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The “Secret Sauce” in ...

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The United States houses roughly 5 percent of the world’s population.

It stands to reason that many ideas for recasting technology to improve our daily lives and business operations will come from those born outside the U.S.

That’s why the hoopla around President Trump’s immigration policy is so threatening to Silicon Valley. I’m surprised his advisors haven’t helped him connect the dots in a way that even a short attention span should be able to grasp: a) Immigrants are a key driver behind a large percent of the tech successes that come out of Silicon Valley  b) the tech sector essentially serves as the growth engine behind the U.S. economy  c) A healthy economy generates jobs.

A leads to B leads to C.

Perhaps if his advisors were to package this information as the “ABCs of a progressive economy,” it might resonate.

Joint Venture Silicon Valley takes an annual look at Silicon Valley, packaging the data and insights in a hefty report that would make Tolstoy proud (I know, bad example). Consider the following charts to better understand Silicon Valley and what’s at stake.

The venture capital that showers Silicon Valley and San Francisco constituted 42 percent of the total amount of U.S. venture capital in 2015 (2016 number still come).

Silicon Valley venture capital investment chart

Of course, startups are key to the cycle of innovation, but there’s a bigger picture in play. This pipeline between venture capital and Silicon Valley has been flowing for 20+ years delivering what has become some of the most valuable companies in the world who —  what a surprise — hire lots of people.

Now comes the punch line —

Over one third of Silicon Valley residents was born overseas.

 

foreign born population chart

Think about this for a moment. When you stop at a Starbucks in Sunnyvale, and 30 folks are hogging the tables and gulping the Wi-Fi, the numbers say that 10 of them will be immigrants.

Equally revealing, going back to 2011, roughly 10,000 foreign talents have been landing in Silicon Valley each year.

Silicon Valley net migration flows chart

Immigrants are the secret sauce of Silicon Valley.

Who could have predicted what Adam Gopnik in the New Yorker described as “the special cocktail of oafish incompetence and radical anti-Americanism that President Trump’s Administration has brought.”

To bully a company here, a company there, to keep plants in the U.S. misses the big picture.

Unlike areas that focus on traditional manufacturing jobs, Silicon Valley is not a zero-sum game. That’s why the brightest and the brave from around the world head here. In fact, I would argue that nothing is more American than non-Americans pursuing the American dream. This dynamic helps all of us.

It’s a beautiful alchemy.

Cut off immigrants and you forever change Silicon Valley.

And not for the better.

Side note: Of course, it’s not just Silicon Valley that benefits from immigrants. I listened to an NPR story over the weekend that explained one in four doctors in the U.S. is an immigrant. I had no idea that the government offers a J1 visa that enables a foreign-born doctor to work for three years in an area where there’s a shortage of medical help. In short, without immigrant doctors, many rural areas in the U.S. would have little or not medical coverage.


Comments

  • David Vossbrink

    Lou — good post, and one I have shared widely. However, I recommend that you replace the airport photo at the top of your post with one that shows Silicon Valley’s Airport, SJC: http://staticapp.icpsc.com/icp/loadimage.php/mogile/329927/3dc7cd08568d70aeb177aac4596360f2/image/jpeg

    Reply
    • Lou Hoffman

      Thanks for weighing in David. While I admire your pluck in positioning the SJC airport as the entry point to Silicon Valley, I suspect that the vast majority of immigrants arrive in Silicon Valley (defined broadly to include the Greater Bay Area) via SFO. Still, I’ve asked one of graphic designers to take a look at reshaping the hero image for the post to include the SJ airport. As you may or may not know, we’re based in downtown San Jose (two storefronts down from Original Joe’s). We should compare notes sometime over a cup of coffee at SOFA or Social Policy.

      Reply

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