Knowledge at Wharton says:
In 1980, immigrant entrepreneur Vivek Wadhwa came to the United States and stayed, starting two companies that created more than a thousand American jobs. Now an academic, Wadhwa sees first hand that today's immigrants are not following his lead. Every year he asks foreign students in his classes at Duke University how many intend to stay permanently in the United States. "It used to be that everyone raised their hand," Wadhwa says. "Now they look at you funny. They say, 'What does that mean?'"
For a majority of highly skilled immigrants who want to start companies, the promised land is no longer the United States, writes Wadhwa and four co-authors in a recent report from the Kauffman Foundation, a Kansas City, Mo.-based non-profit that supports research on entrepreneurship. In "The Grass Is Indeed Greener in India and China for Returnee Entrepreneurs," the researchers surveyed 153 professionals who returned from the U.S. to India or China to start a business. They found that 72% of Indians and 81% of Chinese said the opportunities to start a company in their home countries "were better or much better" than in the United States.
Some say the flow of immigrants back home is a "brain drain" for the U.S. that calls for an immigration policy overhaul. Sending would-be entrepreneurs packing robs the United States of new companies, new jobs and long-term economic growth, they argue. Others say the pull is as strong as the push: that as economies blossom in China and India, the opportunities sprouting on native turf are simply too tempting to resist. Some experts maintain that returning immigrants don't actually spell a net loss for the United States anyway. They see the flow as more of a "brain circulation" that benefits economies on both sides of the sea.
Wadhwa, a senior research associate at Harvard Law School and director of research at Duke's Center for Entrepreneurship and Research Commercialization, falls on the "brain drain" end of the spectrum. "It's not a brain drain; it's a brain hemorrhage," he insists.