Hoover Daily Report

Immigration Reform Critical for Tech Innovation

via Wall Street Journal
Thursday, January 17, 2013

Partisanship may be a problem on Capitol Hill but there was a surprising amount of common ground between a Republican and a Democrat in a debate, Tuesday, at the CIO Network conference in San Diego. Professor Lee Ohanian, a senior fellow at the conservative Hoover Institution, discussed technology policy and innovation with Robert Reich, former U.S. Secretary of Labor during the Clinton Administration.

The pair said the government should support basic research, avoid politicizing innovation policy, modernize the patent system and reform immigration by expanding the number of visas for foreign workers who specialize in technology. The discussion was moderated by David Wessel, economics editor at The Wall Street Journal.

“The National Science Foundation, in my view, is probably the most successful in terms of bang for the buck and for being the least politicized,” said Mr. Ohanian. “I don’t think we’re spending enough money on innovation policy,” he added, saying that the government spends only $6 billion per year on National Science Foundation funding but $26 billion on agriculture price supports.

Both Mr. Ohanian and Mr. Reich said that the government’s role should be to support basic research. “Basic R&D is critical,” said Mr. Reich, noting that the National Institutes of Health had done a good job in this area. Yet, he emphasized the importance of separating basic from applied research and development. “To the extent that companies are going to appropriate benefits from the R&D, then the government really doesn’t have a role to play,” he said.

The two men shared concerns about whether the U.S. patent system actually encourages innovation. Mr. Ohanian suggested that patents may be “creating intellectual monopolies that are damaging to society,” saying that innovation in an industry typically increases dramatically after a patent expires. Mr. Reich said it was important to make sure that patent protections don’t enable “big companies to use intellectual property in a predatory way against startups.”

The issue where the pair was most closely aligned, though, was the need to establish immigration reform and expand the number of so-called H-1B visas which let U.S. employers temporarily hire foreign workers in specialty occupations like software development or engineering. “We are shooting ourselves in the foot with our immigration policy. The current H-1B visa program is not in our best interest,” said Mr. Ohanian. He noted that nearly 50% of technology startups in California are built by immigrants and “most of them come from India and China.” Mr. Reich also suggested that the U.S. expand the opportunity for graduate students with degrees in competitive fields such as computer science to become citizens.