U.S. TECHNOLOGY COMPANIES
  • 4. 4  In previous reports*, we have provided insights on the U.S. economy – USA, Inc. – and Internet Trends, based on our work in and around the tech industry. We believe the immigration debate merits a similar data- based analysis.  The U.S. needs broad and comprehensive immigration reform to address the large number of undocumented immigrants, border security concerns, the need for agricultural workers and reforming the path to citizenship. In this report, we focus specifically on the shortage of high- skilled tech workers.  We use a data-driven, common-sense approach to understand the many complex threads in the immigration debate.  A better informed public debate over high-skilled immigration would enhance reform efforts now under way in Washington. We hope others take our observations, share them and improve upon them. THE GOAL OF THIS REPORT *To see our previous reports, visit www.kpcb.com/insights
  • 5. 5  Rapid growth in high-speed, inexpensive Internet access – first on PCs, now on mobile phones and tablets and increasingly on devices of all sorts – has transformed the way people (and companies) around the world connect and communicate.  The breadth + depth + speed + magnitude of technology innovation are unprecedented – and accelerating.  Widespread adoption of mobile access to the Internet is a global phenomenon and is still in the early stages of evolution. TECHNOLOGY INNOVATION – THESE ARE UNUSUAL TIMES
  • 6. 6  America’s innovation & leadership in mobile device technology – After ceding leadership to other regions (Europe & Asia), America’s global share of smartphone operating systems has jumped to 88% recently from just 5% in 2005, thanks to Apple and Google.  American leadership in global Internet innovation – 8 of the top 10 top global Internet companies (based on users) are American – led by Google, Microsoft, Facebook, Yahoo!, Wikipedia and Amazon – and 81% of their users are outside the U.S..  How rapidly new U.S. companies have won users to do new things – Like Facebook, Twitter, Linkedin, Tumblr, Groupon, Zynga, Pinterest, Dropbox…  Intensity of competition for high-skilled engineers – Five American technology companies (IBM / Intel / Microsoft / Oracle / Qualcomm) alone have a combined 10,000 current U.S. job openings.  The ability to innovate (and secure capital) is at an all-time high – Coding meets Kickstarter…  …As is the ability of U.S. companies to attract high-skilled tech experts from around the world. TECH INDUSTRY SURPRISES OVER PAST HALF-DECADE
  • 7. 7  America’s tech leaders want to continue to lead in innovation – but to do so, they need to hire the best and brightest.  Demand for science, technology, engineering and math (STEM) experts exceeds supply – U.S. STEM job vacancy rate (unfilled jobs as a share of the labor force) is 3-4 times higher than that of other sectors.  U.S. policy caps H-1B work visas at 85,000/year (including 20,000 exemption for holders of master’s degrees) despite much higher demand.  Native-born Americans account for a declining portion of STEM graduates at U.S. universities – 54% in 2006, down from 74% in 1985.  High-skilled foreign graduates from U.S. universities are often sent home – and thereby prevented from contributing to our economy.  Demand is likely to increase for high-skilled workers – as advanced economies realize the importance of tech skills in a slower-growth world with aging societies.  Opportunity for immigration reform is real and reflects needed changes – and there’s momentum, given Senate Judiciary Committee approval of comprehensive immigration reform measure on May 21. Full Senate debate expected in June. WHERE WE ARE NOW
  • 8. 8 WHERE WE ARE NOW…WHERE WE SHOULD BE The U.S. has the best research universities in the world, which is why we attract the best students from around the world. Forcing them to leave, rather than allowing them to stay and add their skills and knowledge to our economy, is one of the most short-sighted policies we have. - John Hennessy (President) Stanford University With more international students than virtually any university, and graduating more engineers and technologists than any campus anywhere, Purdue sees as clearly as anyone the senselessness of our current policies. It’s time we begin - in the nation’s interest - taking sensible steps to welcome more of the extremely talented people that seek to come and strengthen the American economy...much of that talent prepared and trained at universities like Purdue. - Mitch Daniels (President) Purdue University (Former Governor) Indiana
  • 9. 9 • High-skilled immigration policy should be designed to create jobs and spur economic growth. • Note that high-skilled immigrants contribute significantly to the economy yet account for only ~3% of America’s workforce (and fewer than 15% of all legal immigrants). • All in, immigrants account for ~16% of America’s workforce; almost one-third are undocumented. WHERE WE SHOULD BE…
  • 10. 10 • Increase H-1B Quotas – There is clear evidence that we need a higher cap on H-1B visas for foreign STEM workers. • Keep More Foreign Graduates in the U.S. – We should make a greater effort to retain the large number of non-Americans getting advanced degrees (especially in STEM areas) from U.S. universities, while making sure that the system does not simply become a short-cut to getting an easy Green Card. • Streamline Immigration Process / Paperwork – Reduce current backlog, create predictable and easier process by increasing efficiency across government agencies related to immigration. • Ensure American Worker Wage and Job Protection – Follow the compromise in recent Senate legislation which creates good rules of the road for H1-B visa dependent and non-dependent companies. • Create a New, Dedicated Visa for Entrepreneurs – H-1B visas focus on job seekers with advanced degrees; we should offer an alternative for people creating new technology businesses (as Canada does.) …WHERE WE SHOULD BE
