A Free Flow of Goods and Services – and Founders

Jonathan Ortmans

Holding an American and British passport, I enjoy the freedom to move easily among economies which is important given that I am now involved in advancing entrepreneurship in 140 countries.  As APEC gets ready to complete the rollout of its APEC travel card and other regions outside the European Community develop single visa plans, I wonder how easy it is for current and aspiring entrepreneurs and investors to get around.  Is it indeed getting better?

 The European Union has long had in place a single visa policy in the so-called Schengen Area, even waiving passport and immigration checks at their common borders.

Asia-Pacific Economic Cooperation (APEC) member countries have been issuing a three-year Travel Card to business travellers from APEC participating economies since 1997. The APEC Business Traveler Card (ABTC) eliminates the need for its pre-cleared holders to apply separately for individual visas when visiting member economies.

Only two member countries are transitional participants since the APEC program created this category in 2007, the United States and Canada. Both have so far been rolling out programs to offer APEC cardholders fast-track lanes at airports upon arrival as well as expedited visa appointments. This transitional status allows them to issue APEC cards to their own citizens without having to grant visa-free travel status to nationals of other APEC members. Even so, progress has been slow. Only in October 2013, during the latest APEC conference in Indonesia, did Canada announce a pilot project  to introduce the APEC Business Travel Card domestically. The United States also recently passed legislation authorizing issuing the APEC Business Travel Card (ABTC) to eligible U.S. citizens but Customs and Border Protection (CBP) is still exploring avenues to accept applications and issue the visas.

Although far from an immigration policy specifically for startup entrepreneurs, this announcement is no small boon for entrepreneurship ecosystems. Entrepreneurs seeking to grow their businesses can gain access to economies such as China, Hong Kong, Japan, South Korea, Australia, Chile and Peru in a much less time-consuming way. APEC accounts for 41 percent of the world's population, 54 percent of global GDP and 44 per cent of international trade. Now consider the fact that the International Monetary Fund expects the region to grow at a pace that doubles the global rate in 2013 and 2014. The card program has proven especially useful for Australians where businesses have aggressively reached out to Asia Pacific markets over the past two decades. Meanwhile, APEC itself reports the impact from this program in terms of time savings in immigration queues at 62,413 hours per year and in terms of transaction cost savings at US$3.7 million.

Earlier this year in another part of the world, the Gulf Cooperation Council made a similar move when its top business body referred to interior ministers a study on introducing a unified visa system for the GCC six-nation bloc.

“The introduction of the visa will yield impressive benefits for the Gulf economy and will boost the income of their citizens, while preserving the sovereignty of each state,” said the Secretary General of the GCC Chambers of Commerce and Industry, Abdul Rahim Hassan Naqi.

The United Arab Emirates, Oman and Qatar already have a common visa system in place, and that experience shows the idea could work for the GCC at large.

Due to technology and the culture of today’s entrepreneurs, startup communities are becoming flat and entrepreneurs and investors want freedom of movement regardless of their place of residence. More policymakers are starting to understand this as they seek to attract the best new firm founders who invariably bring little patience for unnecessary bureaucracy.

For example, entrepreneurs in Berlin’s vibrant entrepreneurial scene often cite Germany’s relatively relaxed visa-application process as a competitive edge in attracting international talent. Christophe Maire, an investor in Berlin-based companies, told Bloomberg that international workers help bring new perspectives to the tech companies and create an environment that is attractive to other immigrants. Chile has a similar perspective with the motto of its temporary immigration-based Start-Up Chile program being: “They arrive. They work. They connect. They leave—and Chile stays connected.”

Such attitude is also common in Silicon Valley where entrepreneurs and investors appreciate the impact of immigration processes on the entrepreneurship ecosystem. This is why venture capital firms and companies of various sizes like Oracle, Facebook and Dropbox hope to sway the outcome of legislation currently before Congress. Such a bill addresses various immigrant forms in one sweeping reform package, including the issue of illegal immigration. Facebook founder and CEO Mark Zuckerberg made a special trip to Capitol Hill for this purpose in September (see his Washington Post editorial prior to his visit).

With the broken U.S. immigration system turning away highly-skilled workers at America's doorstep other entrepreneurship ecosystems in China, India, Europe and beyond have seen the benefits of foreign-“marinated” talent returning home to start companies. Research from researcher and immigration expert Vivek Wadhwa and his team shows that the number of immigrant-founded tech companies in the U.S. has declined as much as 8.5 percent in some areas since 2005, including Silicon Valley. For other economies, an immigration policy that lures entrepreneurs is a “low-hanging fruit” growth booster.

In late October, for example, Canada’s Citizenship and Immigration Minister Chris Alexander announced that the Start-Up Visa (SUV) program it launched six months ago will now include a new ‘business incubator stream’ to attract more overseas entrepreneurs to Canada. Unlike existing angel investor and venture capital streams, this new track will not require a financial investment but rather admission into an approved Canadian business incubator program. This new strategy will immediately seek to partner Canada's business incubators with immigrant entrepreneurs who can contribute to a culture of innovation and commercialization while broadening networks. Overall, the SUV program is a five-year trial that will offer up to 2,750 visas per year.

Australia launched the Significant Investor Visa (SIV) program in late 2012, which targets high net worth individuals seeking permanent residency rights in the country. Its ultimate goal is to provide a new source of capital to local technology startups. The Australian government received more than 300 formal applications nine months into the program’s life, representing AUD $1.5 billion in startup investment money. The UK and New Zealand also have similar schemes.

Meanwhile, some policymakers in the United States are seeking to address its inadequate high-skilled immigration scheme as a problem separate from the need for a broader, system-wide immigration reform. Earlier this year, a bipartisan team re-introduced the Startup Act to Congress—now in its 3.0 version that aims to ease the pain of acquiring a visa for those interested in starting a company on American soil and to grant green cards to students with a master's degree or a PhD in science, technology, engineering, or mathematics (STEM fields). According to estimates by the Kaufman Foundation, if the startup visa proposed in this bill goes through, it could help create 1.6 million jobs in the U.S. over the next 10 years.

There is still however an imbalance between the economic value that entrepreneurial immigrants contribute and the visas available for them worldwide, even if it is getting narrower. Entrepreneurs are flattening the world but to launch and scale, the world needs to afford them the same freedom of movement we give goods and services. 

I find it surprising no one is looking at the big picture here but rather viewing this still as a national “immigration issue” about who to let in and who to keep out.  While there is a difference between visiting and staying the question we should be asking is:  How do we all create an environment where our most ambitious citizens can move freely among our economies and communities to form teams, develop innovative ideas, find funding and assemble the right talent? With entrepreneurs disrupting markets faster than ever before, my money is on the economies with a big welcome mat and a fast track entry lane!

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