Contention 1 Entrepreneurship No economic recovery—no good jobs Herbert 10 [Bob Herbert, ―A Recovery‘s Long Odds‖, The New York Times, 9-13-2010, http://www.nytimes.com/2010/09/14/opinion/14herbert.html] We can keep wishing and hoping for a powerful economic recovery to pull the U.S. out of its doldrums, but I wouldn‘t count on it. Ordinary American families no longer have the purchasing power to build a strong recovery and keep it going. Americans are not being honest with themselves about the structural changes in the economy that have bestowed fabulous wealth on a tiny sliver at the top, while undermining the living standards of the middle class and absolutely crushing the poor. Neither the Democrats nor the Republicans have a viable strategy for reversing this dreadful state of affairs. (There is no evidence the G.O.P. even wants to.) Robert Reich, in his new book, ―Aftershock,‖ gives us one of the clearest explanations to date of what has happened — how the United States went from what he calls ―the Great Prosperity‖ of 1947 to 1975 to the Great Recession that has hobbled the U.S. economy and darkened the future of younger Americans. He gives the Obama administration and the Federal Reserve credit for moving quickly in terms of fiscal and monetary policies to prevent the economic crash of 2008 from driving the U.S. into a second great depression. ―But,‖ he writes, ―we did not learn the larger lesson of the 1930s: that when the distribution of income gets too far out of whack, the economy needs to be reorganized so the broad middle class has enough buying power to rejuvenate the economy over the longer term.‖ The middle class is finally on its knees. Jobs are scarce and good jobs even scarcer. Government and corporate policies have been whacking working Americans every which way for the past three or four decades. While globalization and technological wizardry were wreaking employment havoc, the movers and shakers in government and in the board rooms of the great corporations were embracing privatization and deregulation with the fervor of fanatics. The safety net was shredded, unions were brutally attacked and demonized, employment training and jobs programs were eliminated, higher education costs skyrocketed, and the nation‘s infrastructure, a key to long-term industrial and economic health, deteriorated. It‘s a wonder matters aren‘t worse. Any growth is unsustainable Kruger and Hays 10 [Daniel Kruger and Kathleen Hays, ―U.S. Economy‘s Downturn ‗Escape Velocity‖ Growing, Pimco‘s Crescenzi Says‖, Bloomberg, 9-14-2010] A gain in retail sales for a second month shows the economy is beginning to accelerate, according to Tony Crescenzi, a portfolio manager and strategist at Pacific Investment Management Co. in Newport Beach, California. ―The economy does have some degree of escape velocity in that the movement beyond fiscal stimulus and inventory investment requires consumers to go out and spend,‖ Crescenzi said in an interview on Bloomberg Radio‘s ―The Hays Advantage‖ with Kathleen Hays. Sales at U.S. retailers climbed 0.4 percent in August after rising 0.3 percent in the previous month, the Commerce Department reported today. Bigger back-to-school discounts, an increase in the number of states offering tax- free holidays and the restoration of extended jobless benefits may have helped boost demand. The economy still needs increases in job growth before economic growth can reach a self-sustaining ―virtuous cycle,‖ said Crescenzi, whose firm operates the world‘s biggest bond fund. ―It‘s important that this degree of escape velocity has occurred, but you could say the ship is not far enough in orbit to believe it will stay in orbit.‖ The economy has added an average of 90,000 jobs each month since the start of the year after posting gains in payrolls in November for the first time since December 2007. ‗Still Undershooting‘ ―We‘re still undershooting the job growth that‘s necessary to maintain this escape velocity,‖ Crescenzi said. No resiliency Evans-Pritchard 10 [Ambrose Evans-Pritchard, ―No defence left against double-dip recession, says Nouriel Roubini‖, Telegraph UK, 9-5- 2010] ―The US has run out of bullets,‖ said Nouriel Roubini, professor at New York University, and one of a caste of luminaries with grim forecasts at the annual Ambrosetti conference on Lake Como. ―More quantitative easing (bond purchases) by the Federal Reserve is not going to make any difference. Treasury yields are already down to 2.5pc yet credit spreads are widening again. Monetary policy can boost liquidity but it can‘t deal with solvency problems,‖ he told Europe‘s policy elite. Dr Roubini said the US growth rate was likely to fall below 1pc in the second half of the year, despite the biggest stimulus in history: a cut in interest rates from 5pc to zero, a budget deficit of 10pc of GDP, and $3 trillion to shore up the financial system. The anaemic pace compares with rates of 4pc-6pc at this stage of recovery in normal post-war recoveries. ―We have reached stall speed. Any shock at this point can tip you back into recession. With interbank spreads rising, you can get a vicious circle like 2008-2009,‖ he said, describing a self-feeding process as the real economy and the credit system hurt each other. ―There is a 40pc chance of double-dip recession in the US, and worse in Japan. Even if it is not technically a recession it will feel like it,‖ he added. Hans-Werner Sinn, head of Germany‘s IFO Institute, said the US would have to purge its debt excesses the hard way. ―The bitter truth is that there is no way out of this with monetary and fiscal policy. They will just have to see their living standards go down. I see a decade of difficulties for the US,‖ he said. Entrepreneurs key to avoid recession Kaufmann Foundation for Entrepreneurship 10 [―2010 State of Entrepreneurship Address‖, January 19 2010, http://www.kauffman.org/uploadedfiles/state_of_entrepreneurship_2010.pdf] In a new poll we just completed, entrepreneurs paint a pretty grim picture. One-third of entrepreneurs tell us they have had to reduce their head counts in the past year, and close to two-thirds have seen their sales volume decrease. Two-thirds have seen their profitability decline as well. Additionally, and this is very worrisome, over 70 percent of entrepreneurs say that they don‘t expect to add additional employees this year. Worse, with this continuing unemployment, consumers are understandably nervous about spending. In such an environment, it won‘t just be more government spending that will get consumers to open their wallets—responsibly, I might add, we don‘t want consumers overdoing it, as too many were pre- crisis by using their houses as ATMs. But this responsible spending, both here and abroad, won‘t happen until consumers are once again excited to spend—not on the things that were around before the housing bubble popped, but on novel products and services. Once these are developed and widely commercialized, a virtuous cycle can begin. As consumers spend more, businesses have reason to invest and hire. And the more hiring that occurs, the higher incomes and spending will be. And then we will have the recovery we all want and are waiting for. But to get this virtuous ball rolling we need— guess who—entrepreneurs, who are responsible for most of the breakthrough products that have changed our lives for the better. We need entrepreneurs for today‘s breakthroughs in energy generation—only they will develop and commercialize the successor to petroleum. We need breakthroughs in health and medicine—and only entrepreneurs will bend the cost curve and continue to extend life expectancy. Entrepreneurs also will continue to provide services we need and want, such as Rosetta Stone, Zappos, and Mint.com. We could wait for history to repeat itself, to generate the future Fortune 500, as entrepreneurs have done in previous downturns. But with another 85,000 jobs lost last month, I, for one, would be much more comfortable if we had some policies to help history along. Here, then, are some big ideas in that spirit. Immigrant entrepreneurs are key to solve innovation and unemployment Kedrosky and Feld 09 [Paul Kedrosky and Brad Feld, Mr. Kedrosky is a senior fellow at the Kauffman Foundation and an investor. Mr. Feld is a managing director at Foundry Group, a Boulder, Colo.,-based venture capital firm that invests in start-up companies in the U.S. ―Start-up Visas Can Jump-Start the Economy‖, The Wall Street Journal, 12-2-2009, http://online.wsj.com/article/SB10001424052748704402404574525772299940870.html] Immigrant entrepreneurs are an engine of jobs and growth. We need more of them. While fast-growing companies have long been the main source of new jobs and innovation, this country makes it outrageously difficult for immigrants to launch new companies here. This doesn‘t make any sense. After all, Google, Pfizer, Intel, Yahoo, DuPont, eBay and Procter & Gamble are all former start-ups founded by immigrants. Where would this country be today without their world-changing innovations? Immigrants have not only founded big, well-known companies. Foreign-born residents made up just 12.5% of the U.S. population in 2008. But nearly 40% of technology company founders and 52% of founders of companies in Silicon Valley. Yet we don‘t seem to care. We send recent, foreign-born university science and engineering graduates back to their own countries after their student visas expire—unless these creative sorts are willing to spend some of the most entrepreneurial years of their lives working in a big company under an H-1B visa after they finish their studies. For those who studied elsewhere, but who nonetheless want to bring their job-creating ideas here, American policies treat them—the job-creating, trouble-making innovators that they are—as a cross between deadbeats and queue-jumpers. Why can‘t they wait in line like everyone else to get a visa in five years or so? What‘s their hurry? Their hurry is Joseph Schumpeter‘s hurry: They want to hustle out and disrupt markets when the opportunity arises. In the 21st century those opportunities don‘t wait for our interminable, employment-based visa programs. As a result rather than saying "Come and create jobs here" we, in effect, tell them to shove off. Come back when you have a few million in sales— at which point they will be rooted elsewhere and creating jobs somewhere else. That needs to end now. Immigrants who come here to create companies create jobs. We need the jobs. New start ups key to solve unemployment Friedman 10 [Thomas L. Friedman, won the 2002 Pulitzer Prize for commentary, his third Pulitzer for The New York Times. He became the paper's foreign-affairs columnist in 1995. Previously, he served as chief economic correspondent in the Washington bureau and before that he was the chief White House correspondent. In 2005, Mr. Friedman was elected as a member of the Pulitzer Prize Board, ―Start-Ups, Not Bailouts‖, The New York Times, 04-03-2010, http://www.nytimes.com/2010/04/04/opinion/04friedman.html] Message: If we want to bring down unemployment in a sustainable way, neither rescuing General Motors nor funding more road construction will do it. We need to create a big bushel of new companies — fast. We‘ve got to get more Americans working again for their own dignity — and to generate the rising incomes and wealth we need to pay for existing entitlements, as well as all the new investments we‘ll need to make. It was just reported that Social Security this year will pay out more in benefits than it receives in payroll taxes — a red line we were not expected to cross until at least 2016. But you cannot say this often enough: Good-paying jobs don‘t come from bailouts. They come from start-ups. And where do start-ups come from? They come from smart, creative, inspired risk-takers. How do we get more of those? There are only two ways: grow more by improving our schools or import more by recruiting talented immigrants. Surely, we need to do both, and we need to start by breaking the deadlock in Congress over immigration, so we can develop a much more strategic approach to attracting more of the world‘s creative risk-takers. ―Roughly 25 percent of successful high-tech start-ups over the last decade were founded or co-founded by immigrants,‖ said Litan. Think Sergey Brin, the Russian- born co-founder of Google, or Vinod Khosla, the India-born co-founder of Sun Microsystems. That is no surprise. After all, Craig Mundie, the chief research and strategy officer of Microsoft, asks: What made America this incredible engine of prosperity? It was immigration, plus free markets. Because we were so open to immigration — and immigrants are by definition high-aspiring risk-takers, ready to leave their native lands in search of greater opportunities — ―we as a country accumulated a disproportionate share of the world‘s high-I.Q. risk-takers.‖ Talent influx means we solve DeAngelis 10 (Enterprise Resilience Management Blog Insights about a new Enterprise Architecture for corporations, governmental agencies, transnational organizations, and nation-states in the age of globalization. Stephen F. DeAngelis, Principal Author. Bradd C. Hayes, Editor. Entrepreneurs, Innovators, and Immigrants January 27, 2010 in Best Practices, Current Affairs, Globalization, Innovation | Permalink) Back in September of last year, Bill George, a professor of management practice at Harvard Business School and author of the new book, 7 Lessons for Leading in Crisis, wrote an article for BusinessWeek in which he discussed his ideas for creating sustainable jobs ["Putting America Back to Work," 28 September 2009 print issue]. Among other things, George wrote: "Instead of clinging to yesterday's economy, we should use this opportunity to rally around the cause of making the U.S. fully competitive. But what will it take to create sustainable jobs? We need to refocus on America's great strengths: innovation, entrepreneurship, small business, and new company formation. These were the engines that drove job growth in the 1980s and '90s. We can do it again by unleashing these powerful forces. The biggest job creators are small businesses and companies that are expanding, like my former company, Medtronic, which has created 35,000 jobs in the past 25 years. Yet our national policies, unlike those in many European and Asian nations, often work against them." As George mentions, he is the former chair and CEO of Medtronic. Currently he serves on the boards of ExxonMobil and Goldman Sachs and, previously, he has served on the boards of Novartis and Target. His business credentials, in other words, go beyond the classroom. Later in his article, he recommended that the U.S. invest heavily in "renewable energy, information technology, and health care—three of America's greatest strengths." He also recommended that the country renew its investments in human capital. He wrote: "With so many workers who lack the skills for tomorrow's jobs, we should institute massive retraining and education programs to prepare workers for the high-tech jobs where the U.S. has a competitive advantage." I don't disagree with anything George writes. I, too, believe that "innovation, entrepreneurship, small business, and new company formation" are needed to create more good paying, sustainable jobs. Although we need to do everything we can to keep American's fully employed, one thing that George doesn't mention is how "new blood" might be able to help us do that. Hiring immigrants may not sound like a good way to create sustainable jobs in the U.S., but don't be too quick to judge. Before discussing the possible benefits of hiring immigrants, let's face the fact that doing so could be controversial. A December article in BusinessWeek notes that U.S. businesses are still looking for good foreign talent despite the fact that "continued hiring of workers from abroad may stoke controversy" ["Still Wanted: Foreign Talent—and Visas," by Moira Herbst, 21 December 2009 print issue]. She reports: "Even as job losses in the U.S. mount, employers have stepped up the hiring of skilled workers from abroad, according to data from the U.S. Citizenship & Immigration Services. The acceleration in recent weeks has put companies close to exhausting the 65,000 visas allotted each year for foreign hires under what's known as the H-1B program. Some 61,500 visas had been used as of Dec. 8, and the last visas are likely to be claimed within weeks. Once that happens, companies won't be able to use the program to bring in additional workers until October, the start of the government's fiscal year." Herbst quotes an associate professor of public policy at Rochester Institute of Technology, Ron Hira, who probably reflects the thinking of many Americas. "With 15.4 million people unemployed in the U.S.," he states, "employers should be able to find qualified workers here." The fact, however, is that hiring immigrants often reflects their entrepreneurial character, not just their job qualifications. The Wall Street Journal asserts that "it's crazy to drive away talented young scholars" ["Immigrant Scientists Create Jobs and Win Nobels," by Susan Hockfield, 20 October 2009]. She writes: "Of the nine people who shared this year's Nobel Prizes in chemistry, physics and medicine, eight are American citizens, a testament to this country's support for pioneering research. But those numbers disguise a more important story. Four of the American winners were born outside of the United States and only came here as graduate or post-doctoral students or as scientists. They came because our system of higher education and advanced research has been a magnet for creative talent. Unfortunately, we cannot count on that magnetism to last. Culturally, we remain a very open society. But that openness stands in sharp contrast to arcane U.S. immigration policies that discourage young scholars from settling in the U.S. Those policies come at a high price. Graduate and postgraduate student immigrants are essential to creating new, well-paid jobs in our economy. Of the 35 young innovators recognized this year by Technology Review magazine for their exceptional new ideas, only six went to high school in the United States. From MIT alone, foreign graduates have founded an estimated 2,340 active U.S. companies that employ over 100,000 people. Amazingly, if as incoming students they had told U.S. immigration authorities that they hoped to stay on as entrepreneurs after graduation, they would have been turned back at the border. Our immigration laws specifically require that students return to their home countries after earning their degrees and then apply for a visa if they want to return and work in the U.S. It would be hard to invent a policy more counterproductive to our national interest." At a time when the U.S. is continuing to shed jobs, welcoming people with the skills and disposition to create hundreds of thousands of jobs simply makes sense. Dr. Hockfield is not a reporter; she is president of the Massachusetts Institute of Technology and a noted neuroscientist whose research has focused on the development of the brain. She certainly advocates, along with Professor George, aggressively developing "more homegrown talent"; but, she notes (with more than a little frustration) that the U.S. has lost its lead in education. "In education, the world is accelerating while we are standing still," she writes. This post, however, is about jobs, not education. Dr. Hockfield concludes by noting that the two subjects are intricately interwoven. "Today, discovery and innovation increasingly spring from a creative network of the finest talent everywhere across the globe. From new advances in medicine to scientific breakthroughs that spawn new industries and sustainable jobs, the work of science and engineering is being done by individuals who can live almost anywhere. To be part of that global creative network we must inspire more young Americans to pursue scientific careers, and we must rapidly reform U.S. immigration policies that drive away talented young scholars who would otherwise decide to live, work and innovate here. We should be proud of our Nobel Prize winners. But we should also craft policies that make it more likely that future Nobel laureates will do their work inside the U.S." In later Wall Street Journal article, the paper argues that "immigrant entrepreneurs are an engine of jobs and growth. We need more of them." ["Start-up Visas Can Jump-Start the Economy," by Paul Kedrosky and Brad Feld, 2 December 2009] Kedrosky and Feld write: "While fast-growing companies have long been the main source of new jobs and innovation, this country makes it outrageously difficult for immigrants to launch new companies here. This doesn't make any sense. After all, Google, Pfizer, Intel, Yahoo, DuPont, eBay and Procter & Gamble are all former start-ups founded by immigrants. Where would this country be today without their world-changing innovations? Immigrants have not only founded big, well-known companies. Foreign-born residents made up just 12.5% of the U.S. population in 2008. But nearly 40% of technology company founders and 52% of founders of companies in Silicon Valley. Yet we don't seem to care." Like Dr. Hockfield, Kedrosky and Feld are not reporters either; they are investors. Mr. Kedrosky is a senior fellow at the Kauffman Foundation and an investor. Mr. Feld is a managing director at Foundry Group, a Boulder, Colo.,-based venture capital firm that invests in start- up companies in the U.S. Analysts have predicted that the U.S. recovery will be jobless; that is, that unemployment will remain high for several years. Kedrosky and Feld argue that it doesn't need to be that way. They continue: "In the 21st century those opportunities don't wait for our interminable, employment-based visa programs. As a result rather than saying 'Come and create jobs here' we, in effect, tell them to shove off. Come back when you have a few million in sales— at which point they will be rooted elsewhere and creating jobs somewhere else. That needs to end now. Immigrants who come here to create companies create jobs. We need the jobs." Rather than relying on H-1B visas, Kedrosky and Feld recommend creating a new type of visa they call a "start-up visa." They explain: "It might work like this: If immigrant entrepreneurs want to start a company in the U.S. and are able to raise a moderate amount of money (perhaps as little as $125,000) from an accredited U.S.