  • 11. 11 Our journey is not complete until we find a better way to welcome the striving, hopeful immigrants who still see America as a land of opportunity, until bright young students and engineers are enlisted in our workforce rather than expelled from our country. PRESIDENT BARACK OBAMA, 2013 “ ”
  • 12. 12 AMERICA IS A COUNTRY OF IMMIGRANTS
  • 13. 13 0.9% 15% 11% 9% 15% 13% 16% 5% 15% 0% 20% 40% 60% 80% 100% Native Americans Immigrants or Descendants of Immigrants German Irish English Other European African American* Hispanic Asian Other / Unclassified 3 Million 306 Million USA Population by Ancestry, 2010 Census Note: *African-American total includes those who came as slaves and not as voluntary immigrants. Other includes North America (Canada), Australia, New Zealand, and those who have more than one ethnicity reported. Source: Census Bureau, 2010 data. 99% OF AMERICANS ARE IMMIGRANTS OR DESCENDANTS OF IMMIGRANTS
  • 14. 14 270MM U.S. Born 87% of Total Population 4MM, 1% 19MM, 6% 6MM, 2% 11MM, 4% 40MM Immigrants 13% Legal Immigrants (High-Skilled) Legal Immigrants (Family-Based) Legal Immigrants (Refugees & Other) Undocumented Immigrants Total USA Population = 310MM Note: Number of undocumented immigrants currently residing in USA is an estimate by PewResearch Hispanic Center based on Census data. Precise breakdown of legal immigrants currently residing in USA by type of admission is not available and is an estimate based on Census data as well as Department of Homeland Security immigrant admission data from 1986 to 2010. Source: Census Bureau, PEW, DHS. HIGH-SKILLED IMMIGRANTS ARE ONLY 1% OF TOTAL U.S. POPULATION U.S. Population at a Glance, U.S. Born vs. Immigrants by Type of Admission, 2010
  • 15. 15 WHY PEOPLE COME TO AMERICA – THE SPIRIT OF FREEDOM & OPPORTUNITY
  • 16. 16 ECONOMIC OPPORTUNITY + RULE OF LAW = KEY DRIVERS OF IMMIGRATION TO AMERICA Note: *Numbers may not add up to 100 due to rounding. Source: Public Agenda survey of 1,138 foreign born adults via telephone interviews conducted between 4/23 & 6/7/2009. Having a trustworthy legal system Having more opportunity to earn a good living Making good health care available Having a good education system Being a good place to raise children Having free and independent media and free expression Having a higher standard of morality Letting people practice the religion they choose For each of the following, please tell me if you think the United States or your home country does a better job when it comes to the item, or if they’re about the same?*
  • 17. 17 PRESIDENT RONALD REAGAN, 1988 You can go to live in France, but you cannot become a Frenchman. You can go to live in Germany or Turkey or Japan, but you cannot become a German, a Turk, or a Japanese. But anyone, from any corner of the Earth, can come to live in America and become an American. “ ”
  • 18. 18 IMMIGRANTS HAVE BEEN KEY TO AMERICA’S ECONOMIC SUCCESS
  • 19. 19 The essence of America – that which really unites us – is not ethnicity, or nationality or religion – it is an idea – and what an idea it is: That you can come from humble circumstances and do great things. That it doesn’t matter where you came from but where you are going. SECRETARY OF STATE CONDOLEEZZA RICE “ ”
  • 20. 20Source: The “New American” Fortune 500, June 2011 A Report By The Partnership For A New American Economy. 19% 23% 58% Founders of 2012 "Fortune 500" Companies Immigrant Child of Immigrant All Others 42% OF AMERICA’S FORTUNE 500 COMPANIES FOUNDED BY 1st OR 2nd GENERATION IMMIGRANTS…
  • 21. 21 4MM 7MM15MM Total Jobs Created by Fortune 500 Companies = 25 Million Immigrant Child of Immigrant All Others $1,732B $2,807B $7,211B 2012 Total Revenue by Fortune 500 Companies = $12 Trillion …THESE COMPANIES HAVE CREATED 10+ MILLION JOBS AND $4.5 TRILLION OF ANNUAL REVENUE (= TO 30% OF USA GDP) 10+ Million Jobs Created by Immigrant Founded Companies, 41% of Total Fortune 500 $4.5 Trillion Annual Revenue by Immigrant Founded Companies, 30% of USA GDP, 39% of Total Fortune 500 Source: FactSet, data as of 4/13.
  • 22. 22 7 OF 10 MOST VALUABLE & RECOGNIZABLE GLOBAL BRANDS FOUNDED BY 1st & 2nd GENERATION IMMIGRANTS Source: The “New American” Fortune 500, June 2011 A Report By The Partnership For A New American Economy.
  • 23. 23 1820 TO 1950 – AMERICA’S ECONOMIC GROWTH WAS EXTRAORDINARY, DRIVEN BY IMMIGRANTS & THEIR DESCENDANTS
  • 24. 24 0% 2% 4% 6% 8% 10% 0% 5% 10% 15% 20% 25% 30% 35% 40% 1820 1835 1850 1865 1880 1895 1910 1925 1940 1955 1970 1985 2000 %ofWorldPopulation %oftheWorldGDP USA GDP as % of World (Left Axis) USA Population as % of World (Right Axis) USA Percent of Global GDP & Global Population, 1820 – 2012 GDP Share Peak @ 36%, 1944 Population Share Peak @ 6%, 1950s Source: Angus Maddison, University of Groningen, OECD. GDP & population data from 1980 to 2012 based on adjusted World Bank / IMF data. Note population & GDP growth highly correlated (92%). U.S. SHARE OF WORLD GDP PEAKED JUST AS POPULATION AS % OF WORLD PEAKED
  • 25. 25 44% 24% 34% 2% 9% 11% 16% 18% 30% 31% 36% 0% 10% 20% 30% 40% 50% 1900-09 1910-19 1920-29 1930-39 1940-49 1950-59 1960-69 1970-79 1980-89 1990-99 2000-08 %ofUSAPopulationGrowthfrom Immigration USA Population Growth from Immigration, 1900-2008 Source: Census Bureau, data as of 2008. IMMIGRANTS HAVE NEARLY ALWAYS ACCOUNTED FOR MATERIAL PORTION OF AMERICA’S POPULATION GROWTH
  • 26. 26 1980 TO 2013 – AS THE WORLD HAS GROWN MORE COMPETITIVE, AMERICA HAS LOST SHARE OF GLOBAL ECONOMIC GROWTH
