Dispatches is all about the global mobility of talent, and America has a huge advantage when it comes to being a magnet for highly skilled internationals.
Make that had a huge advantage.
Immigrants from around the world have fueled the U.S. tech boom since 1957 when Andy Grove arrived in New York City as a refugee from some Hungarian shtetl.
All of that is ending as the Trump Administration fulfills its “America First” campaign promises and vows to cut immigration.
In just the past few months, President Trump has instituted travel bans aimed at majority Muslim countries, started tightening H-1B visa requirements for skilled foreign workers and restricted visas for international executives.
It’s more than just immigration legislation: There’s an ugly undercurrent of isolationism, anti-immigrant sentiment, and xenophobia that hasn’t surfaced in the U.S. for a hundred years.
But as they say, the circumstances that drive us crazy usually conceal a huge opportunity. America is blowing it; Europe can step up and capture the talent Trump is throwing away.
Just for fun, I drew up a list of all the foreign-born or 1st generation Americans who helped the United State achieve its stunning domination of the digital economy. Just the management and tech geniuses from India would fill up a phonebook-sized data base. (For those born after 1995, a phonebook was an actual physical book that contained the phone numbers for people and businesses in a specific city. No, seriously. You kept under your hardwired phone.)
I won’t bore you with the entire list, but here are a few highlights:
• Andy Grove, one of the founders of Intel, was a Hungarian Jew whose family survived (barely) first the Holocaust, then the Communists, by luck and guile. Grove built Intel into the dominant chip developer during the personal computer boom of the 1990s and 2000s.
• Vinod Dham, creator of the Intel Pentium processor, was born in Pune, India. Dham also was a co-inventor of the Flash memory chip. Without Dham, no Pentium processor. Without the Pentium processor, no PC dominance.
• Steve Jobs was the son of a Syrian graduate student, Abdulfattah Jandali. You’ve heard of Steve Jobs, right?
• Sergey Brin, co-founder of Google, was born in Moscow to Jewish parents who immigrated to the U.S. to escape dismal lives in the Soviet Union.
• Peter Thiel started as part of the PayPal Mafia. Thiel, who went on to invest in Facebook and found big-data pioneer Palantir, was born in Frankfurt to German parents who immigrated to Cleveland shortly after his birth.
• Elon Musk, the most celebrated PayPal Mafia alumnus, was born in South Africa. Musk went on to found Tesla and Space X.
• Max Levchin, yet another PayPal Mafioso, was born in Kiev, Ukraine to a Jewish family who left for the U.S. after bring granted political asylum. After PayPal, Levchin founded Yelp and other tech startups.
• David Sacks, born in South Africa, is our final PayPal Mafia alum. Sacks went on to found social-media tool Yammer, which he sold to Microsoft for $1.2 billion. In cash.
• Steve Chen was born in Taiwan. With Jawid Karem (a Bangladeshi/German born in Germany) and Chad Hurley, both PayPal Mafia (but you saw that comin’), they founded YouTube in 2005, which they sold to Facebook in 2006 for $1.65 billion.
• Satya Nadella, CEO of Microsoft, was born in Hyderabad, India and came to the U.S. as a grad student at the University of Wisconsin – Milwaukee.
All those people could have ended up in Europe, but they didn’t.
For years – decades actually – Europe has looked at the American tech industry and asked, “Why can’t we do that?” One answer is, “Because you lost the battle to attract the brightest, highly skilled internationals to the U.S.” Those above-named tech giants have transformed the U.S. economy from one based on heavy industry and finance to one that’s now digital-based.
Let’s look at the largest U.S.-based tech companies ranked by market capitalization (calculated by Q1 2017 share values) :
Apple – about $750 billion
Alphabet/Google – $600 billion
Microsoft – $500 billion
Amazon – $450 billion
Facebook – $400 billion
Yes, companies such as Amazon and Apple physically move giant amounts of hardware and retail goods, but they move far more ones and zeros, generating revenue through leveraging their digital capacity in cloud computing, over-the-top video, music and games, and tracking the buying habits of customers.
Where is Europe?
There is no European equivalent of Apple.
There is no Google.
There is no Facebook.
SAP compares (sort of) to Microsoft, but had a market cap of only $115 billion as of May 2017.