- based venture capital firm or qualified U.S.-based angel investors, we should let them start a company here. It could be a couple of founders with an idea—that's it. We would give visas to the founders and welcome them in to our country. Would it work every time? Of course not. It would fail more often than not. Start-ups often fail. But having failed, the immigrant entrepreneurs could try again, and again. And as long as they are trying, raising money, creating jobs, and making sales, we would let them stay here. Founders of new companies are precious for a vibrant economy, and we should welcome them. Indeed, the country would be better served to find more of them. Some will say a start-up visa program will be abused. They will say that it will become a way to end-run immigration rules, to jump the queue if you have money. There are at least two answers to these objections. First, to get such a visa you would have to raise money from real investors. Second, Canada and other countries already allow entrepreneurs to start a company in their country. Shouldn't the U.S. stop worrying so much about keeping these people out, and start worrying about bringing them in?" They agree with Dr. Hockfield that we should welcome foreign scholars and that "science and engineering graduates should get visas stapled to their diplomas" because they are the individuals who are going to "create jobs, innovate, and grow the economy." The message, they write, should be: "Uncle Sam wants you, if you're a prospective entrepreneur." In a recent op-ed piece, former Tennessee congressman Harold Ford, Jr., while chiding Democrats for losing the public's confidence, agreed that immigrants can play a critical role in our economy ["Democrats, Get Down to Business," New York Times, 25 January 2010]. He writes that America "should reform [its] immigration policy to ensure that those who contribute to [the U.S.] economy, especially foreign math and science graduates of American universities, have a clear path to citizenship." While Kedrosky and Feld want to welcome foreigners who seek investment money in the United States, there is already a program that offers visas to foreigners willing to invest in U.S. companies ["Immigrants invest in U.S. businesses in exchange for visas," by N.C. Aizenman, Washington Post, 10 January 2010]. Aizenman writes: "The number of foreigners willing to invest $500,000 to $1 million in a U.S. business in exchange for a visa roughly tripled in the past fiscal year, as dozens of cash-strapped enterprises and local governments scrambled to attract wealthy foreign backers through a previously obscure provision of immigration law. Under the EB-5 visa program, immigrants who can demonstrate that their investment created or preserved at least 10 U.S. jobs after two years are granted legal permanent residency along with their spouses and children. Although immigrants are allowed to establish businesses under the program, most prefer to invest in 'regional centers' -- public or private enterprises that are certified by the government to receive funds from EB-5 investors and that can count jobs indirectly created by the investment toward the 10 required. The minimum outlay mandated is $1 million, but immigrants can reduce that to $500,000 by investing in a regional center or establishing businesses in areas designated as economically disadvantaged." At a time when small businesses are still having difficulty raising capital, hooking up with a foreign investor seems like a good idea. These are obviously not economically disadvantaged individuals who are going to be a drain on scarce government resources. They are people who can help create jobs for people who will pay taxes and bolster local economies. Are there downsides to the program? Aizenman admits that even "some avid proponents of the EB-5 program ... worry that a profusion of fraudulent or ill-advised ventures might soon flourish alongside legitimate ones." On the whole, however, the benefits seem to outweigh the risks. Another point made by Aizenman is that we are not talking about big numbers. He reports: "Stephen Yale-Loehr, a professor at Cornell University's law school and executive director of a trade association of regional centers, said the number of EB-5 visas being granted falls well short of the maximum 10,000 allowed each year." In a surprising twist for Congress, where it has been said that the aisles are getting wider and politicians arms are getting shorter, the EB-5 program has attracted cross-aisle, bipartisan support. The reason: the politicians realize that the program creates jobs. I suspect that there are a lot of unemployed workers who would gladly have an immigrant employer if he or she could promise a steady paycheck and livable wage. Plan spurs high-tech innovation and economic productivity Hart et al 09 (High-tech Immigrant Entrepreneurship in the United States by David M. Hart, Zoltan J. Acs, and Spencer L. Tracy, Jr. Corporate Research Board, LLC, July 2009 This report was developed under a contract with the Small Business Administration, Office of Advocacy, and contains information and analysis that was reviewed and edited by officials of the Office of Advocacy. However, the final conclusions of the report do not necessarily reflect the views of the Office of Advocacy.) High-Tech Immigrant Entrepreneurship in the United States Executive Summary In this study, we quantify the role of immigrants in high-tech entrepreneurship in the United States. We report the results of a survey of a nationally representative sample of rapidly growing high-impact, high-tech companies.1 This group of companies is very important to the U.S. economy, because they account for a disproportionate share of job creation and economic growth. We find that about 16% of the companies in our sample had at least one foreign-born person among their founding teams. This estimate is lower than that found in most previous studies of high-tech immigrant entrepreneurship. Nonetheless, our data show that immigrants play a crucial role in this vital economic activity. High-impact, high-tech companies founded by immigrant entrepreneurs and those founded by native-born entrepreneurs in our sample are similar in many ways. They operate in the same industries and are about the same size. One important difference between the two is their location. Immigrant-founded companies tend to be located in states that have large immigrant populations. Another difference is that immigrant-founded companies in our sample are about twice as likely as native-founded companies to state that they have a strategic relationship with a foreign firm, such as a major supplier, key partner, or major customer. Immigrant-founded companies may also have a higher level of technological performance than native-founded companies, although the evidence on this issue is not conclusive. This study sheds light on high- tech immigrant entrepreneurs as individuals as well as on the companies that they helped to found. The vast majority of these individuals are strongly rooted in the United States. A large proportion of them have lived in this country for two decades or more. More than three-quarters of them are U.S. citizens. Two-thirds of them received undergraduate or graduate degrees here. The 250 foreign-born entrepreneurs on whom we have data hail from 54 countries in all regions of the world. India is the largest source country, accounting for 16% of this group, followed by the U.K. at 10%. Policymakers are rightly concerned that government should sustain a healthy climate for starting and running high-impact, high-tech companies like those in our sample. Immigration policy, as it affects highly educated and highly experienced foreign-born individuals who might be drawn into high-tech entrepreneurship, is an important element of that climate. 6 High-Tech Immigrant Entrepreneurship in the United States 1.0 Introduction A vigorous high-technology sector is vital to sustain U.S. prosperity in the 21st century. The new products, services, and business models that the high-tech sector generates differentiate this nation‘s output from that of the rest of the world and enable capital accumulation, wage gains, and productivity growth. A high level of entrepreneurship, by which we mean the founding of new businesses, makes the high-tech sector vigorous. High-tech entrepreneurs, by which we mean the founders of new high-tech businesses, take risks that managers of existing high- tech businesses choose not to take and recognize opportunities that they fail to spot. High-tech entrepreneurship requires a rare combination of inclinations, capabilities, and resources. Half of new businesses fail within five years (Shane 2008), so founders must be optimistic, but also capable of weathering severe challenges. Because the opportunities in high-tech sectors blend together technological and market factors, individual entrepreneurs and founding teams in these sectors typically combine technical expertise rooted in formal education with market savvy that flows from extensive business experience. They must also be able to tap quickly and effectively into networks of customers, suppliers, expertise, finance, and talent as business opportunities ripen. Foreign- born individuals play an important role in U.S. high-tech entrepreneurship. By virtue of having left their native land, they may have entrepreneurial inclinations. Their large presence in American higher education and the U.S. labor force, especially science and engineering disciplines and occupations, equips them with valuable knowledge that bears on high- tech innovation. Their outsider status may allow them, in some cases, to recognize ―out-of-the box‖ opportunities that native-born individuals with similar knowledge and skills do not perceive. These capabilities may be linked to unique entrepreneurial resources, such as access to partners, customers, and suppliers in their countries of origin. In this study, we quantify the role of immigrants2 in high-tech entrepreneurship in a nationally representative sample of rapidly growing ―high-impact‖ companies (HICs). This class of companies drives job creation and aggregate growth in the United States. We find that, while most previous studies have overstated the role of immigrants in high-tech entrepreneurship, it is nonetheless very important. For instance, about 16% of the companies in our sample had at least one foreign-born entrepreneur among their founding teams, and these high-tech companies display better performance in some respects than high-tech companies in our sample whose founders were all native-born. We also provide a profile of high-tech immigrant entrepreneurs. The vast majority are strongly rooted in the United States. Most of them received their highest educational degree here and have become citizens. 8 Our report begins by situating the subject of high-tech immigrant entrepreneurship in policy and analytical debates about immigration, entrepreneurship, and technology-based economic development. We then describe our methods and findings. We conclude by highlighting the research and policy agendas that our work illuminates. 2.0 Policy Context Our research brings together two important areas of public policy: technology-based economic development (TBED) and immigration. In both areas, recent research points to new ways to achieve desirable policy outcomes. The linkages between them are just beginning to be explored. 2.1 Technological Innovation, Entrepreneurship, and Economic Growth The importance of technological innovation in economic growth is by now firmly established. Well-understood by classical economists, technology‘s contribution to the economy began to be conceptualized and measured after World War II by modern economists such as Solow (1957), Griliches (1958), Nelson (1959), and Arrow (1962). Applied economists in fields like industrial organization (Scherer 1984) and agricultural economics (Ruttan 2001) sustained this agenda, and they have been joined in recent years by formal theorists such as Romer (1990) and Lucas (1988). As McCraw (2007) has written, the twenty-first century is shaping up to be ―Schumpeter‘s Century,‖ a tribute to Joseph A. Schumpeter (1942), the towering figure whose work on technological innovation, entrepreneurship, and economic growth in the first half of the twentieth century set the stage for the advances of the post-World War II period. 9 Early studies of technology and economic growth in the post-World War II period centered on the contributions of formal R&D. Economic dynamism in these decades was perceived to flow from the investments made by large organizations with big R&D budgets, including public agencies, like the Department of Defense and the National Aeronautics and Space Administration, and multinational companies, such as IBM and General Electric. In his 1952 book American Capitalism, John Kenneth Galbraith described the large company as an ―an almost perfect instrument‖ of technological development. Galbraith argued that oligopoly provided a sufficient level of competition to stimulate innovation, while also assuring an adequate resource flow to fund large-scale R&D operations and sufficient confidence that the benefits of these investments would be reaped by firms that built such operations. This conventional wisdom was not entirely accurate. Beneath the giant redwoods of the Fortune 500, the industrial landscape of the United States contained a thriving undergrowth of smaller and newer companies in the 1950s and 1960s, including some seedlings that would grow into giants themselves, toppling their elders as they did so (Acs and Audretsch 1990). The post-World War II period heralded not only the expansion of large U.S.-based multinational companies but also the invention of whole new institutional forms, such as the venture capital firm and the high-tech start-up, which would eventually blossom into a unique entrepreneurial ecology in places like California‘s Silicon Valley and Boston‘s Route 128 (Kenney 2000, Hsu and Kenney 2005). Indeed, the environment in the United States for high-growth, high-tech start-up companies grew more hospitable over time, culminating in the entrepreneurial frenzy of the dot- com boom at the end of the twentieth century. 10 Recent research suggests that high-growth entrepreneurship is linked to a variety of important economic outcomes. Acs and Audretsch and their collaborators have shown in several studies that business start-ups are associated with economic growth at the regional and national levels. For instance, Acs and Mueller (2008) demonstrate that sustained economic benefits from entrepreneurship at the regional level derive mainly from young (two to five years old), medium-sized (20 to 499 employees) enterprises and not from small businesses in general or the establishment of branch plants of large firms. Haltiwanger (2009) provides evidence that companies that are less than five years old account for nearly all net job creation in the United States. Autio (2005) summarizes a variety of studies (including Wong, Ho, and Autio 2005) showing that 1-10% of new firms generate 40-75% of new jobs. Henrekson and Johansson (2008, 14) summarize the ―clear-cut result‖ in empirical literature covering several countries, including the United States: ―a few rapidly growing companies generate a disproportionately large share of all new net jobs…‖ In addition, as Scherer (1992) points out, competition from new entrants, even if they fail, forces their older rivals to adapt or die and thus drives productivity growth across the broader economy. Although young, high-growth companies are present in a wide variety of industries, the dynamics of those in high-technology sectors are especially important for scholars and policymakers to understand. These companies are more likely than others to be pursuing opportunities associated with radical innovations that produce positive knowledge externalities and that may have transformative consequences for society (Baumol, Litan, and Schramm 2007). Because such opportunities are so challenging and so risky, existing 11 businesses are particularly unlikely to find out about them or to pursue them (Utterback 1994, Christensen and Rosenbloom 1995). High-technology start-ups are one of the main organizational vehicles by which new knowledge in the science and engineering disciplines is converted into economic benefits (Acs, et al. 2005, Acs, Audretsch, and Strom 2009). Plan is low risk, big reward. Graham 09 [Paul Graham, essayist, programmer, and programming language designer. In 1995 he developed with Robert Morris the first web-based application, Viaweb, which was acquired by Yahoo in 1998. In 2002 he described a simple statistical spam filter that inspired a new generation of filters. He's currently working on a new programming language called Arc, a new book on startups, and is one of the partners in Y Combinator, ―The Founder Visa‖, April 2009, http://www.paulgraham.com/foundervisa.html] I usually avoid politics, but since we now seem to have an administration that's open to suggestions, I'm going to risk making one. The single biggest thing the government could do to increase the number of startups in this country is a policy that would cost nothing: establish a new class of visa for startup founders. The biggest constraint on the number of new startups that get created in the US is not tax policy or employment law or even Sarbanes-Oxley. It's that we won't let the people who want to start them into the country. Letting just 10,000 startup founders into the country each year could have a visible effect on the economy. If we assume 4 people per startup, which is probably an overestimate, that's 2500 new companies. Each year. They wouldn't all grow as big as Google, but out of 2500 some would come close. By definition these 10,000 founders wouldn't be taking jobs from Americans: it could be part of the terms of the visa that they couldn't work for existing companies, only new ones they'd founded. In fact they'd cause there to be more jobs for Americans, because the companies they started would hire more employees as they grew. US key to the global economy Caploe 09 (David Caploe is CEO of the Singapore-incorporated American Centre for Applied Liberal Arts and Humanities in Asia., ―Focus still on America to lead global recovery‖, April 7, The Strait Times, lexis) IN THE aftermath of the G-20 summit, most observers seem to have missed perhaps the most crucial statement of the entire event, made by United States President Barack Obama at his pre-conference meeting with British Prime Minister Gordon Brown: 'The world has become accustomed to the US being a voracious consumer market, the engine that drives a lot of economic growth worldwide,' he said. 