  • 27. 27 0% 10% 20% 30% 40% %ofGlobalGDP USA Europe China India Latin America AS CHINA AND INDIA GAINED SHARE OF GLOBAL GDP, AMERICA’S SHARE HAS DECLINED Percent of Global GDP, 1820 – 2012. USA vs. Europe vs. China vs. Latin America vs. India Source: Angus Maddison, University of Groningen, OECD, data post 1980 per IMF (GDP adjusted for purchasing power parity). 27% 16% 33% 15% 2% 19%16% 6% 8% 2%
  • 28. 28 BUT AMERICA IS THE GLOBAL LEADER IN TECHNOLOGY AND INTERNET… AND IMMIGRANTS HAVE MADE OUTSIZED CONTRIBUTIONS AS FOUNDERS AND KEY PERSONNEL
  • 29. 29 Company Mkt Cap ($MM) Apple $416,622 Google 268,445 IBM 239,530 Microsoft 234,828 Oracle 172,044 Amazon.com 119,011 Cisco 116,904 Intel 105,721 Ebay 65,357 Facebook 63,472 EMC 53,347 Hewlett-Packard 43,118 Texas Instruments 38,756 VMware 35,917 Priceline 35,583 Automatic Data Processing 31,274 salesforce.com 25,840 Dell 25,003 Yahoo! 24,306 Cognizant Technology 23,648 Adobe Systems 20,640 Broadcom 19,713 Intuit 19,393 LinkedIn 19,357 Symantec 16,916 Other U.S. Tech Companies 622,632 Total $2,857,376 AMERICAN TECHNOLOGY COMPANIES = 69% OF GLOBAL PUBLIC TECH MARKET CAPITALIZATION Total USA Public Technology Companies = $2.9 Trillion in Aggregate Market Capitalization USA Public Technology Companies* = 69% of Aggregate Market Capitalization of Global Top 100 Technology Companies USA 69% Europe 8% Japan 7% S. Korea 6% Other 4% India 3% China 3% USA* = $2,519B Europe = $298B Japan = $245B S. Korea = $203B India = $118B China = $111B ROW = $160B Note: *While total USA tech companies support aggregate market cap of $2.9T as of 3/13, those in the global top 100 support aggregate market cap of $2.5T. Source: FactSet, data as of 3/13.
  • 30. 30 Top 10 Internet Properties by Global Monthly Unique Visitors, 2/13 Source: comScore Global, 2/13. 0 200 400 600 800 1,000 1,200 Baidu.com Tencent Glam Media Apple Amazon.com Wikipedia Yahoo! Facebook Microsoft Google Monthly Unique Visitors (MMs) USA Users International Users 80% OF TOP 10 GLOBAL INTERNET PROPERTIES ‘MADE IN USA’…81% OF USERS OUTSIDE USA
  • 31. 31 INNOVATIONS IN MOBILE CONNECTIVITY HAVE TILTED TECH INDUSTRY MARKET SHARE TO AMERICA Source: 2005 data per Gartner, 2012 data per IDC. Global Smartphone Operating System Market Share (by Units Shipped), 2005 vs. 2012 2005 2012 0% 20% 40% 60% 80% 100% MarketShareofSmartphoneOS Other OS Apple iOS Google Android Microsoft Windows Phone BlackBerry OS Linux Nokia Symbian Made in USA Operating systems 88% 5%
  • 32. 32 IMMIGRANTS ARE KEY DRIVERS OF INNOVATION & GROWTH IN AMERICA’S TECHNOLOGY INDUSTRY Percentage of Companies Founded by Immigrants, 2007 Foreign-National Contribution to U.S. Global Patent Applications, 1998-2006 Immigrant-Founded Start-Ups as Percent of Total in Tech Centers, 2007 Source: The Kauffman Foundation, America’s New Immigrant Entrepreneurs reports, published in 2007. Defense / Aerospace Environmental Bioscience All Industry Fields Innovation / Manufacturing-Related Services Software Computers / Communications Semiconductors 8% 9% 20% 25% 26% 28% 32% 35% 60% 50% 40% 30% 20% 10% 0 Portland Research Triangle Park Denver Seattle Austin D.C Boston San Diego Chicago N.Y Silicon Valley 30% 25% 20% 15% 10% 5% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 %ofTotal %ofTotal
  • 33. 33 Founders / Co-Founders of Top 25 U.S. Public Tech Companies, Ranked by Market Capitalization 60% OF TOP 25 TECH COMPANIES FOUNDED BY 1st & 2nd GENERATION AMERICANS = 1.2MM EMPLOYEES, 2012 *Note that while Andy Grove (from Hungary) is not a co-founder of Intel, he joined as COO on the day it was incorporated. **Francisco D’souza is a person of Indian origin born in Kenya. Source: FactSet as of 3/13; “The ‘New American’ Fortune 500”, a report by the Partnership for a New American Economy; “American Made, The Impact of Immigrant Founders & Professionals on U.S. Corporations” Rank Company C o Mkt Cap ($MM) LTM Rev ($MM) Employees 1st or 2nd Gen Immigrant Founder / Co-Founder Generation 1 Apple S $416,622 $164,346 76,100 Steve Jobs 2nd-Gen, Syria 2 Google S 268,445 49,958 53,861 Sergey Brin 1st-Gen, Russia 3 IBM S 239,530 104,507 434,246 Herman Hollerith 2nd-Gen, Germany 4 Microsoft S 234,828 72,764 94,000 -- -- 5 Oracle S 172,044 37,230 115,000 Larry Ellison / Bob Miner 2nd-Gen, Russia / 2nd-Gen, Iran 6 Amazon.com S 119,011 61,093 88,400 Jeff Bezos 2nd-Gen, Cuba 7 Cisco S 116,904 47,252 66,639 -- -- 8 Intel S 105,721 53,341 105,000 --* -- 9 Ebay S 65,357 14,028 31,500 Pierre Omidyar 1st-Gen, France 10 Facebook S 63,472 5,089 4,619 Eduardo Saverin 1st-Gen, Brazil 11 EMC S 53,347 21,714 60,000 Roger Marino 2nd-Gen, Italy 12 Hewlett-Packard S 43,118 118,397 331,800 -- -- 13 Texas Instruments S 38,756 12,690 34,151 Cecil Green / J. Erik Jonsson 1st-Gen, UK / 2nd-Gen, Sweden 14 VMware S 35,917 4,605 13,800 Edouard Bugnion 1st-Gen, Switzerland 15 Priceline S 35,583 5,261 7,000 -- -- 16 Automatic Data Processing S 31,274 10,945 57,000 Henry Taub 2nd-Gen, Poland 17 salesforce.com S 25,840 3,050 9,800 -- -- 18 Dell S 25,003 56,982 111,300 -- -- 19 Yahoo! S 24,306 4,987 11,700 Jerry Yang 1st-Gen, Taiwan 20 Cognizant Technology S 23,648 7,346 156,700 Francisco D'souza / Kumar Mahadeva 1st-Gen, India** / 1st-Gen, Sri Lanka 21 Adobe Systems S 20,640 4,373 11,144 -- -- 22 Broadcom S 19,713 8,006 11,300 Henry Samueli 2nd-Gen, Poland 23 Intuit S 19,393 4,153 8,500 -- -- 24 LinkedIn S 19,357 972 3,458 Konstantin Guericke / Jean-Luc Vaillant 1st-Gen, Germany / 1st-Gen, France 25 Symantec S 16,916 6,839 20,500 -- -- Total Founded by 1st or 2nd Gen Immigrants $1,590,800 $507,516 1,151,835
  • 34. 34 JOBS AT TOP 50 U.S. TECH COMPANIES GREW 4X TO 2.5 MILLION OVER 2 DECADES 0 500 1,000 1,500 2,000 2,500 3,000 1993 1996 1999 2002 2005 2008 2011 AggregateNumberof Employees(000s) Aggregate number of employees among (current) Top 50 Public USA Technology Companies by Market Cap, 1993-2013 YTD Source: FactSet as of 3/13.
