America Risks Losing its Tech Edge

A Perfect Storm is Coming for American Innovation

The Covid 19 pandemic could be the end of America’s technological and economic prowess. Historically, America has been the country that the worlds best and brightest have chosen to study and immigrate to. From Einstein to Elon Musk, immigrants and their direct descendants have been a vital source of economic productivity and an all too important source of technological innovation. But a perfect storm of ideological politics, coupled with a global pandemic, may have brought this era to a permanent end.

Immigrants Are Vital

The United States was and is a nation of immigrants. But few understand just how vital the immigrant community has been to American prosperity. The steady influx of immigrants, who tend to skew younger, has provided an important source of labor, helping counteract the demographic crisis that have plagued other major economies, such as Japan.

Far from just a source of new labor, a great number of businesses are started by immigrants as well.  A staggering 45% of Fortune 500 companies were started by immigrants or their children. Together, these companies brought in $6.1 trillion of revenue in 2018 alone. Immigrants have founded 20% of all American businesses overall.

Aside from that, immigrants lead the American innovation engine. In STEM fields (Science, Technology, Engineering, and Mathematics), non-Americans account for over half of masters degrees and 44 percent of doctorate degrees issued by American universities. Many of these degree recipients choose to stay in the US after they graduate and work for American companies, helping keep American companies on the bleeding edge of technology.

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Enter Covid-19

There is no doubt that Covid-19 has curtailed travel and migration the world over, but the United States has been especially acute in its mishandling of the global pandemic. America’s failure to even provide a semblance of competence in handling the pandemic has deterred many students from studying in the US this year, with new international enrollments down 43%.

This isn’t likely to be a temporary blip either. As the world has watched watched maskless Americans attack retail workers, endure summer riots, and its politicians talk openly about a coup, it is possible that America’s reputation as the leader of the world is forever damaged.

Funding is also becoming a problem. Much of the America’s greatest innovations owe their existence to the interplay of university talent, government grants, and a culture of entrepreneurship. But as the Great Recession crushed government budgets across the United States, funding for public universities was curtailed and never fully recovered. Universities were instead saved by a huge influx of foreign students, particularly from China, who pay a premium to study in the United States. These budgets again are getting crushed by the pandemic’s economic fallout, but international students wont be here to save the day this time.

Bad Policy

The Covid -19 crisis, however, is just exacerbating a trend that began at the beginning of the Trump administration. Xenophobic rhetoric, combined with tightened visa restrictions, travel bans, and other wildly unpredictably immigration policies in the name of “America First” have been deterring foreign students and potential immigrants from coming to the US for years. Prior to Covid-19, the number of students choosing to study in the US was already stagnating after years of growth, placing budget constraints on universities and hampering research before the pandemic began.

Will This Turn Around?

There is some hope, if only a little. It is likely that a Biden Presidency will overturn and undo much of Trump’s immigration and visa restrictions, but the Trump policy mess will take months to unravel and unwind. Even then, it make take years for the scars of the Trump presidency and Covid-19 to mend, if they ever do.

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