'If there is going to be renewed growth, it just can't be the US as the engine.' While superficially sensible, this view is deeply problematic. To begin with, it ignores the fact that the global economy has in fact been 'America-centred' for more than 60 years. Countries - China, Japan, Canada, Brazil, Korea, Mexico and so on - either sell to the US or they sell to countries that sell to the US. This system has generally been advantageous for all concerned. America gained certain historically unprecedented benefits, but the system also enabled participating countries - first in Western Europe and Japan, and later, many in the Third World - to achieve undreamt-of prosperity. At the same time, this deep inter-connection between the US and the rest of the world also explains how the collapse of a relatively small sector of the US economy - 'sub-prime' housing, logarithmically exponentialised by Wall Street's ingenious chicanery - has cascaded into the worst global economic crisis since the Great Depression. To put it simply, Mr Obama doesn't seem to understand that there is no other engine for the world economy - and hasn't been for the last six decades. If the US does not drive global economic growth, growth is not going to happen. Thus, US policies to deal with the current crisis are critical not just domestically, but also to the entire world . Consequently, it is a matter of global concern that the Obama administration seems to be following Japan's 'model' from the 1990s: allowing major banks to avoid declaring massive losses openly and transparently, and so perpetuating 'zombie' banks - technically alive but in reality dead. As analysts like Nobel laureates Joseph Stiglitz and Paul Krugman have pointed out, the administration's unwillingness to confront US banks is the main reason why they are continuing their increasingly inexplicable credit freeze, thus ravaging the American and global economies. Economic collapse sparks multiple global nuclear wars Ockham Research 08 (Ockham Research, Economic Distress and Geopolitical Risks by: Ockham Research, Ockham Research Staff November 18, 2008 Ockham Research Ockham Research is an independent research provider based in Atlanta, Georgia providing security analysis) The hardship and turmoil which impacted the world during the Great Depression provided fertile ground for the rise of fascist, expansionist regimes in Germany, Italy and Japan. Hard times also precluded the Western democracies from a more muscular response in the face of growing belligerence from these countries. The United States largely turned inward during the difficult years of the 1930s. The end result was a global war of a size and scale never seen by man either before or since. Economic hardship is distracting. It can cause nations to turn their focus inward with little or no regard for rising global threats that inevitably build in tumultuous times. Authoritarian regimes invariably look for scapegoats to blame for the hardship affecting their populace. This enables them to project the anger of their citizenry away from the regime itself and onto another race, country, ideology, etc. Looking at the world today, one can certainly envision numerous potential flashpoints that could become problematic in a protracted economic downturn. Pakistan, already a hotbed of Islamic extremism and armed with atomic weapons, has been particularly hard hit by the global economic crisis. An increasingly impoverished Pakistan will be harder and harder for its new and shaky democratically-elected government to control. Should Pakistan‘s economic troubles cause its political situation—always chaotic—to spin out of control, this would be a major setback in the global war on terror. Russia, whose economy, stock markets and financial system have literally imploded over the past few months, could become increasingly problematic if faced with a protracted economic downturn. The increasingly authoritarian and aggressive Russian regime is already showing signs of anger projection. Its invasion of Georgia this summer and increasing willingness to confront the West reflect a desire to stoke the pride and anger of its people against foreign powers—particularly the United States. It is no accident that the Russians announced a willingness to deploy tactical missile systems to Kaliningrad the day after Barack Obama‘s election in the U.S. This was a clear ―shot across the bow‖ of the new administration and demonstrates Russian willingness to pursue a much more confrontational foreign policy going forward. Furthermore, the collapse in the price of oil augers poorly for Russia‘s economy. The Russian budget reputedly needs oil at $70 per barrel or higher in order to be in balance. Russian foreign currency reserves, once huge, have been depleted massively over the past few months by ham-fisted attempts to arrest the slide in both markets and the financial system.Bristling with nuclear weapons and nursing an ego still badly bruised by the collapse of the Soviet Union and loss of superpower status, an impoverished and unstable Russia would be a dangerous thing to behold. China too is threatened by the global economic downturn. There is no doubt that China has emerged during the past decade as a major economic power. Parts of the country have been transformed by its meteoric growth. However, in truth, only about a quarter of the nation‘s billion plus inhabitants—those living in the thriving cities on the coast and in Beijing—have truly felt the impact of the economic boom. Many of these people have now seen a brutal bear market and are adjusting to economic loss and diminished future prospects. However, the vast majority of China‘s population did not benefit from the economic boom and could become increasingly restive in an economic slowdown. Enough economic hardship could conceivably threaten the stability of the regime and would more than likely make China more bellicose and unpredictable in its behavior, with dangerous consequences for the U.S. and the world. Terminal impact is nuclear war—historical analysis Mead 09 – Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations (Walter Russell, ―Only Makes You Stronger,‖ The New Republic, 2/4/09, http://www.tnr.com/politics/story.html?id=571cbbb9-2887-4d81-8542-92e83915f5f8&p=2) The damage to China's position is more subtle. The crisis has not--yet--led to the nightmare scenario that China-watchers fear: a recession or slowdown producing the kind of social unrest that could challenge the government. That may still come to pass--the recent economic news from China has been consistently worse than most experts predicted--but, even if the worst case is avoided, the financial crisis has nevertheless had significant effects. For one thing, it has reminded China that its growth remains dependent on the health of the U.S. economy. (continued…) A deceleration in China's long-term growth rate would postpone indefinitely the date when China could emerge as a peer competitor to the United States. The present global distribution of power could be changing slowly, if at all. The greatest danger both to U.S.-China relations and to American power itself is probably not that China will rise too far, too fast; it is that the current crisis might end China's growth miracle. In the worst-case scenario, the turmoil in the international economy will plunge China into a major economic downturn. The Chinese financial system will implode as loans to both state and private enterprises go bad. Millions or even tens of millions of Chinese will be unemployed in a country without an effective social safety net. The collapse of asset bubbles in the stock and property markets will wipe out the savings of a generation of the Chinese middle class. The political consequences could include dangerous unrest--and a bitter climate of anti-foreign feeling that blames others for China's woes. (Think of Weimar Germany, when both Nazi and communist politicians blamed the West for Germany's economic travails.) Worse, instability could lead to a vicious cycle, as nervous investors moved their money out of the country, further slowing growth and, in turn, fomenting ever-greater bitterness. Thanks to a generation of rapid economic growth, China has so far been able to manage the stresses and conflicts of modernization and change; nobody knows what will happen if the growth stops. India's future is also a question. Support for global integration is a fairly recent development in India, and many serious Indians remain skeptical of it. While India's 60-year- old democratic system has resisted many shocks, a deep economic recession in a country where mass poverty and even hunger are still major concerns could undermine political order, long-term growth, and India's attitude toward the United States and global economic integration. The violent Naxalite insurrection plaguing a significant swath of the country could get worse; religious extremism among both Hindus and Muslims could further polarize Indian politics; and India's economic miracle could be nipped in the bud. If current market turmoil seriously damaged the performance and prospects of India and China, the current crisis could join the Great Depression in the list of economic events that changed history, even if the recessions in the West are relatively short and mild. The United States should stand ready to assist Chinese and Indian financial authorities on an emergency basis--and work very hard to help both countries escape or at least weather any economic downturn. It may test the political will of the Obama administration, but the United States must avoid a protectionist response to the economic slowdown. U.S. moves to limit market access for Chinese and Indian producers could poison relations for years. For billions of people in nuclear-armed countries to emerge from this crisis believing either that the United States was indifferent to their well-being or that it had profited from their distress could damage U.S. foreign policy far more severely than any mistake made by George W. Bush. (continued………) This may be happening yet again. None of which means that we can just sit back and enjoy the recession. History may suggest that financial crises actually help capitalist great powers maintain their leads--but it has other, less reassuring messages as well. If financial crises have been a normal part of life during the 300-year rise of the liberal capitalist system under the Anglophone powers, so has war. The wars of the League of Augsburg and the Spanish Succession; the Seven Years War; the American Revolution; the Napoleonic Wars; the two World Wars; the cold war: The list of wars is almost as long as the list of financial crises. Bad economic times can breed wars. Europe was a pretty peaceful place in 1928, but the Depression poisoned German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression, what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet, decline, but, if we can't get the world economy back on track, we may still have to fight. Scenario 2: Economic Leadership Visa restrictions on entrepreneurs are crushing U.S. economic leadership Lindzon et. al 10 [Howard Lindzon in addition to 99 other venture capitalists, Letter to the United States Senate in Support of the Startup Visa, 02-22- 2010, http://startupvisa.files.wordpress.com/2010/02/startup-visa-letter-with-signatures-feb22.pdf] We write to express our support for the Startup Visa. Since the founding of our country, the entrepreneurial spirit has been a defining characteristic of the United States. Today we are the world leader in creating new enterprises, advancing innovation, and creating jobs as a result of this entrepreneurial activity. Fast-growing companies have long been the main source of new jobs and innovation in the United States. However, in recent years our visa laws have made it unnecessarily difficult for immigrants to launch new companies here. We view this as a major competitive disadvantage for our country in the 21st century. Companies such as Google, Pfizer, Intel, Yahoo, DuPont, eBay and Procter & Gamble are all former start-ups founded by immigrants. Yet immigrants have not only founded major, well-known companies. Foreign-born residents made up just 12.5% of the U.S. population in 2008, while nearly 40% of technology company founders and 52% of founders of companies in Silicon Valley are foreign-born. As venture capitalists and angel investors, we often fund companies at their very inception. In cases where there are immigrant founders, it is often impossible for them to get an appropriate visa to stay in the United States and start their company. Even in cases where the founders already have a visa of some sort, they typically can't use this visa to start a company. As a result, they often have to leave our country to start their company, resulting in a loss of innovative entrepreneurs and the correspondingly created jobs in the United States. There are multiple costs to our country and our economy. First, we lose the entrepreneur, who is a critical part of our society. We then lose the jobs that are created by the new venture, which in the success case could easily number in hundreds or thousands over the first decade of the company's life. Finally, we run the risk of losing our reputation as the greatest country in which to start a company. To address this issue, we support the Startup Visa proposal. Early stage companies are often started with funding of at least $250,000. In these situations, if a qualified U.S. venture capital investor or a U.S. "super angel" (an angel investor that has a track record of regularly participating in seed round investments) is willing to commit a significant investment for a foreign entrepreneur to start a company in the United States, we believe the entrepreneur should be able to get a "Startup Visa." We believe these thresholds are appropriate for creating credible startups which, if successful, can lead to numerous U.S. based jobs. Vanilla (http://www.vanillaforums.com) is an example of a type of company this visa would apply to. Vanilla has two founders, both Canadian. They spent the summer in Boulder, Colorado as part of the TechStars accelerator program getting advice, help, and mentorship from over 50 U.S. based entrepreneurs and investors. Numerous investors were interested in funding Vanilla and helping them to grow their company from Boulder; however neither founder was able to give investors comfort that they could get an appropriate visa to stay and work in the US. Since then, the founders have relocated to Montreal, raised $500,000, and started their company in Canada. Today, they are adding three people to their team, all based in Montreal. If successful, they will add many more people to the team over the next few years. Each year thousands of foreign entrepreneurs face the same situation that the Vanilla founders faced. All of these entrepreneurs are starting companies with high growth potential where they could be hiring tens or hundreds of employees over the first few years of their company's existence . When Google first started, it was two founders and an idea - today it is one of the most important companies in the world. This is the type of company the Startup Visa proposal is addressing. The U.S. remains one of the most attractive countries for entrepreneurs. It has a culture of risk taking, capital formation, and an economic dynamism that is the envy of the world. This gives us a competitive edge that we should not let slip through our fingers. Economic leadership key to job growth Ries 10 [Eric Ries, creator of the Lean Startup methodology and the author of the popular entrepreneurship blog Startup Lessons Learned. He previously co-founded and served as Chief Technology Officer of IMVU. In 2007, BusinessWeek named Ries one of the Best Young Entrepreneurs of Tech and in 2009 he was honored with a TechFellow award in the category of Engineering Leadership. He serves on the advisory board of a number of technology startups, and has worked as a consultant to a number of startups, companies, and venture capital firms, ―The New Startup Arms Race‖, Huffington Post, 03-21-2010, http://www.huffingtonpost.com/eric-ries/the-new-startup-arms-race_b_507510.html] There is no greater country on Earth for entrepreneurship than America. In every category, from the high-tech world of Silicon Valley, where I live, to University R&D labs, to countless Main Street small business owners, Americans are taking risks, embracing new ideas and -- most importantly -- creating jobs. America's future prosperity depends on our ability to maintain this lead. But today, it is getting harder and harder to maintain. A quick glance is the rear-view mirror reveals that other countries are catching up and at an alarming rate. Part of this is due to their determination to overtake us, but part is due to structural changes in the nature of entrepreneurship. Startups are the lifeblood of our economy. In the past two decades, they have accounted for nearly all the net job growth in our country. Many of these companies are started by entrepreneurs, and are now household names: Google, Yahoo, eBay and Intel. But many more are true American success stories, out of the limelight, quietly creating jobs and securing our future. Take the example of Indiana's Passageways. Paroon Chadha came to the US for his graduate education, and was bitten by the entrepreneurial bug immediately after school. He started Passageways Inc. immediately upon graduating, and has spent the last 8 years struggling to work around visa restrictions. Luckily for the rest of us, he was able to find his path to a green card, and now employs 24 Americans in West Lafayette, Indiana. For every success story like Paroon's, there are dozens -- hundreds -- of similar cases that end in failure. Like other industries -- from publishing to automobiles -- entrepreneurship is in the process of being disrupted by globalization. The cost of creating new companies is falling rapidly, and access to markets, distribution, and information is within the reach of anyone with an Internet connection. The result is a profound democratization of the digital means of production. When Steve Jobs and Steve Wozniak created Apple computer in a garage in Palo Alto, it heralded the beginning of the PC revolution