  • 35. 35 42% of Scientists in Top 7 U.S. Cancer Research Centers Are Foreign Born • University of Texas MD Anderson – 62% • Memorial Sloan-Kettering Cancer Center – 56% • Fox Chase Cancer Center – 44% • Johns Hopkins Sidney Kimmel Comprehensive Center – 35% • Dana-Farber Cancer Institute – 33% • UCSF Diller Family Comprehensive Cancer Center – 32% • Fred Hutchinson Cancer Research Center – 30% BEYOND COMPUTING Source: National Foundation for American Policy, based on National Cancer Institute data, policy brief published in 2013.
  • 36. 36 STEM (SCIENCE / TECHNOLOGY / ENGINEERING / MATH)-RELATED EMPLOYMENT HAS INCREASED ~2X FASTER THAN NON-STEM EMPLOYMENT…
  • 37. 37 0% 2% 4% 6% 8% 0MM 2MM 4MM 6MM 8MM 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 %ofTotalUSAWorkforce USAScience&EngineeringWorkers USA Science & Engineering Workers & % of Workforce, 1983-2010 Science & Engineering Workers (MMs) % of USA Workforce Note: *Potentially understated - according to the National Science Foundation, over 4 million people in America use their science & engineering degree in their job even though their occupation is not formally classified as a science & engineering occupation. Source: National Science Board, data as of 2010. U.S. DEMAND FOR HIGH-SKILLED STEM WORKERS KEEPS GROWING – 7MM STEM WORKERS* IN 2010, UP FROM 3MM IN 1983
  • 38. 38 Total USA Employment % Change from 2000 by Sector, 2000-2012 40-85%* INCREASE IN STEM + CMS* JOBS VS. 30% FOR NON-STEM JOBS SINCE 2000 Note: *CMS is Computer / Math Sciences. Source: U.S. Census Bureau, Current Population Survey (CPS); Ian Hathaway, Engine.is report published in 2013. Note: Data have been smoothed using a 12- month moving-average. EmploymentChange(%)Since2000
  • 39. 39 Job Openings as % of Respective Labor Force by Sector, 2005-2012 Note: Calculated as job openings in each sector divided by labor force in each sector. Note that the job vacancy data used here aren’t available by level of educational attainment. Therefore, we are unable to restrict this portion of the analysis to workers with a bachelor’s degree or more. As a result, the differences here between STEM, Computer / Math Sciences & non-STEM may be somewhat overstated. Source: Ian Hathaway (Engine.is) analysis of data from U.S. Census Bureau, CPS; Conference Board; Bureau of Labor Statistics, JOLTS. 3-4X* MORE STEM JOB OPENINGS THAN NON-STEMJobOpeningsasaShareofLaborForce
  • 40. 40 …BUT AMERICA CANNOT FILL ALL STEM-RELATED JOB OPENINGS…
  • 41. 41 122,300 51,474 0 50,000 100,000 150,000 # of Job Openings Requiring a Bachelor's Degree in Computer Science # of Graduates w/ Bachelor's Degree in Computer Science Number of People, per Year Source: Microsoft analysis (released in 2013) based on Bureau of Labor Statistics data. COMPUTER SCIENCE JOB OPENING FORECAST = 2.4X # OF COMPUTER SCIENCE GRADUATES Projected Average Annual # of Graduates w/ Bachelor’s Degree in Computer Science vs. # of Job Openings Requiring a Bachelor’s Degree in Computer Science, 2010-2020E
  • 42. 42 View outside of Quixey’s office on Castro St. in Mountain View, CA. Source: Joshua Stanton-Savitz. STREET VIEW – COMPANIES & STARTUPS CAN’T HIRE ENOUGH ENGINEERS 42View outside of Quixey’s office on Castro St. in Mountain View, CA. Photo: Joshua Stanton-Savitz, 5/13.
