Reuters World News - Part 2: What comes next for Big Tech?

Episode Date: October 1, 2023

The second episode in our two-part weekend series digs into how immigration policy affects the talent race. Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit megaphone.fm/adchoices to opt out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

I'm at Eagle Pass, just arrived. When Tesla CEO Elon Musk visited the southern border this week, wearing a big black cowboy hat, some onlookers might have wondered why. I am as an immigrant to the United States. I'm extremely pro-immigrant, and I believe that we need a greatly expanded legal immigration system. But immigration is not just important to this tech billionaire. It's crucial to the entire industry, especially at a time when attracting the right talent, could make or break companies.

For part two of our weekend look into the tech industry on Google's 25th anniversary, we are focusing on immigration's role in shaping Silicon Valley. I'm Christopher Waljasper in Chicago. And I'm Stephen Nellis in San Francisco. Our tech reporter in San Francisco, Stephen Nellis, joins us again today. Stephen, what role do immigrants play in Silicon Valley?

The simplest way to say this is that Silicon Valley, as we know it would not exist without immigration. And that's not a new thing at all. Andy Grove, one of the longtime co-founders of Intel, which was one of the founding companies of Silicon Valley, himself was a Hungarian immigrant who fled Hungary after World War II. So immigration has long been a big part of the Silicon Valley story. And well, I know there's a lot of skepticism in the United States right now about this notion of the United States as a, a city on a hill where people around the world set their sites to make a better life, that's still very true in Silicon Valley. It is seen as the place where people come from around

the world to get together and create whatever comes next. And so it wouldn't function without it. I think you can also just see that in the executive ranks. Look at the CEOs of Google and Microsoft, both born in India. And if I had to go down a list of companies that are important in Silicon Valley, but maybe not known to consumers, there would just simply be too many to name. And one of the most interesting things about Silicon Valley is that because of some of the wrinkles of how the immigration system works

with regard to visas and getting a green card, we'd actually probably see far more companies founded by immigrants if the system worked a little differently. How has immigration changed innovation and technology in Silicon Valley? So the thing to understand about tech immigration is there's really kind of two flavors of it. One flavor of it is folks who are going to come here and be on the path to eventually get a green card, which is what you need to have permanent residency in the United States, and also largely what you need to have to found your own company. And then

there's another path, and this is the one that people don't like to talk about as much, where people are basically brought in to fill positions at lower cost than it would cost to get comparable folks who are to here in the United States. So let's go back, though, to that first path. You come here and your employer has to sponsor your immigration status. So what that essentially does is kind of ties people to employers for a long time. And it's very difficult to actually start your own company until you've got that permanent residency card. And the fundamental reason for that is that all startups on paper sort of look slightly ridiculous, unstable, et cetera. So immigration authorities are reluctant for valid reasons of fearing that there would be fraud and

abuse to grant visas and to process visa applications for these small companies. So one of the interesting things you see over and over again in Silicon Valley is someone will come here. They will work for a large company potentially for years and years, especially if they're from India, China, because of some of the kinks in the immigration system. And as soon as they get that green card, they will walk out the door and start up their own company. But it doesn't happen until then. And that can be seven, 10, even 15 years, particularly for folks from those two countries. And how does that compare to the second type of tech immigration you mentioned? So we just talked about the gauzy sort of shiny view of tech immigration is, you know, the wellspring of knowledge and

creativity that keeps Silicon Valley at the forefront of technology in the United States at the forefront of global economies. That's the part that gets talking about by folks like Mark Zuckerberg or other tech executives when they go in front of Congress. The part that doesn't get talked about as much is sort of grinding out code and other, I don't want to describe it as low-level work because it's still skilled work, right? But it's essentially we've decided how this needs to happen and now we just need people to go in and do the work. And the other side is contracting companies who essentially bring in folks by the thousands on these temporary visas to do that work at low cost. And these contract firms are used by quite some big names that you

had to recognize. And there's a lot of grumbling about that, especially among opponents of this form of immigration, and also even a lot of, you know, U.S.-born, IT folks and computer science folks who say, hey, this work could just be done as easily, but at slightly higher cost by non-immigrants, and this is just a ploy to lower your labor costs overall. So how then are these tech companies weighing in on the immigration policy conversation? They do so at multiple levels. I think number one is they just want more visas for high-skilled labor. That's the number one thing that gets love from both Republicans and Democrats politically. Both say that they want to do it. But the bigger issue is that they both want to pair it with broader immigration reform, which

is something that there's not very much agreement on. At the more granular level, one of the biggest problems that tech companies have is that the visas that you need for this kind of work are allotted on a global basis in their by country. And countries have caps. So large countries like India or China get a certain number of slots. And small countries like Iceland get a certain number of slots as well. Well, when you think about everything we know about technology, education, et cetera. There are a lot more people who are qualified for these jobs from India and China in particular. There are other countries that fit into this, but those are the two big ones, then there are slots for green cards. And so one of the things that they've also worked at on the

granular level is saying, hey, could we reallot this to actually match, you know, the demand from employers and the supply of educated people who want to come work here instead of this antiquated system that sort of just has almost arbitrary numbers of green cards assigned to each country regardless of its size, or it's important in either demand or supply for this high-skilled labor. That's it for this special weekend edition. We'll be back with our regular daily show tomorrow. To make sure you know what's going on in the world, listen in for 10 minutes every weekday. And don't forget to subscribe on your favorite podcast player or download the Reuters app.