that ultimately dealt a death-blow to dozens of older companies. That could only have happened in Silicon Valley or one of a few specialized technology hubs that had the manufacturing, engineering, and software specialists required to build their first products. But when Mark Zuckerberg started Facebook in his dorm room in Boston, he unleashed a revolution, too. But something had changed -- it's our good fortune as Americans that Facebook began in an American dorm, but there is nothing necessary about it. It could have happened elsewhere. And it's our good fortune that Mark was already an American citizen, and so could move to Silicon Valley without difficulty, where he now leads a company that employs hundreds -- and soon, thousands. If the next Facebook, Google, or Amazon begins in another country, the economic growth that it sparks will benefit us, too. But the jobs will be created over there. The United States is locked in a new arms race for that most precious resource -- the future entrepreneurs upon whom economic growth depends. Substantial research shows that immigrants play a key role in American job creation. For example, over 25% of the technology companies founded between 1995-2005 had a key immigrant founder. These companies produced over $52 billion dollars in sales in 2005, and employed 450,000 workers that year. Similarly, 24% of all the patents filed in the US in 2006 had a foreign resident as inventor or co-inventor. If we allow other countries to welcome these immigrants, support them and nurture them, we will lose out in this race. We will not lose on their products -- after all, most of them are global. We will not necessarily harm investors, either: as capital is increasingly global, they will be able to invest wherever good ideas are born. The cost will be felt in jobs -- thousands of new jobs that could have been created here, but weren't. Plan key to high tech innovation – now is the key juncture MTLC 10 [Massachusetts Technology Leadership Council, ―MassTLC Supports Start-Up Visa Legislation‖, 03-12-2010, http://blog.masstlc.org/2010/03/masstlc-supports-start-up-visa.html] First, throughout our history we've relied on foreign-born entrepreneurs to help spur economic growth. Nationwide, about a quarter of our technology companies have been founded by immigrants. Here in Massachusetts, some of our most notable tech giants were created by brilliant, visionary immigrants like An Wang of Wang Laboratories, Desh Deshpande of Sycamore Networks, and Ash Dahod, who recently sold Starent Networks to Cisco for nearly three billion dollars. Second, now more than ever, our foreign-born students can return to their home countries to find opportunity. A recent study found that 52 percent of the Chinese students attending U.S. colleges and universities believed they would find greater opportunities if they returned home after graduation. With some 445K students currently enrolled at Massachusetts colleges and universities, we naturally have one of the nation's largest pools of foreign-born students, a disproportionate talent asset that, in turn, can create tremendous innovation and wealth in our Commonwealth. We need to retain every one of those students who is willing to strike out on his or her own to start a company and create new jobs and wealth in our Commonwealth. We believe this tradition of great foreign-born entrepreneurs starting companies and hiring here must be maintained and nurtured if we are to succeed in an increasingly competitive world. As connectivity and talent have become globally available commodities, the barriers that foreign-born entrepreneurs face when starting businesses outside the United States have all but disappeared. To maintain our leadership position, we need the best entrepreneurs -- domestic and foreign-born -- to stay here and build tomorrow's leading technology companies in the Commonwealth. Immediate EB-5 expansion key to economic leadership Arrison 10 [Sonia Arrison, ―Silicon Valley's Innovative Approach to Creating American Jobs‖, TechNewsWorld, 03-31-2010, http://www.technewsworld.com/story/69661.html?wlc=1276702494] Anytime immigration comes up in public debate, you can be sure there will be protectionist groups ready to pounce, arguing that America should tighten its borders. For instance, the Programmers Guild argues that "the vast majority of start-ups fail," so visas shouldn't be granted to foreign entrepreneurs because they might not leave the country when their businesses go under. This is a weak argument, since the entrepreneurs will have to leave the country if they want to work at a legitimate job, which these professionals will certainly want to do. Perhaps a more serious argument against the bill came from the Paris-based entrepreneur Pascal-Emmanuel Gobry. Gobry worries that "The Startup Visa Act doesn't actually create new visas. It just takes existing allotted visas, in the EB-5 class," which allows foreigners into the country if they can invest $500,000 to $1 million in U.S. companies. This is a good point. The U.S. immigration system does still need to be reformed, and this one tweak won't solve everything. Still, around half of the EB-5 visas go unused, and when they are issued, they are more about letting capital into the country rather than talent. The startup visa is a step in the right direction, because it targets talent and clearly incentivizes smart people to create American jobs. Given tough economic times, Congress should act quickly. In an increasingly global world, other countries are getting more aggressive in extending incentives to create their own versions of Silicon Valley. It's time to create more jobs and preserve America's place as the entrepreneurial capital of the world. Immigration entrepreneurs are vital to a credible economic model Ortmans 09 [Jonathan Ortmans, president of the Public Forum Institute, a non-partisan organization dedicated to fostering dialogue on important policy issues, ―Rationalize our Immigration System‖, Ewing Marion Kauffman Foundation, 2009, http://www.entrepreneurship.org/Resources/Detail/Default.aspx?id=21342] The existing system of immigration into the U.S. is unfriendly to prospective entrepreneurs. The processing of visas and green cards is bureaucratic, and the number of high-skill migrants to the U.S. is capped at an artificially low level. In the meantime, other nations have been reforming in order to compete for highly qualified human capital. As a result, America has been losing its attraction as a ―brain magnet.‖ The United States should rationalize its immigration system soon, with a special focus on immigrant entrepreneurs. To start, considering that most high-skill immigrants have been attracted to the U.S. for its excellent universities, we must encourage them to stay to create valuable, fast-growing startup firms upon graduation. The U.S. should offer instant citizenship to bright young people from foreign countries who graduate from our universities. We should also refine the EB-5 visa, the so-called ―entrepreneur‘s visa.‖ Instead of requiring prospective immigrants to bring cash into the country (the current rule requires $1,000,000 or $500,000 if the company is in a distressed area), the criteria should embody incentives to attract human capital. In particular, the EB-5 visa process should favor those who plan to come and start companies, with the possibility of extension once the visa holder begins hiring American residents. If bringing cash into the country has proven effective for distressed areas and EB-5 visas are seen as effective, create a new E category – the Entrepreneurs Visa. It is time to make the U.S. once again a true magnet for entrepreneurs. Reforming our immigration system in a way that attracts innovative ideas and their executors holds great promise for unlocking our nation‘s economic potential and assuring sustained economic strength. Economic leadership prevents global WMD conflicts Mead 04 [Walter Russell Mead, Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations, ―America's sticky power,‖ Foreign Policy, March 2004] THE SUM OF ALL POWERS? The United States' global economic might is therefore not simply, to use Nye's formulations, hard power that compels others or soft power that attracts the rest of the world. Certainly, the U.S. economic system provides the United States with the prosperity needed to underwrite its security strategy, but it also encourages other countries to accept U.S. leadership. U.S. economic might is sticky power. How will sticky power help the United States address today's challenges? One pressing need is to ensure that Iraq's economic reconstruction integrates the nation more firmly in the global economy. Countries with open economies develop powerful trade-oriented businesses; the leaders of these businesses can promote economic policies that respect property rights, democracy, and the rule of law. Such leaders also lobby governments to avoid the isolation that characterized Iraq and Libya under economic sanctions. And looking beyond Iraq, the allure of access to Western capital and global markets is one of the few forces protecting the rule of law from even further erosion in Russia. China's rise to global prominence will offer a key test case for sticky power. As China develops economically, it should gain wealth that could support a military rivaling that of the United States; China is also gaining political influence in the world. Some analysts in both China and the United States believe that the laws of history mean that Chinese power will someday clash with the reigning U.S. power. Sticky power offers a way out. China benefits from participating in the U.S. economic system and integrating itself into the global economy. Between 1970 and 2003, China's gross domestic product grew from an estimated $106 billion to more than $1.3 trillion. By 2003, an estimated $450 billion of foreign money had flowed into the Chinese economy. Moreover, China is becoming increasingly dependent on both imports and exports to keep its economy (and its military machine) going. Hostilities between the United States and China would cripple China's industry, and cut off supplies of oil and other key commodities. Sticky power works both ways, though. If China cannot afford war with the United States, the United States will have an increasingly hard time breaking off commercial relations with China. In an era of weapons of mass destruction, this mutual dependence is probably good for both sides. Sticky power did not prevent World War I, but economic interdependence runs deeper now; as a result, the "inevitable" U.S.-Chinese conflict is less likely to occur. Entrepreneurs uniquely key in this economic cycle Joyner and Markiewicz 10 [Tammy Joyner and David Markiewicz, ―Entrepreneurs could push economy forward‖, Atlanta Journal Constitution, 6-27-2010, http://www.ajc.com/business/entrepreneurs-could-push-economy-558731.html] Could the surge in entrepreneurs be just what the country needs to further revive the sluggish U.S. economy? ―It‘s a key to solving the big problem of huge segments of people who‘ve been left behind in this recession,‖ said John Challenger, chief executive of the Chicago outplacement firm Challenger, Gray & Christmas, which tracks workforce and economic trends. ―Entrepreneurs may lead the recovery.‖ On a deeper level, the rise in new business owners also signals an historic shift in what will drive the U.S. economy in the future. Unlike past downturns, this one holds unique peculiarities . For one, many of the industries that helped pull the country out of past recessions — autos and banks — have faced devastating, irreversible problems this go-round and aren‘t likely to reprise their roles as labor market saviors. ―No way is the recovery going to happen without the increase in entrepreneurs,‖ said Dane Stangler, research manager at the Kansas City, Mo.-based Kauffman Foundation, one of the world‘s largest foundations devoted to entrepreneurship. ―In 20 or 30 years , we‘re going to look back on this recession, and it will be a mark on the historic timeline where we precisely moved away from old-line industrial capitalism into full- fledged entrepreneurial capitalism.‖ And, economic leadership is key to sustaining multilateral trade Bergsten 01 [C. Fred Bergsten, director of the Institute for International Economics and former Assistant Secretary of the Treasury, March/April, 2001, America's Two-Front Economic Conflict, Foreign Affairs, p. lexis] A MORE SUBTLE CAUSE of the present crisis is the decline of effective U.S. leadership in the global economic system. This in turn stems from a domestic popular backlash against globalization and the resulting political stalemate in Washington. During the postwar period, the pervasive tension between regionalism and multilateralism (mainly as a result of increasing European integration) was generally resolved in favor of multilateralism due to steady American leadership in that direction. The United States insisted on a new round of global trade liberalization after each major step in the European integration process, which otherwise would have created additional trade discrimination and likely emulation around the world. Thus the primacy of GATT was maintained. Indeed, a positive dynamic between regional and global trade liberalization remained consistent for more than four decades. Even when the United States itself began to embrace regionalism -- from bilateral free trade with Canada to the North American Free Trade Agreement to the proposed Free Trade Area of the Americas (FTAA) -- it was careful to simultaneously pursue new multilateral initiatives to ensure an umbrella of global trade liberalization. Washington's ability to maintain such leadership has been severely curtailed over the past five years, however. Despite the strength of America's economy and the reduction of its unemployment rate to a 30-year low, the popular backlash against globalization has produced a political stalemate on most international economic issues. As a result, the president has had no effective authority to negotiate new trade agreements since 1994. Legislation to replenish the IMF languished for a year in the midst of the Asian crisis, until it was rescued fortuitously by the farm community's interest in restoring its exports to Asia. Even relatively straightforward issues -- such as extending permanent normal trade relations to China or offering enhanced market access to Africa and the Caribbean -- required lengthy, all-out presidential and business campaigns to persuade Congress. Largely as a result of this domestic standstill, America's international economic posture has been compromised. The United States' initial refusal in 1997 to contribute to the IMF support package for Thailand for fear of further riling Congress, for example, earned lasting enmity throughout Asia. The main reason for the debacle at Seattle was the United States' inability to propose a new round of trade negotiations that would meet the legitimate interests of other major players. Lacking the domestic authority to lower its own trade barriers, Washington was forced to offer an agenda that sought to reduce protection only in other countries -- a prospect that was understandably unappealing to the rest of the world. Similarly, in 1997 -- 98 APEC negotiations, the United States unsuccessfully pushed a program of sector-specific liberalization that focused almost wholly on U.S. export interests. And six years after the idea of the FTAA was launched in Miami, little progress has been made toward hemispheric trade liberalization. This international leadership vacuum has had two subtle but profound effects on the world economy. Like a bicycle on a hill, the global trading system tends to slip backwards in the absence of continual progress forward. Now, with no serious multilateral trade negotiations taking place anywhere in the world, the backsliding has come in the form of intensified regionalism (which is inherently discriminatory), as well as mercantilist and protectionist disputes across the Atlantic. An East Asian free trade area -- and along with it, a three-bloc world -- will likely emerge if the United States remains on the sidelines of international trade for another five years. Such U.S. impotence would also mean that the traditionally positive impact of regional liberalization on the multilateral process would give way to increasing antagonism and even hostility between the regional blocs. The other chief effect of the leadership vacuum is increased international disregard of, or even hostility toward, the United States on the economic front. Because of its weight in the world economy, its dynamic growth, and its traditional leadership role, the United States remains the most important player in the global economic system. The other economic powers generally seek to avoid confronting it directly. The EU, for example, has tried to avoid overt battles, despite its escalating range of disputes with the United States. East Asian governments are careful to assure Washington that their new regional initiatives are fully consistent with existing global norms and institutions -- a conciliatory stance that is in sharp contrast to Mahathir's shrill rhetoric of a decade ago and Japanese Vice Minister of Finance Eisuke Sakakibara's aggressive 1997 promotion of the AMF. In reality, however, the United States is perceived as wanting to call the shots without putting up much of its own money or making changes in its own laws and practices. These specific economic complaints fuse with and feed on more general anti-American sentiments throughout the world. Hence, the two other economic superpowers are proceeding on their own. The EU has launched the euro, a new association agreement with Mexico, and negotiations with Mercosur (the trade bloc comprising Argentina, Brazil, Paraguay, and Uruguay); East Asia is pursuing the AMF and the East Asian free trade area. The result is a clear and steady erosion of both the United States' position on the global economic scene and the multilateral rules and institutions that it has traditionally championed. If not checked soon, this erosion could deteriorate into severe international conflicts and the disintegration of global economic links. Open trade stops nuclear war Copley News Service, ’99 [December 1] For decades, many children in America and other countries went to bed fearing annihilation by nuclear war. The specter of nuclear winter freezing the life out of planet Earth seemed very real. nations join together in groups like the Activists protesting the World Trade Organization's meeting in Seattle apparently have forgotten that threat. The truth is that WTO not just to further their own prosperity, but also to forestall conflict with other nations. In a way, our planet has traded in the threat of a worldwide nuclear war for the benefit of cooperative global economics. Some Seattle protesters clearly fancy themselves to be in the mold of nuclear disarmament or anti-Vietnam War protesters of decades past. But they're not. They're special-interest activists, whether the cause is environmental, labor or paranoia about global government. Actually, most of the demonstrators in Seattle are very much unlike yesterday's peace activists, such as Beatle John Lennon or philosopher Bertrand Russell, the father of the nuclear disarmament movement, both of whom urged people and nations to work together rather than strive against each other. These and other war protesters would probably approve of 135 WTO nations sitting down peacefully to discuss economic issues that in the past might have been settled by bullets and bombs. As long as nations are trading peacefully, and their economies are built on exports to other countries, they have a major disincentive to wage war. That's why bringing China, a budding superpower, into the WTO is so important. As exports to the United States and the rest of the world feed Chinese prosperity, and that prosperity increases demand for the goods we produce, the threat of hostility diminishes. Also solves environmental collapse Schoenbaum, ’92 [Thomas J., Professor and Executive Director of the Center for International and Comparative Law and the University of Georgia, ―Trade and Environment: Free International Trade and Protection of the Environment: Irreconcilable Conflict?