  • 43. 43 FIVE HIGH-TECH COMPANIES ALONE – IBM, INTEL, MICROSOFT, ORACLE AND QUALCOMM – HAVE COMBINED 10,000 CURRENT OPENINGS IN THE UNITED STATES. Source: Technology CEO letter to the president and lawmakers, 3/13. http://www.scribd.com/doc/130388692/Tech-CEO-letter
  • 44. 44 DEMAND FOR STEM GRADUATES / EXPERTS HAS RISEN DRAMATICALLY…
  • 45. 45 U.S. EMPLOYER DEMAND FOR STEM EXPERTS / GRADUATES CONTINUES TO RISE… Sustained Growth is Projected for STEM Occupations Relative Employment Levels vs. 2006 Employment (2006=100), by Occupation Source: Chairman’s staff of the Joint Economic Committee based on data from the Bureau of Labor Statistics. The BLS does not project employment for individual years from 2010-20. For the purposes of this chart, Life Sciences excludes Medical Sciences. Report published in 2012. RelativeEmploymentLevelsvs.2006Level (2006=100)
  • 46. 46 …WHILE SUPPLY OF NATIVE- BORN STEM GRADUATES / EXPERTS HAS FALLEN ON RELATIVE BASIS
  • 47. 47 STEM DEGREES HAVE FALLEN AS % OF DEGREES GRANTED IN AMERICA... Source: Chairman’s staff of the Joint Economic Committee based on data from the Department of Education’s National Center for Education Statistics: Integrated Postsecondary Education Data, STEM Degrees include degrees in: Engineering, Physical Sciences, Geosciences, Math and Computer Sciences and Life Sciences (except Medical Sciences). Report published in 2012. A Smaller Percentage of Degrees Are STEM Degrees STEM Degrees as a Share of All Degrees Granted, 1985 - 2009 STEMDegreesas%ofAllDegreesGranted
  • 48. 48 …WHILE U.S.-BORN STUDENTS HAVE FALLEN TO 54% (2006) FROM 74% (1985) OF U.S. STEM DOCTORATE GRADUATES Source: Chairman’s staff of the Joint Economic Committee based on data from the Department of Education’s National Center for Education Statistics: Integrated Postsecondary Education Data, STEM Degrees include degrees in: Engineering, Physical Sciences, Geosciences, Math and Computer Sciences and Life Sciences (except Medical Sciences). Report published in 2012. Share of STEM Doctorates Granted to U.S. Domestic Students, 1985 - 2006 STEM Doctorates as a Share of All Doctorates Granted, 1985 - 2009 %ofSTEMDoctoratesGrantedtoU.S.Domestic Students/STEMDoctoratesas%ofAllDoctorates
  • 49. 49 First University Degrees in Natural Sciences, By Selected Country/Economy, 1998–2008 Note: *Data for selected countries not available in 2007-2009. Natural sciences include physical, biological, environmental agricultural, computer sciences and mathematics. SOURCES: Organisation for Economic Co-operation & Development, Education Online database, http://www.oecd.org/education; & national statistical offices. Science & Engineering Indicators 2012 Doctoral Degrees in Engineering, By Selected Region/Country, 2000 To Most Recent Year* GLOBAL SCIENCE & ENGINEERING GRADUATION RATES INCREASINGLY FAVOR CHINA EngineeringNatural Sciences Degreesin000s Degreesin000s
  • 50. 50 TO REMAIN COMPETITIVE, AMERICAN COMPANIES WANT TO HIRE BEST & BRIGHTEST FROM AROUND WORLD…
  • 51. 51 …BUT AMERICAN COMPANIES ARE CONSTRAINED BY CAPS ON H-1B VISAS (85,000 ANNUALLY – OR < 0.03% OF U.S. POPULATION). THERE’S DEMAND FOR AT LEAST 150,000 PER YEAR.
  • 52. 52 U.S. DEMAND FOR H-1B WORKERS HAS EXCEEDED CAPS Number of Initial Petitions for New H-1B Workers Submitted by Employers Relative to the Cap, 2000 – 2009#ofPetitionsin000s K K K K Source: GAO analysis of Homeland Security data, Testimony Before the Subcommittee on Immigration Policy and Enforcement, Committee on the Judiciary, House of Representatives. Report published in 2011.
  • 53. 53 ECONOMIC GROWTH & EMPLOYER DEMAND IMPLY MORE H-1B VISAS SHOULD BE GRANTED
  • 54. 54 0 100 200 300 400 $10 $11 $12 $13 $14 1999 2001 2003 2005 2007 2009 2011 NumberofVisasIssued(000s) USARealGDP($T) USA Real GDP* vs. Employment (H-1B) Visas Issued per Year, 1999 - 2012 Real GDP ($T) H-1B Employment Visa Issued SINCE 1999, U.S. REAL GDP UP 26% WHILE ANNUAL H-1B VISAS GRANTED REMAINED CONSTANT & ANNUAL H-1B QUOTA DECLINED Note: *Real GDP adjusted for inflation. Source: BEA, State Dept. data as of 2012. 2005-2012 85K H-1B Visas Subject to Cap 2004 65K 1999-2000 115K 2001-2003 195K
  • 55. 55Source: Brookings Institute, USCIS, 2013. H-1B Visa Annual Cap & Availability Windows For Employers, 1999-2014 FLAT H-1B WORK VISA QUOTA BLOCKING U.S. FIRMS FROM HIRING SKILLED WORKERS THEY NEED Annual Cap on H-1B visas H-1B Availability Windows
  • 56. 56 HIRING H-1B WORKERS DOES NOT DISPLACE AMERICAN WORKERS – DATA IMPLY NEW AMERICAN JOBS ARE CREATED
  • 57. 57 7.5 4.7 Firms w/ <5,000 Workers Firms w/ 5,000-10,000 Workers 0 2 4 6 8 10 NewEmploymentperH-1B Application New Employment per H-1B Application, by Company Size, 2002-2005 Average New Employment per H-1B Application = 5.0 Source: National Foundation for American Policy (NFAP) Study based on 2002-2005 data, report published in 2008. COMPELLING CORRELATION BETWEEN H-1B APPLICATIONS & NEW AMERICAN JOBS CREATED
  • 58. 58 Impact of H-1B Visa Restrictions % of Surveyed Companies Agreeing Hired more people (or outsourced work) outside of USA 65% Delayed or changed plans for projects 46% Affected competitiveness against foreign competitors 74% Source: 2008 NFAP survey response from 27 companies who are members of TechNet, the Semiconductor Industry Association (SIA) and the larger corporate members of SEMI (Semiconductor Equipment and Materials International). RESTRICTING H-1B QUOTAS HAS FORCED AMERICAN COMPANIES TO HIRE & RELOCATE WORKERS ABROAD
  • 59. 59 PLAYING BY THE RULES PRIMER ON H-1B VISAS & GREEN CARDS
  • 60. 60 SO, YOU WANT AN H-1B VISA? Congress capped annual new visas at 85,000 in 2004… And you need to be sponsored by an employer. If you lose your job, you need to leave the country, unless you find a new sponsor or switch to another kind of visa (like a student or visitor visa). For foreigners to get an H-1B visa to work in the U.S., you’ll need to be a skilled worker… With at least a bachelor’s degree… …in designated “specialty occupations.” You can stay up to six years, if your visa is renewed but they are hard to get.
