Achieve your IAS dreams with The Core IAS – Your Gateway to Success in Civil Services

(Source – The Hindu, International Edition – Page No. – 6)

Topic : GS 2: Effect of policies and politics of developed and developing countries on India’s interests

Context

  • Need for Change: India must adopt new paradigms for innovation and job creation, moving away from counterproductive approaches.

Introduction

  • Role of Skilled Immigrants: In places like Silicon Valley and Boston, skilled immigrants are not just filling jobs; they are creating startups and driving innovation.
  • Misconception about H-1B Visas: The belief that restricting skilled immigration will create more jobs for native workers is flawed.

Impact on Jobs

  • Research Findings:
  • Companies don’t hire more U.S. workers when H-1B restrictions increase; they hire more foreign workers.
  • A 1% decrease in H-1B supply could lead to a 10-20% drop in foreign affiliate growth.
  • For every 10 H-1B positions denied, U.S. firms hire 8 foreign workers abroad.

Impact of H-1B Visa Holders on U.S. Jobs

  • Job Creation: Each H-1B visa holder creates 1.83 additional jobs for native workers over seven years.
  • Immigrant Entrepreneurs: Immigrant-founded companies attract more investment and create jobs at higher rates than those founded by natives.
  • Wage Impact: Hiring foreign STEM workers can lead to wage increases for native workers due to productivity gains.

H-1B Workers and Wages for U.S. Workers

  • Wage Comparison: In 2021, the median wage for H-1B workers was over double that of the general U.S. workforce.
  • Wage Growth: H-1B wages rose by 52% from 2003 to 2021, compared to 39% for all U.S. workers.
  • Positive Effects on Wages: High-skilled immigration can lead to wage increases for native workers.

Impact of Foreign STEM Workers on Native Wages and Innovation

  • Wage and Innovation Correlation: A 10% increase in foreign STEM workers can raise native wages by 0.5% to 0.6% and increase patents per capita.
  • Concentration in Innovation Hubs: Areas like Silicon Valley thrive on the contributions of H-1B workers, making it a global innovation center.

‘Brain Circulation’: India’s Experience

  • H-1B Visa Statistics: Indians receive about 70% of H-1B visas annually.
  • Positive Impact on India: Skills gained abroad contribute significantly to India’s tech sector and innovation ecosystem.
  • Global Competition: Canada’s success in attracting tech talent highlights the risks of U.S. immigration restrictions.

The Need for Nuanced Immigration Policies

  • Flexible Policies Required: Immigration policies should be nuanced and adaptable to market demands.
  • Visa Caps: Current fixed caps limit growth; they should be adjusted to reflect the actual needs of the market.

Fast-Track Processing and Pathways for Entrepreneurs

  • Importance of Skilled Immigration:
  • Implement fast-track processing for critical skills.
  • Create pathways for entrepreneurs and STEM graduates to transition to permanent residency.
  • Labour Market Modernization: Introduce transparent wage determinations and real-time analytics to match skills with opportunities.

A Talent Flywheel

  • India’s Role: India should aim to be a dynamic participant in global innovation, not just a talent exporter.
  • Knowledge Flow: Outward mobility should facilitate inward flows of knowledge and capital.

Three Pillars of Transformation

  1. Creating Magnetic Poles of Innovation: Develop specialized innovation clusters with global standards and incentives.
  2. Setting New Paradigms: Shift from catching up to creating new global standards, exemplified by initiatives like IndiaStack and UPI.
  3. Cultivating an Innovation Ecosystem: Support risk-taking and experimentation, potentially through a startup visa program.

Conclusion

  • Balancing Short and Long-term Goals: Focus on streamlined processes and long-term systems for automated talent mobility and research collaboration.
  • Talent Mobility Principle: Remember that talent mobility is not a zero-sum game; it benefits everyone involved.

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