‖ The American Society of International Law Newsletter, October, Lexis] The environmentalists who argue that free trade will destroy the environment are shortsighted and wrong. As a recent GATT informational report n8 has pointed out, there is no fundamental conflict between GATT rules and the need to protect environmental quality. Analysis shows that existing GATT regulations place virtually no constraints on the ability of a nation to protect its own environment and resources against damage caused by either domestic production or domestically produced or imported products. n9 GATT rules can also be made consistent with efforts to preserve regional and global environmental quality. Furthermore, trade liberalization, whether on a global or regional basis, will actually help the environmentalists' cause by (1) fostering common standards for environmental protection that must be observed even by certain developing countries that currently ignore environmental concerns; n10 (2) terminating subsidies, particularly in agriculture, that are environmentally destructive, as well as inefficient; n11 and (3) ensuring economic growth, which will create the financial means, particularly for developing countries, to control pollution and protect the environment. n12 Environmental collapse causes extinction Diner 94 ["The Army and the Endangered Species Act: Who's Endangering Whom" l/n] By causing widespread extinctions, humans have artificially simplified many ecosystems. As biologic simplicity increases, so does the risk of ecosystem failure. The spreading Sahara Desert in Africa, and the dustbowl conditions of the 1930s in the United States are relatively mild examples of what might be expected if this trend continues. Theoretically, each new animal or plant extinction, with all its dimly perceived and intertwined effects, could cause total ecosystem collapse and human extinction. Each new extinction increases the risk of disaster. Like a mechanic removing, one by one, the rivets from an aircraft's wings, [hu]mankind may be edging closer to the abyss. ([ ] = correction) There’s no alternative to multilateral trade – it is a pre-requisite for global stability and prevents global superpower wars Supachai Panitchpakdi, secretary-general of the UN Conference on Trade and Development, 2/26/2004, American Leadership and the World Trade Organization, p. http://www.wto.org/english/news_e/spsp_e/spsp22_e.htm The second point is that strengthening the world trading system is essential to America's wider global objectives. Fighting terrorism, reducing poverty, improving health, integrating China and other countries in the global economy — all of these issues are linked, in one way or another, to world trade. This is not to say that trade is the answer to all America's economic concerns; only that meaningful solutions are inconceivable without it. The world trading system is the linchpin of today's global order — underpinning its security as well as its prosperity. A successful WTO is an example of how multilateralism can work. Conversely, if it weakens or fails, much else could fail with it. This is something which the US — at the epicentre of a more interdependent world — cannot afford to ignore. These priorities must continue to guide US policy — as they have done since the Second World War. America has been the main driving force behind eight rounds of multilateral trade negotiations, including the successful conclusion of the Uruguay Round and the creation of the WTO. The US — together with the EU — was instrumental in launching the latest Doha Round two years ago. Likewise, the recent initiative, spearheaded by Ambassador Zoellick, to re-energize the negotiations and move them towards a successful conclusion is yet another example of how essential the US is to the multilateral process — signalling that the US remains committed to further liberalization, that the Round is moving, and that other countries have a tangible reason to get on board. The reality is this: when the US leads the system can move forward; when it withdraws, the system drifts. The fact that US leadership is essential, does not mean it is easy. As WTO rules have expanded, so too has as the complexity of the issues the WTO deals with — everything from agriculture and accounting, to tariffs and telecommunication. The WTO is also exerting huge gravitational pull on countries to join — and participate actively — in the system. The WTO now has 146 Members — up from just 23 in 1947 — and this could easily rise to 170 or more within a decade. Emerging powers like China, Brazil, and India rightly demand a greater say in an institution in which they have a growing stake. So too do a rising number of voices outside the system as well. More and more people recognize that the WTO matters. More non-state actors — businesses, unions, environmentalists, development NGOs — want the multilateral system to reflect their causes and concerns. A decade ago, few people had even heard of the GATT. Today the WTO is front page news. A more visible WTO has inevitably become a more politicized WTO. The sound and fury surrounding the WTO's recent Ministerial Meeting in Cancun — let alone Seattle — underline how challenging managing the WTO can be. But these challenges can be exaggerated. They exist precisely because so many countries have embraced a common vision. Countries the world over have turned to open trade — and a rules-based system — as the key to their growth and development. They agreed to the Doha Round because they believed their interests lay in freer trade, stronger rules, a more effective WTO. Even in Cancun the great debate was whether the multilateral trading system was moving fast and far enough — not whether it should be rolled back. Indeed, it is critically important that we draw the right conclusions from Cancun — which are only now becoming clearer. The disappointment was that ministers were unable to reach agreement. The achievement was that they exposed the risks of failure, highlighted the need for North-South collaboration, and — after a period of introspection — acknowledged the inescapable logic of negotiation. Cancun showed that, if the challenges have increased, it is because the stakes are higher. The bigger challenge to American leadership comes from inside — not outside — the United States. In America's current debate about trade, jobs and globalization we have heard a lot about the costs of liberalization. We need to hear more about the opportunities. We need to be reminded of the advantages of America's openness and its trade with the world — about the economic growth tied to exports; the inflation-fighting role of imports, the innovative stimulus of global competition. We need to explain that freer trade works precisely because it involves positive change — better products, better job opportunities, better ways of doing things, better standards of living. While it is true that change can be threatening for people and societies, it is equally true that the vulnerable are not helped by resisting change — by putting up barriers and shutting out competition. They are helped by training, education, new and better opportunities that — with the right support policies — can flow from a globalized economy. The fact is that for every job in the US threatened by imports there is a growing number of high-paid, high skill jobs created by exports. Exports supported 7 million workers a decade ago; that number is approaching around 12 million today. And these new jobs — in aerospace, finance, information technology — pay 10 per cent more than the average American wage. We especially need to inject some clarity — and facts — into the current debate over the outsourcing of services jobs. Over the next decade, the US is projected to create an average of more than 2 million new services jobs a year — compared to roughly 200,000 services jobs that will be outsourced. I am well aware that this issue is the source of much anxiety in America today. Many Americans worry about the potential job losses that might arise from foreign competition in services sectors. But it‘s worth remembering that concerns about the impact of foreign competition are not new. Many of the reservations people are expressing today are echoes of what we heard in the 1970s and 1980s. But people at that time didn‘t fully appreciate the power of American ingenuity. Remarkable advances in technology and productivity laid the foundation for unprecedented job creation in the 1990s and there is no reason to doubt that this country, which has shown time and again such remarkable potential for competing in the global economy, will not soon embark again on such a burst of job-creation. America's openness to service-sector trade — combined with the high skills of its workforce — will lead to more growth, stronger industries, and a shift towards higher value-added, higher-paying employment. Conversely, closing the door to service trade is a strategy for killing jobs, not saving them. Americans have never run from a challenge and have never been defeatist in the face of strong competition. Part of this challenge is to create the conditions for global growth and job creation here and around the world. I believe Americans realize what is at stake. The process of opening to global trade can be disruptive, but they recognize that the US economy cannot grow and prosper any other way. They recognize the importance of finding global solutions to shared global problems. Besides, what is the alternative to the WTO? Some argue that the world's only superpower need not be tied down by the constraints of the multilateral system. They claim that US sovereignty is compromised by international rules, and that multilateral institutions limit rather than expand US influence. Americans should be deeply sceptical about these claims. Almost none of the trade issues facing the US today are any easier to solve unilaterally, bilaterally or regionally. The reality is probably just the opposite. What sense does it make — for example — to negotiate e-commerce rules bilaterally? Who would be interested in disciplining agricultural subsidies in a regional agreement but not globally? How can bilateral deals — even dozens of them — come close to matching the economic impact of agreeing to global free trade among 146 countries? Bilateral and regional deals can sometimes be a complement to the multilateral system, but they can never be a substitute. There is a bigger danger. By treating some countries preferentially, bilateral and regional deals exclude others — fragmenting global trade and distorting the world economy. Instead of liberalizing trade — and widening growth — they carve it up. Worse, they have a domino effect: bilateral deals inevitably beget more bilateral deals, as countries left outside are forced to seek their own preferential arrangements, or risk further marginalization. This is precisely what we see happening today. There are already over two hundred bilateral and regional agreements in existence, and each month we hear of a new or expanded deal. There is a basic contradiction in the assumption that bilateral approaches serve to strengthen the multilateral, rules-based system. Even when intended to spur free trade, they can ultimately risk undermining it. This is in no one's interest, least of all the United States. America led in the creation of the multilateral system after 1945 precisely to avoid a return to hostile blocs — blocs that had done so much to fuel interwar instability and conflict. America's vision, in the words of Cordell Hull, was that ―enduring peace and the welfare of nations was indissolubly connected with the friendliness, fairness and freedom of world trade‖. Trade would bind nations together, making another war unthinkable. Non-discriminatory rules would prevent a return to preferential deals and closed alliances. A network of multilateral initiatives and organizations — the Marshal Plan, the IMF, the World Bank, and the GATT, now the WTO — would provide the institutional bedrock for the international rule of law, not power. Underpinning all this was the idea that freedom — free trade, free democracies, the free exchange of ideas — was essential to peace and prosperity, a more just world. It is a vision that has emerged pre-eminent a half century later. Trade has expanded twenty-fold since 1950. Millions in Asia, Latin America, and Africa are being lifted out of poverty, and millions more have new hope for the future. All the great powers — the US, Europe, Japan, India, China and soon Russia — are part of a rules-based multilateral trading system, greatly increasing the chances for world prosperity and peace. There is a growing realization that — in our interdependent world — sovereignty is constrained, not by multilateral rules, but by the absence of rules. Contention 2 Asian Economic Cooperation Asia cooperation has transitioned to a new age. Security is now defined in terms of economic cooperation, and the U.S. risks losing it Feigenbaum 10 [Evan A. Feigenbaum, ―Challenge of a changing Asia‖, Business Standard, 9-6-2010] It‘s been a rough six months in East Asia, as tensions ratchet up in Korea, navies drill, and governments, from China to Vietnam, trade barbs, claims and counterclaims to the South China Sea. But even as anxieties grow, it is economics, not security, that still defines the essential strategic reality of Asia today: China is fast becoming the central player in a new economic regionalism. And as economic integration tightens, the US and India risk being left out. For its part, the US has endured decades of loose talk about American ―decline‖ in Asia. But in the months since North Korea torpedoed a South Korean naval corvette in March, America‘s security role has been strongly reinforced. Yet, ironically, that‘s part of the problem: Even as America‘s security role remains the backbone of strategic stability, the economic pillars of US credibility are eroding across Asia. In the postwar period, US leadership in Asia depended not just on alliances, bases and carrier battle groups. It flowed, too, from a sustained commitment to three economic pillars: market openness, faith in America‘s own competitiveness and strong US leadership on international trade agreements and regimes. But all three pillars are now under fierce attack in the US. And this both compounds and further contributes to a rapid erosion of American economic influence, as China becomes the central player in a growing web of trade and financial connections. Take Southeast Asia. From 2000 to 2009, China‘s share of Asean‘s total trade increased threefold, surpassing that of the US, whose share declined by a third in the same period. Meanwhile, when the dust settles from the current financial crisis, the character of economic globalisation may be significantly changed with respect to capital flows, production chains and trade patterns. Asian countries are moving forward together in various ways — on trade, financial arrangements, technical standards and investment rules. And increasingly, they are moving forward on a pan-Asian basis and without Washington. This is precisely why American strategy in Asia is simply not sustainable with the kind of trade policy Washington has presently. For generations, deep trade and investment relationships have been the tangible representation of US economic weight in Asia, reflecting a widespread faith in the future economic and strategic strength of the US. This was true in the 19th century, when fast-sailing clipper ships first vaulted America into a role that spanned China, India and the waters betwixt and between. It remains true today. The good news is that US President Barack Obama‘s November visit to Seoul has given Washington strong incentives to complete the Korea-US Free Trade Agreement this fall. But there is virtually no prospect that the US will keep pace with Beijing‘s burgeoning trade and investment initiatives. And across Asia, anxieties persist about America‘s own economic prospects: the scope and nature of its recovery from the financial crisis; its commitment to stave off protectionist sentiment; and whether it can muster a bipartisan political consensus to manage its debts. This offers a cautionary tale for India. Strategically, India has been bottled up in the subcontinent for generations, but it wasn‘t always so: Southeast Asia bears the hallmarks of a bygone era in names like ―Indonesia‖ and ―Indochina‖, and Indian sailors once plied the trade routes from the Indian Ocean to the Strait of Malacca. But as it again ―looks East‖, India risks being left out in Asia because of the significant mismatch between its lofty strategic goals and more earthbound economic realities. Make no mistake, India‘s strategic connections to East Asia are being restored. Yet, this is happening, in large part, because India is widely viewed as a potential — if still very modest — counterbalance to Chinese power. Diplomacy and politics remain the central drivers, not least, for example, in the invitation to India to become a more active player in East Asian regional groups. But, at the end of the day, strategic intentions alone cannot sustain a larger role for India in Asia writ large. As America is rediscovering, economic content is essential. Greater economic content to India‘s relations with East Asia will be required. And, investment-related reforms will surely be essential, too, to enhance the flow of goods, capital and opportunity. Trade plays a growing role in the Indian economy, and India has signed preferential trade agreements with Asean and South Korea. Yet, scale remains a handicap: 11.6 per cent of Asean‘s trade is with China, just 2.5 per cent with India. Meanwhile, the backbone of East Asian economies remains integrated supply and production chains to which India is largely irrelevant. More manufacturing in India‘s southern states could mean greater integration into East Asian supply and production chains, or not. Likewise with outbound investment from corporate India: it could, perhaps, transform India‘s interactions with Southeast Asia; but, here too, scale remains a handicap. The business of Asia is still business. And India and East Asia have some distance yet to travel. U.S. economic ties increases immigration and encourages further integration Yang 10 [Philip Q. Yang, ―A Theory of Asian Immigration to the United States‖, Journal of Asian American Studies, Vol. 13, No. 1, February 2010] However, mere cross-country disparities will not automatically cause migration, and they only serve as potential motivators for migration. There must be forces that initiate migration and forces that sustain it. These initiating and perpetuating forces entail connections at both the macro and micro levels. At the macro level, there must be cross-national connections between sending and receiving countries. In fact, intercountry connections can be conceptualized as a network of countries linked by interactions.61 In the case of Asian immigration to the United States, U.S. involvement in Asian sending countries acts to establish U.S.