  • 61. 61 BUT WAIT…YOU WANT TO STICK AROUND? • H-1B visa holders who want to stay in the country can apply for a Green Card – which lets you stay permanently. After five years, Green Card holders can apply to be citizens. • Green Card holders can live and work in the U.S. on a permanent basis… • …But they aren’t easy to get. • There’s an annual quota of 140,000 for skilled workers and professionals… • …And a per-country quota of no more than 7% of total Green Cards issued, regardless of size of population of the country… • …So it could take up to 10 years or longer for skilled professionals from some countries to get approved for Green Cards. • As a result, many more H-1B visa holders must seek renewal status while their Green Card applications are being processed.
  • 62. 62 • In 1979 – 18% • In 1997 – 28% • In 2006 – 35% Foreign-born engineering professors • In 1979 – 10% • In 1997 – 25% • In 2006 – 31% Foreign-born math/computer sciences professors WHILE FOREIGN-BORN PROFESSORS PLAY A MAJOR ROLE IN U.S. COLLEGES AND UNIVERSITIES… Source: National Science Foundation survey of full-time faculty who received Ph.D.’s from American institutions, 2011
  • 63. 63 …U.S. POLICIES FORCE MANY AMERICAN-EDUCATED FOREIGN STUDENTS TO RETURN HOME
  • 64. 64 0 100 200 300 400 500 600 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 NumberofVisasIssued(000s) Number of Student Visas (F1) vs. Employment (H-1B) Visas Issued per Year, 1992 - 2012 F1 Student Visa Issued H-1B Employment Visa Issued ~100K Difference ~350K Difference 85K H-1B Visas Subject to Cap Source: U.S. Department of State, as of 5/13. U.S. SENDING MORE QUALIFIED FOREIGN STUDENTS HOME POST GRADUATION – 3.5X RISE IN STUDENT & EMPLOYMENT VISA ISSUANCE GAP OVER DECADE
  • 65. 65 Data as of January 2012, Examples for illustration purpose only. The individual's qualifications and the requirements of their job determines the actual waiting time. HIGH-SKILLED IMMIGRANTS CAN WAIT 35 YEARS OR MORE FOR GREEN CARDS How long must I wait? Estimated time to acquire a U.S. green card.
  • 66. 66 ALL IN, HIGH-SKILLED IMMIGRANTS ACCOUNTED FOR <15% OF LEGAL IMMIGRANTS IN 2012
  • 67. 67 65% 15% 13% 4% 3% Total Legal Immigrants = 10.5 Million, 2002-2011 Family Based (Relatives of US Citizens) Employment Based (High-Skilled Immigrants) Refugees & Asylees Diversity Based (Encourage Immigration from Smaller Countries) Other “HIGH-SKILLED” IMMIGRANTS = ONLY 15% OF LEGAL IMMIGRANTS IN PAST DECADE Source: Department of Homeland Security. Data as of 2011.
  • 68. 68 USA RIVALS, MORE FOCUSED ON JOB CREATION AND COMPETITIVENESS, GRANT 7X MORE GREEN CARDS BASED ON SKILLS (ON RELATIVE BASIS) THAN AMERICA DOES
  • 69. 69 Percentage of All Green Cards Distributed by Each Country That Are Employment-Based, 2010 U.S. PEERS ISSUE 7X MORE GREEN CARDS ON RELATIVE BASIS THAN U.S. AS THEY TARGET IMMIGRATION FOR JOBS + SKILLS Source: OECD (2012), “Trends in International Migration Flows and in the Immigrant Population.” Weighted Average (ex. USA) = 50% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0 %ofGreenCardsDistributed
  • 70. 70 0 300 600 900 1,200 1,500 1986 1988 1996 1998 2000 2002 2004 2006 2008 2010 2012 0% 15% 30% 45% 60% 75% TotalLegalImmigrantsAdmitted(000s) %ofTotalImmigrantsAdmitted USA Number of Immigrants by Type of Admission, 1986 - 2012 Total Legal Immigrants Admitted (000s) % Family-Based % Employment-Based % Refugees & Asylees % Other Source: Department of Homeland Security, data as of 2012. 73% 66% U.S. IMMIGRATION POLICY OF PAST 30+ YEARS FOCUSED ON FAMILY REUNIFICATION (66% OF IMMIGRANTS), NOT HIGH-SKILLED IMMIGRANTS
  • 71. 71 GLOBAL COMPETITION FOR HIGH-SKILLED IMMIGRANTS WILL LIKELY INTENSIFY AS ECONOMIC GROWTH SLOWS & SOCIETIES AGE & COUNTRIES PURSUE ECONOMIC GROWTH DRIVERS
  • 72. 72 -6% -4% -2% 0% 2% 4% 6% 8% 10% 1950 1960 1970 1980 1990 2000 2010 2020E RealGDPY/YGrowth(%) USA Real GDP Annual Growth Europe Real GDP Growth USA Trendline European Trendline USA + Europe Real Annual GDP Growth, 1950-2020E Note: Real GDP adjusts for inflation. Source: BEA, IMF, data as of 4/13. ECONOMIC GROWTH IS SLOWING IN MOST DEVELOPED COUNTRIES / REGIONS – INCLUDING USA / EUROPE
  • 73. 73 Growth in Potential Labor Force (Population Aged 15-59), Indexed to 1950 level = 100 Source: Jack A. Goldstone, Brookings Institute based on projection by United Nations. Report published in 2011. MANY MAJOR ECONOMIES (LIKE CHINA / RUSSIA / EUROPE / JAPAN / S. KOREA) LIKELY TO EXPERIENCE LABOR FORCE DECLINES IndexedValue(1950level=100)
  • 74. 74 10 20 30 40 50 1950 1960 1970 1980 1990 2000 2010 MedianAge Median Age by Country, 1950-2010 Japan Europe Russia USA China Latin America India Source: United Nations, Population Division. Data as of 2010. SOCIETIES ARE AGING IN MOST DEVELOPED COUNTRIES / REGIONS – U.S. MEDIAN AGE WAS 37 IN 2010, UP FROM 30 IN 1950
  • 75. 75 Note: Labor force includes all employed & unemployed civilians 16 years old & over. It does not include those who have no job & are not looking for one. Many who are not in the labor force are going to school or are retired. Family responsibilities keep others out of the labor force. Women joining labor force has been a key driver of overall labor force growth – in 1950, only ~35% of women (16+) are in the labor force, by late 1990s, ~60% of women (16+) are in the labor force – since then, the 60% ratio has remained constant. Source: BLS, 4/13. 1.1% 1.6% 2.0% 1.2% 1.2% 1.1%1.1% 1.7% 2.6% 1.6% 1.3% 0.8% 0% 1% 2% 3% 1950s 1960s 1970s 1980s 1990s 2000s AnnualGrowthRate(%) Annualized USA Population & Labor Force Growth Rates, 1950s to 2000s Population Labor Force U.S. LABOR FORCE GROWTH FALLING AS POPULATION GROWTH SLOWS, GAINS FROM WOMEN JOINING LABOR FORCE EASE AND BABY BOOMERS RETIRE