The closest equivalent to Amazon is Berlin-based Rocket Internet. The Samwer brothers started by copying the idea of Zalando from shoe e-tailer Zappos, now part of Amazon. Unlike Amazon, Rocket Internet has a market cap of $12. Okay, it’s actually about $3 billion … about the size of a tertiary American digital player such as Tinder.
Europe, you’re going to be so sick of winning
So, Europe keeps losing, right?
As I’ve written before, Europe has the talent; America has the chutzpah.
Simply put, the world is moving past tech that comes out of garages in Silicon Valley and into an ever-accelerating lab-to-market model that depends on entire countries competing in the War for Talent.
The people I speak with in Eindhoven – engineers, physicists, entrepreneurs and investors – all tell me the world is on the verge of another microcircuitry/microprocessing revolution, this time in photonics boosted by quantum mechanics.
Listen Europe: Trump’s politics opens the door to stealing America’s tech talent to dominate this new phase of innovation.
We immigrants run scared ….
At the same time America is building walls, Europe’s attitude toward opening doors to tech talent is changing.
I had a back-and-forth last week at the Sport eXperience pitch day with Miklós Emődy, a member of LevelUp, a Danish startup team that’s using high tech to create better video analysis for football (soccer) teams. Emődy calls himself “a Hungarian-Argentinian-Peruvian.” No one on his Danish team is actually Danish.
LevelUp’s pitch was a cut above the rest and Emődy was impressive not just because he speaks perfect English and is wicked smart, but because he was candid about all the pivots LevelUp has made, and how hard the team has worked. He embodies the American startup attitude.
When I asked him if being an immigrant was an advantage or disadvantage, he said, “A big advantage.”
Emődy articulated what I experience every day: Talented people in affluent European countries such as Denmark and the Netherlands work to live – to enjoy long weekends, afternoons at the cafe and nice vacations – while immigrants live to work.
Immigrants – I call myself an “expat,” but I’m really an economic migrant/political refugee – run scared. My wife Cheryl and I literally put all our money on red in this big game of Roulette we call “startups.”
We work seven days per week, at least 12 hours per day.
Let me assure you we’re lazy compared to a lot of the immigrants we knew in the States from India, Russia, Vietnam, Moldova, Bosnia, China and Somalia. But why stop with refugees?
By actively recruiting mature talent developed in The Valley, Boston, Austin and New York, European countries could instantly start to catch up with the U.S. and China.
Who’s going to win?
The countries and companies that get in front of talent with pop-up presentations to international students at major American universities and anywhere really smart people gather. I’ll guarantee you there are Chinese, Indian, Pakistani, Bangladeshi, Iranian, Iraqi, Mexican, Israeli and Bulgarian kids who’ll want to talk with you … and more than a few native-born Americans.
New ways to lure America’s tech talent
No surprise, some countries are starting to make their moves.
• Estonia has the Work in Estonia program, with a website to walk you through the process of immigrating.
• Germany created the Make it in Germany program, with a website in 14 languages including Turkish, Albanian and Arabic.
Make it in Germany has everything, including an overview of careers, a primer on how to start the immigration process, and a description of what life is like in Germany, Europe’s largest economy. German employers get information about recruiting and integrating international qualified professionals.
• France has introduced the French Tech Visa, which fast-tracks work visas for three categories of tech talent: startup founders, employees, and investors.
Germany and France both have one major obstacle for internationals – you must learn the local lingo if you’re going to work there.
• Far more attractive is the Netherlands, where I live.
Yes, smaller companies are Dutch-only. But the majority of big companies Dispatches works with use English because – duh – they have a huge number of employees from outside the Netherlands.
We went through the Netherlands’ City Deal Warm Welcome program late last year in which Dutch officials discussed streamlining the immigration process to attract more highly skilled internationals.
My personal opinion, for what it’s worth, is that countries such as Luxembourg, Sweden, Netherlands, and Germany, which simply must have more tech talent to fuel their booming economies, must be proactive.
They need to physically go to The Valley, for example, and set up pop-up embassies like yesterday to pitch the best and brightest that Trump has decided to discard.
We have experience doing that, so this is hardly an altruistic motive on our part.
But still, if Europeans miss this chance, the political situation in the U.S. could change out from under them. And they’ll have missed yet another opportunity to maximize their collective competitive advantage.