-Asia ties. U.S. involvement creates a large conducive social environment that makes immigration possible or likely to occur. It helps activate the effect of disparities between the Asian countries and the United States, and it [End Page 18] causes the formation of a pool of potential migrants and the emergence of emigration as an actual option. The higher the level of U.S. involvement in Asian countries, the higher the level of immigration to the United States, ceteris paribus. This is the essence of world system theory.62 Intercountry connections could be economic, military, political, or cultural. Each dimension of these connections or involvements affects immigration to the United States through specific mechanisms. The most common form of U.S.-Asia connections is U.S. economic involvement in Asian countries. U.S. economic involvement includes U.S trade with Asian countries, U.S. direct investment in Asian countries, establishment of U.S.-owned factories in Asia, operation of U.S. transnational corporations in Asia, training of Asian management and technical personnel in the United States or in Asia, and so forth. U.S. economic involvement displaces people from traditional economies and creates an emigrant pool; it heightens potential migrants' awareness of the disparities between the United States and their own country; and it consolidates the objective and ideological linkages with the receiving country.63 Through these mechanisms, U.S. economic involvement becomes a factor pushing Asians to leave their homelands and pulling them to the United States. The effects of U.S. economic involvements on Asian immigration before World War II were well documented in Cheng and Bonacich's 1984 volume.64 The Western powers, including the United States, imposed unequal treaties concerning trade, tariffs, and labor flow on all the Asian countries; shook slack Asians from their traditional economic base, rendering them available for labor recruitment; and actively recruited Asians for migration to the U.S. Pacific Coast and Hawaii as cheap labor to meet the labor demand. The impact of U.S. economic involvement on new Asian immigration after World War II was analyzed by Ong, Bonacich, and Cheng in 1994 and needs more documentation.65 But one basic fact is that major Asian sending countries in the post-1965 period all have close economic ties with the United States. Immigrant entrepreneurs are key to developing that economic integration Saxenian 00 [AnnaLee Saxenian, ―Silicon Valley‘s New Immigrant Entrepreneurs‖, University of California, Santa Cruz, The Center for Comparative Immigration Studies, 2000] At the same time that Silicon Valley's immigrant entrepreneurs organized local professional networks, they were also building ties back to their home countries. The region's Chinese engineers constructed a vibrant two-way bridge connecting the technology communities in Silicon Valley and Taiwan; their Indian counterparts became key middlemen linking U.S. businesses to low-cost software expertise in India. These cross-Pacific networks represent more than an additional "ethnic resource" that supports entrepreneurial success; rather, they provide the region's skilled immigrants with an important advantage over their mainstream competitors who often lack the language skills, cultural know-how, and contacts to build business relationships in Asia. The traditional image of the immigrant economy is the isolated Chinatown or "ethnic enclave" with limited ties to the outside economy. Silicon Valley's new immigrant entrepreneurs, by contrast, are increasingly building professional and social networks that span national boundaries and facilitate flows of capital, skill, and technology. In so doing, they are creating transnational communities that provide the shared information, contacts, and trust that allow local producers to participate in an increasingly global economy (Portes, 1996). As recently as the 1970s, only very large corporations had the resources and capabilities to grow internationally, and they did so primarily by establishing marketing offices or manufacturing plants overseas. Today, by contrast, new transportation and communications technologies allow even the smallest firms to build partnerships with foreign producers to tap overseas expertise, cost-savings, and markets. Start-ups in Silicon Valley today are often global actors from the day they begin operations: Many raise capital from Asian sources, others subcontract manufacturing to Taiwan or rely on software development in India, and virtually all sell their products in Asian markets. The scarce resource in this new environment is the ability to locate foreign partners quickly and to manage complex business relationships across cultural and linguistic boundaries. This is particularly a challenge in high-technology industries in which products, markets, and technologies are continually being redefined--and where product cycles are routinely shorter than nine months. First-generation immigrants, like the Chinese and Indian engineers of Silicon Valley, who have the language, cultural, and technical skills to function well in both the United States and foreign markets are distinctly positioned to play a central role in this environment. They are creating social structures that enable even the smallest producers to locate and maintain mutually beneficial collaborations across long distances and that facilitate access to Asian sources of capital, manufacturing capabilities, skills, and markets. These ties have measurable economic benefits. Research at the University of California at Berkeley has documented a significant correlation between the presence of first-generation immigrants from a given country and exports from California. For example, every 1 percent increase in the number of first-generation immigrants from a given country, exports from California go up nearly 0.5 percent. Moreover, this effect is especially pronounced in the Asia-Pacific region where, all other things being equal, California exports nearly four times more than it exports to comparable countries in other parts of the world (Bardhan and Howe, 1998). This section presents cases of immigrant entrepreneurs in Silicon Valley who have helped to construct the new transnational (and typically trans-local) networks. The region's Taiwanese engineers have forged close social and economic ties to their counterparts in the Hsinchu region of Taiwan--the area, comparable in size to Silicon Valley, that extends from Taipei to the Hsinchu Science-Based Industrial Park. They have created a rich fabric of professional and business relationships that supports a two-way process of reciprocal industrial upgrading. Silicon Valley's Indian engineers, by contrast, play a more arm's-length role as middlemen linking U.S.-based companies with low-cost software expertise in localities like Bangalore and Hyderabad. In both cases, the immigrant engineers provide the critical contacts, information, and cultural know-how that link dynamic--but distant--regions in the global economy. Economic cooperation in Asia solves U.S.-Japan relations, stops East Asian war Shirashi 09 [Takashi Shirashi, ―Japan-U.S. ties crucial for East Asia community‖, Japan Center for Economic Research, 11-10-2009] Two things are crucial. First, all East Asian countries have formulated their security policies with the Japan-U.S. alliance as a given. If the future of the Japan-U.S. alliance were to come under question, security in East Asia would become unstable. In the worst-case scenario, the United States would withdraw its military forces to the Guam-Hawaii line and shift its strategy from the current forward defense to an offshore balancing act. Japan will then be forced to allocate far greater resources for its defense than it does now. If Japan chooses to strengthen its defense capabilities, China likely would further accelerate its military growth, with South Korea and Vietnam following suit. When East Asian countries have no choice but to prioritize defense expenditure over economic growth, the common political will to build an East Asian community will be lost. Keeping the current system in place heightens the predictability that security will be maintained. The government should bear this in mind as it decides on the kind of assistance it will extend to Afghanistan and Pakistan in their nation-building efforts, and on the issues of cooperation with Washington on its military realignment plan and relocation of the U.S. Marine Corps‘ Futenma Air Station in Okinawa Prefecture. Second, it is also important to promote regional cooperation and economic partnership in the name of East Asian community-building. Most of the governments in East Asia have staked their legitimacy on the politics of productivity, in which achieving a national consensus on economic growth, job creation, poverty reduction and higher standards of living is seen as the primary purpose of politics. Regional economic development is also crucial to Japan‘s growth strategy. Promoting economic partnership and increasing economic interdependence in the name of East Asian community-building are the way to go. Asian wars escalate Cirincione 00 [Cirincione, director of the Non-Proliferation Project at the Carnegie Endowment for International Peace, 2000 <Joseph, Foreign Policy, ―The Asian Nuclear Reaction Chain,‖ Lexis>] North Korea continues to play guessing games with its nuclear and missile programs; South Korea wants its own missiles to match Pyongyang's; India and Pakistan shoot across borders while running a slow-motion nuclear arms race; China modernizes its nuclear arsenal amid tensions with Taiwan and the United States; Japan's vice defense minister is forced to resign after extolling the benefits of nuclear weapons; and Russia--whose Far East nuclear deployments alone make it the largest Asian nuclear power--struggles to maintain territorial coherence. Five of these states have nuclear weapons; the others are capable of constructing them. Like neutrons firing from a split atom, one nation's actions can trigger reactions throughout the region, which in turn, stimulate additional actions. These nations form an interlocking Asian nuclear reaction chain that vibrates dangerously with each new development. If the frequency and intensity of this reaction cycle increase, critical decisions taken by any one of these governments could cascade into the second great wave of nuclear- weapon proliferation, bringing regional and global economic and political instability and, perhaps, the first combat use of a nuclear weapon since 1945. Independently, the plan is key to U.S.-China economic cooperation Koehn and Yin 02 [Peter H. Koehn and Xiao-Huang Yin, ―The expanding roles of Chinese Americans in U.S.-China relations: transnational networks and trans-Pacific interactions‖, M.E. Sharpe, pg. 16, 2002] Among the various social forces that could re-shape U.S.-China relations, Chinese American families are among the most established global players. Chinese-immigrant entrepreneurs have not only transplanted their family networks, they also have expanded Chinese-owned trans-Pacific trade, transportation businesses, and banks. The third type of trans-Pacific family, in particular, illustrates how Chinese Americans who maintain borderless family networks act to strengthen U.S.- China economic relations—one critically important aspect of the overall relationship. Businesses on both sides need a gateway to help penetrate each other‘s market. Trans-Pacific family networks of all three types can provide such a gateway. Family and kinship connections are the Chinese rim‘s building blocks. Given their global family networks and economic power, Chinese Americans have profoundly shaped and will continue to influence U.S.-China relations. And, U.S.-China economic cooperation solves war over Taiwan and North Korean loose nukes Tanner 04 [Travis Tanner, ―U.S.-China Economic Ties: Key for Asian Stability‖, The National Interest, 4-28-2004] U.S.-China Economic Ties: Key for Asian Stability Travis Tanner | April 28, 2004 Travis Tanner is the Assistant Director of China Studies at The Nixon Center. In an effort to notch up U.S.-China relations on the Bush administration's agenda, three cabinet level officials- Secretary of Commerce Donald Evans, Trade Representative Robert Zoellick and Secretary of Agriculture Ann Veneman-together with a Chinese delegation of 70 individuals, participated in the 15th session of the Joint Commission on Commerce and Trade (JCCT) on April 21st. The Chinese Vice-Premier Wu Yi, Mr. Evans and Mr. Zoellick jointly chaired the meeting held in Washington DC. This was the highest level delegation to participate in the session in over a decade. The meeting resulted in, among other assurances, a Chinese commitment to drop plans to adopt its own wireless encryption standard and to crack down on IPR infringements, while the U.S. pledged to reconsider its ban on certain high-tech exports to China. The presence of a relatively large number of top-level bureaucrats suggests the high priority both the United States and the PRC assign to their mutual economic relationship. Although the commercial benefits of U.S.-China economic ties are critical components of both nations' economies-the United States is China's second largest trading partner and China is the United States' third largest trading partner-the benefits extend beyond economic advantages. Progress, expansion and coordination on economic issues provide the foundation upon which cooperation on a larger strategic level can be orchestrated and the current and future strain on the relationship can be managed. Tensions in U.S.-China relations will most likely intensify in the approaching months as U.S. presidential campaigning picks up and further sparks "anti-China" discussion in the United States. Current matters of disagreement include Beijing's view that by proposing to sell an advanced radar system to Taiwan the U.S. is violating the "Three Communiqués" and claims that the reports of Beijing backsliding on human rights are completely unfounded. Washington is worried over the perceived undervalued RMB, Chinese failure to comply with certain WTO commitments and alleged U.S. manufacturing job loss to China. Although these are prickly matters that deserve attention, there are larger tensions on the horizon.Issues that continue to merit Washington and Beijing's full consideration include how to handle cross-Strait relations and North Korea's nuclear capabilities. Newly reelected Taiwan President Chen Shui-bian's current trajectory toward establishing a new constitution for Taiwan and Kim Jong Il's nuclear ambitions present two of the most formidable challenges current U.S. foreign policy faces. Effective handling of both issues heavily depends on cooperation between Washington and Beijing.The degree of coordination required to achieve acceptable solutions on both fronts is extremely high. Thus, in order to successfully manage this relationship, both sides must continue to make progress where possible and emphasize areas of shared interest-this is most effectively achieved through cooperation on the economic front. Unless U.S.-Sino relations are firmly rooted, the ability to successfully secure mutually satisfactory outcomes on these two issues will be difficult at best. Taiwan President Chen Shui- bian continues to stand by his constitutional reform timetable which calls for an island-wide referendum in 2006 and full implementation of the new constitution in 2008. Chen's plans to establish a new constitution are viewed by Beijing as an overt move toward independence, and thus, entirely unacceptable. The U.S. has long held a policy of "strategic ambiguity" toward the Taiwan Strait and insisted that a peaceful solution be reached between the two sides of the Strait without U.S. involvement. However, in a recent 180 degree turn, the PRC asked the United States to become more active in mediating between the two sides. This is an opportunity for the U.S. to abandon its ambiguous cross-Strait policy and play an assertive arbitrating role, thereby increasing the likelihood of securing the primary American national interest in the region-stability. As North Korea's long- time friend and ally, the PRC played a constructive role in coordinating the two sessions of "six-party" talks held in Beijing which aimed at brokering a diplomatic solution between the U.S. and North Korea over Pyongyang's underground nuclear program. Because Pyongyang and Washington have continuously butted heads, negotiations have been slow. In an effort to reach a conciliatory resolution, the PRC has encouraged the U.S. to deviate from its stated objective-complete, verifiable and irreversible dismantling of Pyongyang's nuclear program-and exercise more flexibility toward North Korea. Washington and Beijing's divergent approaches to resolving the impasse must be overcome if progress toward an agreement is to be achieved. In a positive sign that the process may be moving in that direction, it is reported that Kim Jong Il (in an unannounced trip to Beijing) pledged to soften his stance toward American demands. Military conflict in the Taiwan Strait or the acquisition of North Korean nuclear weapons by terrorist groups certainly are two scenarios the leaderships in Beijing and Washington would like to avoid. Therefore, it is essential to continue moving forward in the realm of economic cooperation where both countries share an increasing number of similar objectives and where progress is occurring. For both countries, economic growth hinges on the other. During 2000-2003, U.S. exports world-wide increased by 9% while exports to China were up 76%. The U.S. is the single largest export market for firms in China, taking in 30% of total exports produced. The risk of damaging the increasingly integrated economic links naturally encourages negotiation and cooperation on a variety of non-economic related issues, and therefore, expanding economic ties should receive significant attention from the highest levels of the respective leaderships. The hands of the Bush Administration are full coping with turmoil in Iraq, the 9/11 hearings and coordinating a reelection campaign. The Chinese, too, are dealing with a host of domestic problems from economic matters, such as growing inequality and possible overheating of the economy to potential political unrest in Hong Kong. Nevertheless, steps to ensure stability in the U.S.-China relationship are taking place. Vice President Cheney's recent trip to China and subsequent talks with the Beijing leadership, as well as the mutual high-level bilateral support for the JCCT meeting are healthy signals that both countries are willing to expand resources to further solidify U.S.