  • 76. 76 USA Birth Rate vs. Population Replacement Rate*, 1960 - 2010 0 1 2 3 4 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 USABirthRate USA Fertility Rate Replacement Rate Note: *Population replacement rate is the number of children each woman needs to have to maintain current population levels. In most developed countries, the natural replacement rate is close to 2.1. Source: World Bank, data as of 2010. WITHOUT IMMIGRATION, U.S. POPULATION SHRINKS AS BIRTH RATE FALLS BELOW REPLACEMENT RATE
  • 79. 79 GOOD DEAL, EH? [E]veryone knows the American system is pretty dysfunctional... I'm going to the Bay Area to spread the message that Canada is open for business; we're open for newcomers. If they qualify, we'll give them the Canadian equivalent of a green card as soon as they arrive… I’m not going to apologize, and you know what, if you guys cannot figure out your immigration system, we’re going to invite the best and the brightest to come north of the border. - Jason Kenney, Canada Minister of Citizenship, Immigration & Multiculturalism, May 2013 “ ”
  • 80. 80 AS COUNTRY-BY-COUNTRY COMPETITION FOR HIGH-SKILLED IMMIGRANTS RISES, AMERICA REMAINS A PREFERRED DESTINATION
  • 81. 81 AMERICA = #1 GLOBAL DESTINATION FOR IMMIGRANTS 20% (OR 43MM) OF GLOBAL MIGRANTS IN 2010
  • 82. 82 AMERICANS SUPPORT HIGH-SKILLED IMMIGRATION – POLICY REFORM CAN MAKE IT EASIER
  • 83. 83Source: TechNet / Zogby Analytics survey of 1,000 US adults, 3/13. MANY AMERICANS SUPPORT HIGH-SKILLED IMMIGRATION & ARE CONCERNED ABOUT AMERICA’S ROLE AS TECH INNOVATOR • Support for High-Skilled Immigration – 63% of likely American voters surveyed believe America faces a shortage of high-skilled workers and that immigration policy should encourage high-skilled workers to stay in America. • Worried about U.S. Innovation Status – ~43% of Americans surveyed believe next major technology or innovation product will come from China while only 30% believe this discovery will come from America.
  • 84. 84 VIEWS FROM TECHNOLOGY LEADERS… At a time when talent is the key to economic success, it makes no sense to educate people in our universities, often subsidized by U.S. taxpayers, and then insist that they return home…our immigration system makes it very difficult for U.S. firms to hire high-skilled foreign workers. Last year [2008], at Microsoft, we were unable to obtain H-1B visas for over a third of our foreign-born candidates. - Bill Gates (Founder and Chairman) Microsoft Why do we kick out the more than 40 percent of math and science graduate students who are not U.S. citizens after educating them? Why do we offer so few H-1B visas for talented specialists that the supply runs out within days of becoming available each year, even though we know each of these jobs will create two or three more American jobs in return? Why don’t we let entrepreneurs move here when they have what it takes to start companies that will create even more jobs? - Mark Zuckerberg (Founder and CEO) Facebook
  • 85. 85 …VIEWS FROM TECHNOLOGY LEADERS… Improving and increasing high-skilled worker immigration to America will increase jobs and help drive economic growth. - Meg Whitman (CEO) Hewlett-Packard It's critical that America attract the best and brightest minds from around the world to drive the next wave of technological innovation and economic growth. - John Chambers (CEO) Cisco Systems Continued technological innovation depends on continued growth in technical talent. As a country, we need to use all of the available tools to increase the pipeline of Science, Technology, Engineering, and Math (STEM) professionals - from encouraging young students to pursue degrees in math and science to ensuring that our immigration policy enables us to tap the expertise of highly-skilled workers from around the world. - Tom Leighton (Co-Founder / CEO) Akamai
  • 86. 86 …VIEWS FROM TECHNOLOGY LEADERS… Immigration has always been a key to America's future. We are more than a country founded by immigrants. We are a country whose competitive strengths are entrepreneurship and immigration. When you consider how many companies are founded by immigrants, you realize that immigration is fundamental to any long-term economic growth and prosperity … The high-skill immigration question is simple: Would you rather have more great technology companies here in the U.S. or abroad? - Reid Hoffman (Co-founder, Executive Chairman) LinkedIn (Partner) Greylock The denial of U.S. visas has forced us to routinely apply for visas in Canada and Ireland … We prefer that talented workers be able to work in our American offices as it would be best for our company, people and the local economy. - Mark Pincus (Founder / CEO) & Colleen McCreary (Chief People Officer) Zynga
  • 87. 87 …VIEWS FROM TECHNOLOGY LEADERS… The tech sector in the U.S. is creating more jobs than it can fill, given the shortage of American computer science graduates. If we don’t take steps as a country to address immigration in the short run and improve education in the long term, then inevitably these jobs will start to leave the United States and move to other countries. - Brad Smith (General Counsel) Microsoft As someone who came to this country as a political refugee, working at a company co-founded by an immigrant, I know first-hand how much the idea of America means to the world. The most talented people on the planet dream of coming here. Our laws, markets and educational system give us a unique and sustainable competitive advantage relative to other countries. But we will only realize this advantage if we make it possible for people to stay, build great businesses, and contribute to our economy. Immigration reform is essential to our future success, not just at Google, but as a nation. - Laszlo Bock (SVP People Operations) Google
