Highly Inventive Immigrants Also Make Natives More Innovative

A new study shows immigrants produce a significant percentage of innovations in America and make U.S. natives more inventive. The findings support other research that concludes the United States gains from more welcoming immigration policies. The study almost certainly understates the contribution of immigrants by not including individuals who immigrated before the age of 20.

“We find immigrants represent 16% of all U.S. inventors, but produced 23% of total innovation output, as measured by number of patents, patent citations, and the economic value of these patents,” according to a National Bureau of Economic Research (NBER) study by economists Shai Bernstein (Harvard Business School), Rebecca Diamond (Stanford), Abhisit Jiranaphawiboon (Stanford), Timothy McQuade (U.C.-Berkeley), and Beatriz Pousada (Stanford). “Immigrant inventors are more likely to rely on foreign technologies, to collaborate with foreign inventors, and to be cited in foreign markets, thus contributing to the importation and diffusion of ideas across borders.”

“Using an identification strategy that exploits premature inventor deaths, we find that immigrant inventors create especially strong positive externalities on the innovation production of their collaborators, while natives have a much weaker impact,” write the study’s authors. “A simple decomposition illustrates that immigrants are responsible for 36% of aggregate innovation, two-thirds of which is due to their innovation externalities on their native-born collaborators.” (Emphasis added.)

The authors explain why immigrants are so helpful to the U.S. economy: Introducing new ideas and having diverse backgrounds and relationships are significant strengths. They found, “Immigrant inventors foster the importation of foreign ideas and technologies into the United States and facilitate the diffusion of global knowledge.” They write that immigrant inventors are “about twice as likely to collaborate with foreign inventors, relative to native inventors.” The patents of U.S.-based immigrants are about 10% more likely to be cited outside the United States than those of U.S. natives, and “immigrant inventors tend to have more collaborators” than their U.S. native counterparts.

“While we do find that immigrants are more likely to work with other immigrants (as compared to natives), this tendency declines over the life-cycle, suggesting a gradual assimilation process,” according to the NBER study’s authors. “These team interactions between foreign and U.S.-born inventors in the production of patents are of particular interest since they may be a key mechanism through which an inventor’s knowledge spills over onto the knowledge and productivity of his collaborators. These knowledge externalities are exactly why the U.S. may be able to allow high-skilled immigrants in the country and improve the welfare and productivity of U.S.-born workers.”

Innovations Applied Through Entrepreneurship

Other research shows entrepreneurship makes many innovations a reality. A 2022 National Foundation for American Policy (NFAP) study found 55% of the founders of billion-dollar companies in the United States had at least one immigrant founder.

Noubar Afeyan, cofounder and chairman of Moderna, has founded two different billion-dollar companies (Moderna and Indigo Ag). He was born to Armenian parents in Lebanon and immigrated to Canada with his family in his early teens. After college, Afeyan came to the United States and earned a Ph.D. in biochemical engineering at the Massachusetts Institute of Technology (MIT). In the United States, he has over 100 patents. In part through Flagship Pioneering, he has cofounded or been active in approximately 70 startup companies.

Hari Balakrishnan, born in India, became an international student and earned a Ph.D. in computer science at the University of California, Berkeley. After completing his Ph.D., he moved to Boston to become a professor at MIT. At MIT, Balakrishnan and Sam Madden developed a project to put instruments on moving vehicles with sensors to evaluate road patterns and transportation-related dangers. Balakrishnan has received several patents and founded Cambridge Mobile Telematics with Madden and Bill Powers. The company improves road safety for drivers, has over 400 employees and is valued at more than $2.5 billion.

The Study Likely Understates Immigrant Innovation

Due to the NBER study’s methodology utilizing Social Security numbers, Bernstein, Diamond, Jiranaphawiboon, McQuade and Pousada likely understate immigrant contributions to U.S. innovations by excluding immigrants who came to America before age 20. The limitation was deemed necessary due to their use of Social Security numbers to help identify immigrants.

Gene Berdichevsky immigrated to America as a child from Ukraine. Before becoming CEO and cofounder of Sila Nanotechnologies, Berdichevsky was the seventh employee at Tesla Motors (the principal engineer on the Roadster battery) and earned an M.S. in engineering from Stanford. He holds dozens of patents. One of his cofounders at Sila, Gleb Yushin, came to the United States from Russia as an international student and has over 200 patents related to energy storage for batteries. Electric vehicles and other devices use Sila’s technology.

Hari Ravichandran immigrated with his family from India at 14. At 16, he enrolled in classes at Mississippi State and earned degrees at Stanford and Wharton. In 2017, he founded Aura, which has 660 employees and provides digital security for identity and online accounts. He has been the CEO and founder of two other companies—Jump Ventures and Endurance International Group—and has been the lead author on many patents.

Science competitions also indicate the contributions to innovation of immigrants who came to America as children. Eighty-three percent (33 of 40) of the finalists of the 2016 Intel Science Talent Search, a leading science competition for U.S. high school students, were the children of immigrants. Several of those students were born abroad.

Other Research Supports The NBER Study’s Findings

Other research supports the NBER study’s findings that immigrants make an outsized contribution to U.S. innovation. “The presence of foreign graduate students has a significant and positive impact on both future patent applications and future patents awarded to university and non-university institutions,” according to economists Gnanaraj Chellaraj, Keith E. Maskus and Aaditya Mattoo. “Our central estimates suggest that a 10% increase in the number of foreign graduate students would raise patent applications by 4.5%, university patent grants by 6.8% and non-university patent grants by 5.0%. Thus, reductions in foreign graduate students from visa restrictions could significantly reduce U.S. innovative activity. Increases in skilled immigration also have a positive, but smaller, impact on patenting.”

Madeline Zavodny, an economics professor at the University of North Florida, reviewed the economic literature and examined the impact of international students on Optional Practical Training (OPT) in an NFAP study. “Areas with more foreign-born STEM [science, technology, engineering and math] workers have higher patenting rates, faster productivity growth and higher earnings among U.S. natives, among other positive outcomes,” she concluded. “The OPT program is a small but important way the United States attracts STEM students and enables them to contribute to the U.S. economy after graduation.”

Analysts point out that critics of immigration may be embarrassed by the new NBER study’s findings. The study shows immigrants are contributing a substantial proportion of America’s innovations, and blocking the entry of such immigrants weakens the United States and its economy. At the urging of immigration opponents, in 2022, Sen. Charles Grassley (R-IA) blocked an exemption from annual green card limits for foreign nationals with a Ph.D. in STEM fields and those with a master’s degree “in a critical industry,” such as semiconductors. Businesses and universities said the provision would have made a significant difference in the ability to attract and retain talent in America.

“Innovation and technological progress is considered to be a key determinant of economic growth,” according to the NBER study’s authors. “There is growing suggestive evidence that immigrants play a key role in U.S. innovation.”