-China relations. While these are steps in the right direction, continued strides toward developing economic relations must remain a high priority for both nations. Taiwan war stops extinction Hunkovic, American Military University, 09 [Lee J, 2009, ―The Chinese-Taiwanese Conflict Possible Futures of a Confrontation between China, Taiwan and the United States of America‖, http://www.lamp- method.org/eCommons/Hunkovic.pdf] A war between China, Taiwan and the United States has the potential to escalate into a nuclear conflict and a third world war, therefore, many countries other than the primary actors could be affected by such a conflict, including Japan, both Koreas, Russia, Australia, India and Great Britain, if they were drawn into the war, as well as all other countries in the world that participate in the global economy, in which the United States and China are the two most dominant members. If China were able to successfully annex Taiwan, the possibility exists that they could then plan to attack Japan and begin a policy of aggressive expansionism in East and Southeast Asia, as well as the Pacific and even into India, which could in turn create an international standoff and deployment of military forces to contain the threat. In any case, if China and the United States engage in a full-scale conflict, there are few countries in the world that will not be economically and/or militarily affected by it. However, China, Taiwan and United States are the primary actors in this scenario, whose actions will determine its eventual outcome, therefore, other countries will not be considered in this study. North Korean nuclearization will cause intentional, miscalculated, or accidental nuclear conflct Hayes & Hamel-Green, 10 – *Executive Director of the Nautilus Institute for Security and Sustainable Development, AND ** Executive Dean of the Faculty of Arts, Education and Human Development act Victoria University (1/5/10, Executive Dean at Victoria, ―The Path Not Taken, the Way Still Open: Denuclearizing the Korean Peninsula and Northeast Asia,‖ http://www.nautilus.org/fora/security/10001HayesHamalGreen.pdf) The international community is increasingly aware that cooperative diplomacy is the most productive way to tackle the multiple, interconnected global challenges facing humanity, not least of which is the increasing proliferation of nuclear and other weapons of mass destruction. Korea and Northeast Asia are instances where risks of nuclear proliferation and actual nuclear use arguably have increased in recent years. This negative trend is a product of continued US nuclear threat projection against the DPRK as part of a general program of coercive diplomacy in this region, North Korea‘s nuclear weapons programme, the breakdown in the Chinese-hosted Six Party Talks towards the end of the Bush Administration, regional concerns over China‘s increasing military power, and concerns within some quarters in regional states (Japan, South Korea, Taiwan) about whether US extended deterrence (―nuclear umbrella‖) afforded under bilateral security treaties can be relied upon for protection. The consequences of failing to address the proliferation threat posed by the North Korea developments, and related political and economic issues, are serious, not only for the Northeast Asian region but for the whole international community. At worst, there is the possibility of nuclear attack1, whether by intention, miscalculation, or merely accident, leading to the resumption of Korean War hostilities. On the Korean Peninsula itself, key population centres are well within short or medium range missiles. The whole of Japan is likely to come within North Korean missile range. Pyongyang has a population of over 2 million, Seoul (close to the North Korean border) 11 million, and Tokyo over 20 million. Even a limited nuclear exchange would result in a holocaust of unprecedented proportions. But the catastrophe within the region would not be the only outcome. New research indicates that even a limited nuclear war in the region would rearrange our global climate far more quickly than global warming. Westberg draws attention to new studies modelling the effects of even a limited nuclear exchange involving approximately 100 Hiroshima-sized 15 kt bombs2 (by comparison it should be noted that the United States currently deploys warheads in the range 100 to 477 kt, that is, individual warheads equivalent in yield to a range of 6 to 32 Hiroshimas). The studies indicate that the soot from the fires produced would lead to a decrease in global temperature by 1.25 degrees Celsius for a period of 6-8 years.3 In Westberg‘s view: That is not global winter, but the nuclear darkness will cause a deeper drop in temperature than at any time during the last 1000 years. The temperature over the continents would decrease substantially more than the global average. A decrease in rainfall over the continents would also follow…The period of nuclear darkness will cause much greater decrease in grain production than 5% and it will continue for many years...hundreds of millions of people will die from hunger…To make matters even worse, such amounts of smoke injected into the stratosphere would cause a huge reduction in the Earth‘s protective ozone.4 These, of course, are not the only consequences. Reactors might also be targeted, causing further mayhem and downwind radiation effects, superimposed on a smoking, radiating ruin left by nuclear next-use. Millions of refugees would flee the affected regions. The direct impacts, and the follow-on impacts on the global economy via ecological and food insecurity, could make the present global financial crisis pale by comparison. How the great powers, especially the nuclear weapons states respond to such a crisis, and in particular, whether nuclear weapons are used in response to nuclear first-use, could make or break the global non proliferation and disarmament regimes. There could be many unanticipated impacts on regional and global security relationships5, with subsequent nuclear breakout and geopolitical turbulence, including possible loss-of-control over fissile material or warheads in the chaos of nuclear war, and aftermath chain-reaction affects involving other potential proliferant states. The Korean nuclear proliferation issue is not just a regional threat but a global one that warrants priority consideration from the international community. Uniquely, Indian immigrant entrepreneurs economic cooperation is key to the resiliency of U.S.-Indian relations Karl 10 [David J. Karl, president of the Asia Strategy Initiative, a consultancy based in Los Angeles that provides policy-relevant analysis of geopolitical, diplomatic and macro-economic developments, with particular focus on South Asia ―Indian- Americans and Bilateral Relations‖, The World Affairs Blog Network, 7-1-2010, http://india.foreignpolicyblogs.com/tag/us-india-relations/] According to a recent report by the RAND Corporation, Indian-American entrepreneurs have business income that is substantially higher than the national average and higher than any other immigrant group. As Vivek Wadhwa and his colleagues document, Indians stand out among immigrant entrepreneurs, having founded from 1995-2005 more U.S.- based engineering and technology companies in the past decade or so than immigrants from the United Kingdom, China, Taiwan and Japan combined. Indian Americans, who tend to be much better educated than other ethnic groups, have also become mainstays of the corporate sector, the health professions and the academic world. (For an analysis of the Indian diaspora in America, see this new Migration Policy Institute report.) Three brief examples demonstrate the rising status of Indian immigrants in American society. The first is the entertaining television ad Intel runs lauding the rock star status of Ajay Bhatt, the co-inventor of the USB computer connection (view it here). The second is the ubiquitous presence of Sanjay Gupta, CNN‘s chief medical correspondent. In 2003, he was named as one of the world‘s sexiest men by People Magazine and a ―pop culture icon‖ by USA Today. And last year he was mentioned as President Obama‘s choice as Surgeon General of the United States, the country‘s top public health official. Also last year, Aneesh Chopra, the son of Indian immigrants, was appointed as the U.S. government‘s first chief technology officer. In short, as one analyst puts it, ―Indians in America are emerging as the new Jews: disproportionately well-educated, well paid, and increasingly well connected politically.‖ And this development has had a significant impact on U.S. foreign policy. First, the success and prosperity of the Indian community contributed to changed U.S. attitudes about India. For most of its independent existence, the country‘s prevailing image among Americans was one of appalling poverty and ruinous incapacity – hardly the attributes that one would desire in a strategic partner. But the increasing stature of Indians in American society helped change public opinion in relatively short order. Instead of the traditional sentiment of disdain or pity, a February 2010 Gallup survey finds that two-thirds of Americans now have a positive impression of India, a favorability level equal to that of Israel. (Another – admittedly hilarious but also telling – indicator of the sea change in U.S. attitudes comes via Rod Blagojevich, the disgraced former governor of Illinois whose federal trial on corruption charges has just begun. According to intercepted phone conversations entered into evidence (read the transcript here), Blagojevich seriously considered trading his choice to fill a vacant U.S. Senate seat for a White House appointment as ambassador to India. His wife counseled him that New Delhi was ―the best choice‖ since ―you‘re in a major powerhouse in the world.‖)The growing impact of the Indian American community catalyzed stronger interest about India on Capitol Hill beginning in the mid-1990s. Pro-India caucuses in the U.S. Congress played an important role in the lifting of U.S. economic sanctions levied against India in the wake of its 1998 nuclear tests, and in securing the ratification of the landmark U.S.-India civil nuclear agreement. Today, a third of the members of the U.S. Senate and House of Representatives belong to these caucuses. The Indian-American community has also been at the forefront in building critical societal linkages between its native and adoptive countries. Consider, for example, the dynamics at work a decade ago. At the same time as Washington was imposing sanctions in response to the 1998 nuclear tests, concerns about the ―Y2K‖ programming glitch led businesses on both sides to set the foundation for today‘s strong technology partnership. The significant role played by these societal bonds leads Fareed Zakaria, an Indian-American who is editor of Newsweek‘s international editions, to compare U.S.-India ties to the special relationships the United States has with Great Britain and Israel. And Shashi Tharoor, until recently India‘s minister of state for external affairs, has likewise remarked that ―in 20 years I expect the Indo-U.S. relationship to resemble the Israel-U.S. relationship, and for many of the same reasons.‖ Although they are often overlooked by national policymakers, non-governmental ties fostered by the Indian-American community will be one key in securing the long-term growth of the new bilateral partnership. U.S.-Indian relations solve Afghanistan stability Flournoy 10 Michele, United States Undersecretary of Defense for Policy (―Investing In the Future of U.S.-India Defense Relations‖, http://asiasociety.org/policy-politics/strategic-challenges/us-asia/investing-future-us-india-defense-relations, July 6, 2010) The U.S.-India relationship is not built on, and cannot be sustained on, grand gestures or Such criticisms miss the mark completely. brief moments of crisis, but on shared interests and values. I look forward to making my first visit to India in the coming weeks, and can assure you that the Pentagon is committed to further strengthening these ties through the enhancement of our defense relationship. This bond is grounded in common democratic values and converging U.S. and India have an overarching shared interest in promoting global stability interests that make India and U.S. natural partners. The and security. Increasingly our specific security interests are converging. Let me give just three examples. First, both the U.S. and Indian economies rely on effective maritime security to preserve free passage in the Indian Ocean and surrounding waterways. Sea lines of communication are fundamental to our continued both countries have an abiding interest in countering the proliferation of prosperity, and we have a mutual interest in their security. Second, weapons of mass destruction. Together, our efforts will help counter this threat to regional and global security. Third, we are both committed to promoting global stability and security. India's post-conflict capacity building efforts span the globe, and it remains one of staunchest supporters of United Nations Peacekeeping Operations. Within South Asia, both of our nations are committed to the long-term stability and reconstruction of Afghanistan. We know as the US mission in Afghanistan evolves, we must continue to provide robust support for Afghan stability, governance and development. India is playing a positive role in Afghanistan's economic and social development and we know that help will continue. We highly value India's role-- and the sacrifices Indian citizens have made-- in building economic and social opportunities in Afghanistan. We see India's continued involvement in Afghanistan's development as a key part of that country's future success. Grounded in these shared interests, our defense relationship has grown substantially since we completed a defense framework agreement in 2005, outlining ten areas of cooperation, including maritime security, counter-proliferation, and peacekeeping operations. As participants noted during the recent Strategic Dialogue, our defense relations have evolved from solely military-to-military links into a more comprehensive relationship that encompasses dialogues, exercises, defense sales, and practical cooperation. At the apex of the US/India defense relationship is the Defense Policy Group, which I look forward to co-chairing this fall. The DPG has been an excellent forum for planning our engagement, airing our concerns, and exchanging views on strategic issues. We also have dialogues that discuss our defense trade, service-to-service cooperation, technical cooperation, and a group dedicated to developing and ensuring procedures for keeping our technology secure. The growth and comprehensiveness of this relationship is nothing short of remarkable. My Indian counterparts now tell me that their defense and security relations with the United States are as close as they are with any nation. Anyone who followed these issues during the Cold War knows well such ties once seemed impossible. Great credit must go to those who over the years have helped us get here, several of whom are here with us today. Together, we in the Department of Defense and our Indian counterparts now face the challenge of sustaining and expanding upon these gains. In the past, we used to talk about how we could do more - more exercises, more high-level visits. Now, we face a task that is equally important and challenging -- creating the conditions where close US-India defense cooperation is normal, expected, and routine. Cementing a fully formed bilateral relationship requires more than formal visits and high-level dialogues-it's about day-in-day-out cooperation at all levels. Such interactions may not make as many headlines, but routine contacts are in many ways the most important bilateral business we conduct. Take, for example our bilateral exercises. U.S.-India military exercises have grown in size, scope, and sophistication since 2005. We now have regular exercises across all services. And the complexity of these exercises is increasing as both militaries become more familiar with each others' methods of operation. We also look forward to more multilateral activity with India throughout Asia in order to build patterns of cooperation among regional militaries to respond to various crises such as the 2004 Indian Ocean tsunami. A prime example of such multilateral activity has been the Malabar naval exercises that have been conducted in the past with Japan and other countries and that we hope to build on in the future.. Another growth area is our burgeoning trade in defense equipment, including the Indian purchases of C-130J and P-8I aircraft. I am and will continue to be a strong advocate of U.S. solutions for India's defense needs. U.S. companies are eager to work with India as the Indian military continues its modernization. Today, two American companies are among the leading competitors for a $10 billion sale of 126 advanced fighter aircraft to the Indian air force, currently the world's biggest defense tender. And we are also looking at future sales of the C-17 aircraft as another example of near term defense sales. I want to underscore that we in the Department of Defense do not view defense sales as mere commercial transactions. We understand that India is making a strategic as well as an economic choice when it makes defense acquisitions. Obviously, the commercial benefits of defense sales to the U.S. economy can't be denied, but from a DoD perspective, these sales are most important to building a strategic partnership that will allow both our countries to cooperate more effectively in the future. Whether the scenario involves humanitarian assistance, counterterrorism cooperation, or maritime security activities, having common equipment will allow more seamless cooperation. India is, of course, also seeking to build its own indigenous defense industry, and is looking for the best technologies to use in its defense sector. The U.S. is committed to providing India with top-of-the-line technology, and we have backed up our commitment by approving the overwhelming majority of licenses requested last year. Secretary Gates has made export control reform a key priority, and we see streamlining and modernizing our export control system as a national security issue, one that affects our ability to build effective partnerships. Going forward, we see several promising opportunities to further develop our burgeoning defense ties. We will continue to work with India on countering the spread of WMD through maritime cooperation, dialogue, and identifying new technologies to combat this threat. We will continue to build on our experience working together on disaster assistance and humanitarian relief, and develop procedures to facilitate more seamless cooperation in future contingencies. We will look at ways in which, together, we can better secure the global commons by expanding our already robust cooperation in air, space, cyberspace and maritime initiatives And to counter the scourge of piracy, we will work to translate recent joint naval exercises into real world operations. These proposed areas of cooperation highlight some of the most difficult security challenges facing both of our countries, and reinforce the need for us to work together as India builds its military capabilities. The United States also maintains a strong interest in India's emergence as a regional power in Asia. The Obama administration is committed to strengthening regional partnerships, to build an international system capable of addressing challenges that have no respect for borders. In Asia, this means it no longer makes sense to discuss this increasingly interconnected region in terms of "East Asian" security, or "South Asian" security. It also means that the security of Asia's two dominant powers can no longer be viewed as a zero sum game. A safer, more secure India that is closer to the United States should not be seen a threat to China, and vice versa. Indeed, all three countries play an important role in that region's stability. The United States recognizes and welcomes the growing cooperation between India and China on security affairs in recent years. And both India and the United observers States seek a closer relationship with China, while encouraging Beijing to be more transparent about its military capabilities and intentions. I am aware that some believe that the United States sees India-indeed, all of South Asia-through the prism of our efforts in Afghanistan and Pakistan. I am here to tell you that we see India as far more than a vital partner on these issues. It is also an indispensable partner in addressing all of the regional challenges we face. And in the coming years, I believe India will strengthen its role in the security of its region. We welcome this development because, for all of the reasons I have already mentioned, India's success is very much in America's national interest. But it is also because India has long been, and remains, a bellwether for the challenges and aspirations of a host of other nations inspired by its success. Instability triggers global nuclear war that engulfs China and Russia Morgan 6 Former member of the British Labour Party Exectutive Committee. He is a political psychologist, researcher into Chaos/Complexity Theory and lives in Brussels (John, ―"Better another Taliban Afghanistan, than a Taliban NUCLEAR Pakistan!?