  • 88. 88 …VIEWS FROM TECHNOLOGY LEADERS… Our current immigration system is ridiculous - it's disrespectful or even abusive to amazing immigrants who increasingly have other choices. These people are vital to our ability to create competitive businesses - which lead to jobs and prosperity - and we should be fighting to get them here instead of making them confront a bureaucratic and arbitrary system that might or might not let them in. And we should be giving them incentives to stay, instead of making them worry as they build their lives here that they might be kicked out. - Joe Lonsdale (Partner) Formation 8, (Co-Founder) Palantir Technologies We need great engineers in order to build great companies. The current immigration system not only prevents great engineers from working at companies that need them, but also limits their ability to be entrepreneurs. In order to remain competitive in the global war for talent, we need a policy that enables the U.S. to both be competitive and win. - Mike Abbott (General Partner) Kleiner Perkins (Former VP, Engineering) Twitter
  • 89. 89 …VIEWS FROM TECHNOLOGY LEADERS I would argue why not raise the cap to 500,000? Why not 1 million? As long as they are truly skilled, and there is real demand for their services by U.S. companies, why limit at all? Why not let the market decide how many are needed? If the premise is that STEM jobs create more jobs, which there is plenty of evidence for, then in my mind, the more the better. And there is no reason to "protect" U.S. employees because they will benefit from the additional job openings thanks to the growth which will result from the great talent we will attract … We see it every day in our companies - if they are able to get great talent, they are more likely to succeed, grow and create more jobs directly and indirectly. - Oren Zeev (Founding Partner) Orens Capital
  • 90. 90 A FIX MAY BE IN THE WORKS… NEXT STEPS = SENATE FLOOR DEBATE IN JUNE + HOUSE DISCUSSION AND PROCESS (MAY BE MULTIPLE INDIVIDUAL BILLS IN COMING MONTHS) WITH PUSH TOWARDS CONFERENCE
  • 91. 91 A LOOK AT KEY PROVISIONS IN THE IMMIGRATION BILL BEFORE THE SENATE • Exempt Ph.D.’s and STEM degree holders from U.S. universities from annual Green Card cap; also would exempt all family members of foreign workers. • Boost H-1B base to 115,000 initially, with higher levels in years in which demand exceeds supply; current exemption for master’s degree holders increases to 25,000 from 20,000. • Makes it easier for H-1B holders to change jobs while keeping visa status. • Sets rules to make sure H-1B holders aren’t displacing U.S. workers; requires U.S. employers to recruit U.S. workers. • Creates fee for each H-1B petition to be paid by employers; proceeds to fund STEM education and training.
  • 93. 93 GROWTH IN PEOPLE + JOBS + GDP + PRODUCTIVITY + EDUCATION + CONFIDENCE = KEY TO USA’S SUCCESS
  • 94. 94 [Immigration], I believe, is one of the most important sources of America's greatness. We lead the world because, unique among nations, we draw our people - our strength - from every country and every corner of the world. And by doing so we continuously renew and enrich our nation… Thanks to each wave of new arrivals to this land of opportunity, we're a nation forever young, forever bursting with energy and new ideas, and always on the cutting edge, always leading the world to the next frontier. This quality is vital to our future as a nation. If we ever closed the door to new Americans, our leadership in the world would soon be lost. PRESIDENT RONALD REAGAN, 1989 “ ”
  • 95. 95 WHAT YOU CAN DO • With momentum for change building in Congress, we have a window of opportunity to enact true reforms that will grow the U.S. economy and create U.S. jobs. • You can help keep the focus on Congress to drive change. Make sure your voice is heard.
  • 96. 96 ACKNOWLEDGEMENTS • A lot of people helped pull this document together and helped modify along the way. • We thank the engineers and tech industry leaders – H1-B + green card holders + first generation Americans + American natives – that inspired us to push forward to compile the thoughts. • Special thanks to Eric Savitz, Alix Burns, Mike Abbott, Juliet DeBaubigny, Fred Miller, Itamar Rosen, Greg Dingle, Jackson Gorham and John Maier. • Design by
  • 97. 97 This report has been compiled for informational purposes only and should not to be construed as a solicitation or an offer to buy or sell securities in any entity. Contributors to the report cannot guarantee the accuracy or completeness of any of the data (compiled from public sources believed to be reliable) and make no warranties (express, implied or statutory) as to the information in it. The information presented in this report does not necessarily reflect the views of Kleiner Perkins Caufield & Byers (KPCB) or any of its associated management personnel, investment vehicles, investors, portfolio companies or any affiliates or associates of the foregoing. Subject to the Terms and Conditions of Use http://kpcb.com/terms_of_use applicable to this Site, KPCB grants users of the Site a limited license to download this report and to use, reproduce and distribute the report, solely for non-commercial purposes. DISCLOSURE