The U.S. government should give emerging companies a break on regulation and change its immigration laws to encourage well-educated newcomers to stay, panelists said at a conference Thursday.
The annual TechNet Innovation Summit in Berkeley, California, kicked off with a discussion of U.S. innovation policy that quickly focused in on how the country can remain competitive as developing countries generate more engineers and ideas. The panelists were not just corporate bystanders: Laura Tyson, a professor at UC Berkeley's Haas School of Business, was chairman of former President Bill Clinton's Council of Economic Advisors. Sybase Inc. executive John Chen and Cisco Systems Inc. chief John Chambers both have served on advisory panels in the Bush administration, and Chambers is a top advisor and leader in Senator John McCain's Republican presidential campaign.
While the U.S. still leads in innovation, it has about five years to tune up its engine before emerging countries such as China and India catch up, said Chen, who is chairman, CEO and president of Sybase.
"Our immigration policy today makes no sense," Chen said. The U.S. attracts the best students in the world to its universities but then makes it hard for them to stay, he said. Tyson and Cisco Chairman and CEO Chambers agreed.
Chen, a Hong Kong native, said he came to the U.S. to study electrical engineering and stayed to pursue a career partly because there were few opportunities in Asia at the time. Now graduating students like him are forced to compete for a limited number of H1-B visas, even as they are lured by abundant opportunities in their home countries, Chen said.
"Our immigration policy is not serving our innovation agenda," Tyson said. While foreign graduate students face barriers, a large percentage of immigrants to the U.S. lack even a high school diploma, she said. Tyson called on the government to study immigration laws in the U.K., Canada and Australia that reward education and use point systems to determine an immigrant's qualifications.
Meanwhile, complex U.S. tax laws and regulations are leading many new companies to make their initial public offerings in Hong Kong or London, Chen said. The U.S. is ranked at the top of the world as a place to start a company, because of an entrepreneurial culture and relatively limited regulation for startups, according to Tyson, but the burden is shifted to larger corporations. One result has been the recent wave of public companies going private. Palm Inc. and Avaya Inc. have been acquired by private investment companies this year.
It costs Cisco US$30 million per year just to comply with the Sarbanes-Oxley financial controls and disclosure law, Chambers said. Cisco can afford this, but smaller companies shouldn't be burdened with it, he said.
"We've got to have 'Sarbanes-Oxley Lite' that makes it easier for small businesses to not only list on our exchanges but to be successful in the U.S.," Chambers said.