Tuesday, June 12, 2012

Economist: Where Creators are Welcome

From the Economist: Where Creators are Welcome

Globalization has given nations access to a truly global talent pool. Attracting and
retaining this “brain-trust” can help give a country that extra competitive edge over
its neighbors and global competitors. What’s troublesome about the Economist’s
article, “Where Creators are Welcome”, is the depiction of a complicated, frustratingly
slow, unpredictable and outdated visa process that scares off potential creators from
setting up shop in the US, while other nations pursue policies that are more welcoming to
foreign entrepreneurs.

In the US, no specific visa is offered to foreigners who wish to create new companies.
Although visas are given to investors, the requirements are tough to meet, with an initial
investment of $1million being the norm. It is no surprise then that the annual quota
of 10k visas is rarely met, a squandered opportunity to attract the creators who can
invigorate a struggling economy with vitality, fresh ideas, innovations, and new jobs.

By comparison, other nations have been more welcoming to foreign creators:
-Singapore offers visas to people who invest $40k, and for some, the government
provides additional investment
-Britain gives visas to entrepreneurs who meet certain conditions and attract $77k
of venture funding
-New Zealand offers residency to entrepreneurs whose firms offer benefit to the
-Chile gives selected start-ups $40k without taking any equity in return
-Australia and Canada offer a points system that emphasized youth and skills.
Since 2007, Australia has expanded the number of visas for skilled workers from
103k to 126k per year

If the US is unable to keep pace with countries attracting creators, they will fall behind
in the global race for talent. The article cites the example of Mohamed Alborno, an
Egyptian entrepreneur who incorporated his company, Crowdsway, in Delaware. Because
obtaining a visa in the US was so slow, confusing and unpredictable, he took his business
to Canada where it has since succeeded. As a comparison, the share of permanent visas
granted for economic reasons in Canada rose from 18% to 67%, while those in the US
fell from 18% to 13% in the period between 1991 and 2011.

The reading “Capitalizing on Capabilities” outlines a series of organizational
capabilities described as an organization’s intangible assets. “Talent” is among the 11
listed capabilities that well managed companies tend to have, in which a successful
organization is described as being able to attract, motivate and retain a talented
workforce. In creating barriers for foreign entrepreneurs to come to the US, current
visa policies essentially are narrowing the talent pool available to American businesses,
while other nations get a step ahead of the game with more attractive policies to foreign
creators. As in the McKinsey article “Do you have the right leaders for your growth
strategies”, great leaders are hard to find but vitally important to an organization’s
success, with a meager 1 percent of executives in their sample achieving a competency
score of 6 or 7 out of 7. In complicating the visa process, the US creates yet another
obstacle for businesses to overcome in the elusive search for the competent executives
that can ensure an organization’s success.

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