‖, 2006, EArticles, http://www.electricarticles.com/display.aspx?id=639) This would leave the Allied forces with few social reserves, excepting a frightened and unstable urban population in Kabul, much like what happened to the Soviets. Squeezed by facing fierce fighting in Helmund and other provinces, and, at the same time, harried by a complementary tactic of Al Qaeda-style urban terrorism in Kabul, sooner or later, a ―Saigon-style‖ evacuation of US and Allied forces could be on the cards. The net result could be the break-up and partition of Afghanistan into a northern and western area and a southern and eastern area, which would include the two key cities of Kandahar and, the capital Kabul. « Pastunistan?» The Taliban themselves, however may decide not to take on the Northern Alliance and fighting may concentrate on creating a border between the two areas, about which the two sides may reach an agreement regardless of US and Allied plans or preferences. The Taliban may claim the name Afghanistan or might opt for ―Pashtunistan‖ – a long-standing, though intermittent demand of the Pashtuns, within Afghanistan and especially along the ungovernable border regions inside Pakistan. It the Taliban could be aiming to lead a break away of the Pakistani Pashtuns to form a 30 million strong could not be ruled out that greater Pashtun state, encompassing some 18 million Pakistani Pashtuns and 12 Afghan Pashtuns. Although the Pashtuns are more closely linked to tribal and clan loyalty, there exists a strong latent embryo of a Pashtun national consciousness and the idea of an independent Pashtunistan state has been raised regularly in the past with regard to the disputed territories common to Afghanistan and Pakistan. The area was cut in two by the ―Durand Line‖, a totally artificial border between created by British Imperialism in the 19th century. It has been a question bedevilling relations between the Afghanistan and Pakistan throughout their history, and with India before Partition. It has been an untreated, festering wound which has lead to sporadic wars and border clashes between the two countries and occasional upsurges in movements for Pashtun independence. In fact, is this what lies behind the current policy of appeasement President Musharraf of Pakistan towards the Pashtun tribes in along the Frontiers and his armistice with North Waziristan last year? Is he attempting to avoid further alienating Pashtun tribes there and head–off a potential separatist movement in Pakistan, which could develop from the Taliban‘s offensive across the border in Afghanistan? Trying to subdue the frontier lands has proven costly and unpopular for Musharraf. In effect, he faces exactly the same problems as the US and Allies in Afghanistan or Iraq. Indeed, fighting Pashtun tribes has cost him double the number of troops as the US has lost in Iraq. Evidently, he could not win and has settled instead for an attempted political solution. When he agreed the policy of appeasement and virtual self- rule for North Waziristan last year, President Musharraf stated clearly that he is acting first and foremost to protect the interests of Pakistan. While there was outrageous in Kabul, his deal with what he fears most is, the « Talibanistation » of the Pashtuns is essentially an effort to firewall his country against civil war and disintegration. In his own words , the whole Pashtun people, which he warns could inflame the already fierce fundamentalist and other separatist movement across his entire country. He does not want to open the door for any backdraft from the Afghan war to engulf Pakistan. Musharraf faces the nationalist struggle in Kashmir, an insurgency in Balochistan, unrest in the Sindh, and growing terrorist bombings in the main cities. There is also a large Shiite population and clashes between Sunnis and Shias are regular. Moreover, fundamentalist support in his own Armed Forces and Intelligence Services is extremely strong. So much so that analyst consider it likely that the Army and Secret Service is protecting, not only top Taliban leaders, but Bin Laden and the Al Qaeda central leadership thought to be entrenched in the same Pakistani borderlands. For the same reasons, he has not captured or killed Bin Laden and the Al Qaeda leadership. Returning from the frontier provinces with Bin Laden‘s severed head would be a trophy that would cost him his own head in Pakistan. At best he takes the occasional risk of giving a nod and a wink to a US incursion, but even then at the peril of the chagrin of the people and his own military and secret service. The Break-Up of Pakistan? Musharraf probably hopes that by giving de facto autonomy to the Taliban and Pashtun leaders now with a virtual free hand for cross border operations into Afghanistan, he will undercut any future upsurge in support for a break-away independent Pashtunistan state or a ―Peoples‘ War‖ of the Pashtun populace as a whole, as he himself described it. However events may prove him sorely wrong. Indeed, his policy could completely backfire upon him. As the war intensifies, he has no guarantees that the current autonomy may yet burgeon into a separatist movement. Appetite comes with eating, as they say. Moreover, should the Taliban fail to re-conquer al of Afghanistan, as looks likely, but Then, the likely break up captures at least half of the country, then a Taliban Pashtun caliphate could be established which would act as a magnet to separatist Pashtuns in Pakistan. of Afghanistan along ethnic lines, could, indeed, lead the way to the break up of Pakistan, as well. Strong centrifugal forces have always bedevilled the stability and unity of Pakistan, and, in the context of the new world situation, the country could be faced with civil wars and popular fundamentalist uprisings, probably including a military-fundamentalist coup d‘état. Fundamentalism is deeply rooted in Pakistan society. The fact that in the year following 9/11, the most popular name given to male children born that year was ―Osama‖ (not a Pakistani name) is a small indication of the mood. Given the weakening base of the traditional, secular opposition parties, conditions would be ripe for a coup d‘état by the fundamentalist wing of the Army and ISI, leaning on the radicalised masses to take power. Some form of radical, military Islamic regime, where legal powers would shift to Islamic courts and forms of shira law would be likely. Although, even then, this might not take place outside of a protracted crisis of upheaval and civil war conditions, mixing fundamentalist movements with nationalist uprisings and sectarian violence between the Sunni and minority Shia populations. The nightmare that is now Iraq would take on gothic proportions across the continent. The prophesy of an arc of civil war over Lebanon, Palestine and Iraq would spread to south Asia, stretching from Pakistan to Palestine, through Afghanistan into Iraq and up to the Mediterranean coast. Undoubtedly, this would also spill over into India both with regards to the Muslim community and Kashmir. Border clashes, terrorist attacks, sectarian pogroms and insurgency would break out. A new war, and possibly nuclear war, between could not be ruled out. Atomic Al Qaeda Should Pakistan break down completely, a Taliban-style government Pakistan and India with strong Al Qaeda influence is a real possibility. Such deep chaos would, of course, open a ―Pandora's box‖ for the region and the world. With the possibility of unstable clerical and military fundamentalist elements being in control of the Pakistan nuclear arsenal, not only their use against India, but Israel becomes a possibility, as well as the acquisition of nuclear and other deadly weapons secrets by Al Qaeda. Invading Pakistan would not be an option for America. Therefore a nuclear war would now again become a real strategic possibility. This would bring a shift in the tectonic plates of global relations. It could usher in a new Cold War with China and Russia pitted against the US. What is at stake in ―the half-forgotten war‖ in Afghanistan is far greater than that in Iraq. But America‘s capacities for controlling the situation are extremely restricted. Might it be, in the end, they are also forced to accept President Musharraf's unspoken slogan of «Better another Taliban Afghanistan, than a Taliban NUCLEAR Pakistan! » Contention 3 Solvency Relaxing capital requirements solves Kaufmann Foundation for Entrepreneurship 10 [―2010 State of Entrepreneurship Address‖, January 19 2010, http://www.kauffman.org/uploadedfiles/state_of_entrepreneurship_2010.pdf] First, let‘s rationalize our immigration system. Over the last decade and a half, fully one-quarter of all technology firms founded in the United States were started by immigrants. Factor in first-generation Americans—the children of immigrants—and the percentage rises. Reggie Aggarwal, founder and CEO of Cvent, has created some 500 jobs in the Washington area. Reggie is here today and will share his perspective during our panel discussion. Our immigration policy needs to be friendlier to people like Reggie and his parents. We could start by offering instant citizenship to any of the thousands of bright young people from foreign countries who graduate from our universities. We also should change the provisions of the EB-5 visa, the so- called ―entrepreneur‘s visa.‖ Rather than requiring prospective immigrants to bring cash into the country—the current rule requires $1,000,000 (or $500,000 if the company is in a distressed area)—we should favor those who plan to come and start companies, and extend their visas once they begin hiring American residents. Countries such as Singapore already allow in new immigrant entrepreneurs who bring in far less, $50,000, than we require. The United States simply cannot afford to lose the emerging global race for entrepreneurial talent. Plan net-decreases immigration risk for entrepreneurs K9 Ventures 10 [K9 Ventures is a a fund focused on concept-stage (sub $100k) and seed-stage (sub $1M) technology startups in the San Francisco Bay Area , ―The truth about the Startup Visa‖, March 2010, http://www.k9ventures.com/2010/03/startup-visa- truth/] Pascal argues that the Startup Visa increases, rather than decreases the risk for entrepreneurs. I don‘t see how this is the case. I came to the US on a student visa, and decided to stay to start a company (for the full story, see my previous post on My Story and Support for the Founders Visa). I had nine months of practical training left to get the company going. If it succeeded, I still needed to cross the hurdle of getting a visa. In the case of the Startup Visa you get two years to start, with extensions thereafter. If you fail, there is nothing preventing you from getting a new Startup Visa — provided you can find sources for funding for your next idea. Or, if you want to get a job you can apply for a visa for that too. The Startup Visa doesn‘t change the risks for an entrepreneur. I chose to start my company in the US because I felt that it was the right place to do it — it was my choice. Having made that choice, the Startup Visa makes it easier for an entrepreneur like me to come to the US, or to stay in the US, as the case may be. We control the economy internal link—entrepreneurs thrive during a recession Wadhwa 08 [Vivek Wadhwa, ―Startups: The Upside of a Downturn‖, BusinessWeek, 11-7-2008, http://www.businessweek.com/smallbiz/content/nov2008/sb2008117_695019.htm] In early October, Sequoia Capital summoned executives at its portfolio companies for an urgent meeting to discuss survival in the economic downturn. The presentation at the meeting, titled "R.I.P: Good Times," quickly made its way onto the Internet, adding to fear in the startup community in Silicon Valley and beyond. Sequoia, after all, is one of the most respected venture capital firms in the country, an early backer of Google (GOOG) and several other huge technology successes. One takeaway from Sequoia's presentation was clear: With the economy souring, now is a bad time to launch a venture or to expand an existing business. Or is it? The founders of Johnson & Johnson (JNJ), Caterpillar (CAT), McDonald's (MCD), and Walt Disney (DIS) might not agree. All of those companies were founded during an economic downturn. So were Adobe (ADBE), Intel (INTU), and Compaq (HP). Bill Gates didn't let a recessionary environment stop him from launching Microsoft (MSFT). Chuck Schwab founded his discount brokerage during the recession of 1974. And in 1982, U.S. unemployment was soaring to the highest levels in decades; that didn't stop Scott McNeely and Vinod Khosla from launching Sun Microsystems (JAVA). In fact, 18 of the 30 current Dow Jones industrial index companies were launched during economic downturns, according to research by Reference Capital Management, a venture capital fund based in Tigard, Ore. I, myself, have been through the startup process twice, in both economic ups and downs. My first company, Seer Technologies, was conceived at New York investment bank Credit Suisse First Boston (CS) after the market crash of 1987. The bank soon needed to divest key technologies. Despite the gloomy economic market, by 1989 we had raised the capital needed. And with almost no competition in sight, we grew the startup to a public company with $120 million in revenue in 1995. I started working on my second startup, Relativity Technologies, in late 1996, before the dot-com boom. We built the products, understood our markets, and recruited a solid executive team. The result? By 1998, we had venture capitalists tripping over each other to give us money, and I was able to raise about $10 million over two years to expand a successful startup. My advice for other tech entrepreneurs thinking of launching right now? Don't wait. A recession is your ally in building a lean, thriving company. Consider the following four advantages. Less competition. An economic downturn clears the competitive landscape for startups. Most of the "me-too" companies with inferior products and weak business models go out of business, and fewer are started. Plus, it becomes a lot easier to do licensing deals with universities and business partners—no one else is. Lower costs. It is a buyer's market, and you can negotiate deals on real estate, equipment, and materials like never before. Salaries are lower for new hires, and there is little pressure to give big salary increases to existing staff. Easier to recruit and keep employees. You will readily find people who have been laid off and are eager to get back to work. They will accept lower salaries in return for stock and take the risk of joining a startup. And rather than focusing on getting a job with a competitor who pays a little more money, employees are usually content to build tenure and focus on your success. Less pressure to expand. Rather than rushing to expand your business, you have the luxury of doing it right. You can conceive of better products, test them carefully to make sure they work and meet customer needs, and experiment with different business models. Since you are not in a frantic rush to get a product out or build market share, you can do things more methodically. True, it is harder to raise venture or angel capital in bad economic times, but such funding is not the main source of capital for most startups anyway. Research that my group at Duke University is conducting in partnership with the Kauffman Foundation shows the majority of first-time entrepreneurs fund their startups from personal savings and borrow from friends and family. So you are going to be getting money from the same sources whether it is now or during a booming economy. The big difference is that you have a chance to build your company the right way if you start now—and you have better odds of perhaps being listed on the Dow Jones one day. Our specific visa revisions solve Dallas Business Journal 10 [―Create Jobs, get a green card‖, 5-7-2010] Andres Ruzo came to America in 1980 to pursue a degree in engineering from Texas A&M University. He calls himself a Peruvian by birth and a Texan by choice. He founded his fast-growing company, Rowlett-based LinkAmerica, in 1994. But getting to that point wasn‘t easy. ―I know how difficult it is to be an immigrant who wants to start something here,‖ Ruzo said. ―I tried to get my H-1B Visa, which required me to work for five years, and then going from there, I needed another five years to become a resident, so it took 10 years." With $40.7 million in annual revenue, LinkAmerica ranked No. 13 on the Dallas Business Journal‘s 2010 list of North Texas minority-owned businesses. New legislation coming out of Washington could provide a shortcut for foreign-born entrepreneurs. Ruzo says the proposed changes will create U.S. jobs, bring money to North Texas and open up a bridge for foreigners to invest in America. Introduced by U.S. Sens. John Kerry, D-Mass., and Richard Lugar, R-Ind., the law would allow immigrant entrepreneurs to secure visas if their startup can raise $1 million in investment, or generate $1 million in revenue, and create five full-time jobs within two years. Called the Startup Visa Act of 2010, the legislation requires the entrepreneur to initially raise $250,000, of which $100,000 must come from a qualified U.S. angel or venture investor. The Startup Visa Act has enjoyed bipartisan support, despite a nationwide immigration dispute, as well as the backing of 160 venture capitalists from across the country. ―Global competition for talent and investment grows more intense daily, and the United States must step up or be left behind,‖ Kerry said in a statement. Lost opportunities The Startup Visa Act would create a new type of two-year visa called an EB-6. It‘s a hybrid of existing visas, the H-1B, a temporary visa for immigrants working in high-tech or other specialized fields, and the E-B5, also known as the investor‘s visa, which provides a method of obtaining permanent residence for foreign nationals who invest at least $1 million and create at least 10 jobs in the United States. Supporters say the startup visa would create jobs and increase America‘s global competitiveness, rather than helping immigrants compete for existing ones, which is what many argue H-1B does. The new visa will also ease the threshold demanded by the E-B5, which attracts the wealthiest investors and not necessarily the most entrepreneurial. Edwin Rivas, an economics senior at Southern Methodist University and an international student from El Salvador, will graduate this month and has come up with a fat list of business ideas he wants to pursue. But current visa options were either too expensive or too restrictive, Rivas said. So he has decided to take his business ideas to El Salvador, even as he admits the business climate there is less favorable. ―The startup visa is exactly what I have been hoping for, but it‘s too late for me,‖ he said. ―I wish it passed while I was still in school.‖ Nezar Chafni, an SMU finance senior from the United Arab Emirates who will also graduate this month, secured an American job through the H-1B visa. Instead, Chafni plans to go back to his native country to launch a software company he founded here. ―If I get something like the startup visa, I would move the company back here,‖ he said. ―I already have people who are investing in my company.‖ Thus the plan: The United States Federal Government should amend the provisions of the EB-5 visa class for immigrant investors and immigrant entrepreneurs to lower the initial capital investment requirement to $250,000 and allow for domestic superangel investor sponsorship.