As startups struggle with talent, Canada is trying to attract U.S. bound high skilled immigrants
By Elsa Allmendinger, Policy Fellow, Engine
Hiring early employees is one of the first obstacles startup founders face, made more complicated by talent shortages in STEM fields and an immigration system that often makes it time consuming and expensive to hire high-skilled talent from abroad. Other countries — most recently Canada — are taking advantage of that reality to attract tech talent away from the U.S. Without urgent action from policymakers, the U.S. innovation ecosystem will soon lag behind, as talent will continue to seek out nations where they receive a warmer welcome and better support.
For years, high skilled immigrant talent has helped U.S. technology companies meet their talent needs — but despite these contributions, significant talent shortages remain. Options for hiring high-skilled immigrant talent are also limited. Currently, founders and technology companies rely on a few pathways to employ immigrant talent. Students on F-1 visas, for example, can apply for the Optional Practical Training (OPT) program to temporarily work in specialized fields. The H-1B visa program is another option, giving many technology companies the staffing boost they need, allowing them to hire needed skilled talent to support innovation and remain competitive.
Unfortunately, the H-1B visa program, and the U.S. immigration system more broadly, are far from perfect. H-1B visas are capped at 85,000 visas each year. In a recent lottery, there were 350,000 H-1B visa applications unfulfilled after the cap was met. Those lucky enough to secure a visa still face issues due to the limitations of the visa itself. While broad demand for skilled STEM talent in the U.S. still exists, some H-1B workers have been affected by layoffs, facing difficulties shifting their employment to other companies or risking being forced to leave the country. And while entrepreneurship could serve as a viable solution for laid off immigrant tech workers, the U.S. doesn’t have a startup visa program these workers could pivot to, unlike other countries.
In light of the U.S. immigration system’s shortcomings, other nations are stepping in to lure top immigrant talent and entrepreneurs away from the U.S. Canada funds billboards in Silicon Valley beckoning STEM talent and founders to consider moving north. And they recently announced their “Tech Talent Strategy” that directly targets H-1B visa holders in the U.S., offering high skilled talent a new streamlined work-permit option for up to 10,000 H-1B visa holders. The new program would allow permit holders to stay in Canada for up to 3 years with almost any employer, along with the option for family members to study or work. Canada’s Tech Talent Strategy also includes improvements to their Global Talent Stream, which creates an accelerated application process for work permits for highly skilled, highly desired talent. Canada also made improvements to their Start-Up Visa (SUV) program, and provides entrepreneurs with capital, resources, and more, to make it easier for talent and startup founders to launch there instead of the U.S.
Other nations are in lockstep with Canada, capitalizing off the faulty U.S. immigration system by creating more incentives for immigrants and top talent, specifically those who graduate from U.S. universities. Australia, for example, stations job recruiters in the U.S. to try to attract talent from American universities. And the U.K. has created a “High-Potential Individual” visa that allows graduates from the most prestigious universities around the world — 21 of which are in the U.S. — to stay and work in the U.K. for two years before finding other residential options in the U.K. Australia and Canada both have streamlined the process to progress from student to permanent resident, while the U.S. has no guaranteed postgraduate work visa option, outside of the Optional Practical Training program.
As high-skilled immigration pathways remain limited in the U.S., demand for skilled labor only continues to increase. But the increase in demand has not been coupled with an increase in the supply of talent. This inconsistency is even more stark with the passage of initiatives like the CHIPS and Science Act (2022), which provides for domestic semiconductor manufacturing, but relies on the accessibility of talent that is necessary to operate these semiconductor facilities to actually fulfill the goals of the legislation. And startups similarly are feeling the effects of talent shortages, but are often even more limited because of their size and needs in their ability to attract top talent.
Within 48 hours of the opening of Canada’s new H-1B stream, all 10,000 applicant spots were filled, blatantly demonstrating the level of competition the U.S. has for talent. Until the U.S. attempts to remain competitive on the international stage, embracing a system that welcomes the skills and talents of immigrants, other nations will continue to take advantage of the multitudes of dissatisfied international students and skilled foreign workers, drawing innovation away from the U.S. to other more supportive countries.
Engine is a non-profit technology policy, research, and advocacy organization that bridges the gap between policymakers and startups. Engine works with government and a community of thousands of high-technology, growth-oriented startups across the nation to support the development of technology entrepreneurship through economic research, policy analysis, and advocacy on local and national issues.