One role of the U.S. as global driver of innovation is declining due to a global pivot in technology entrepreneurship.

American education and entrepreneurism in technology have been either an essential or at least a primary factor in technology innovation in emerging countries. Now, home grown enterprises in these countries no longer depend as much on the United States. This will affect how much deference will be given in myriad ways to the U.S.

The established model of innovation in information technology is the circulation model. That is, individuals (primarily Asians) study and work in the U.S., often found companies in the U.S. But many return to their country bearing skills and contacts, and found businesses many with bridges into the U.S technology ecosystem.

A 2006 book, The New Argonauts: Regional Advantage in the Global Economy by AnnaLee Saxenian says that immigrants in Silicon Valley, mainly Chinese and Indian, built transnational networks linking California with Bangalore, Taipei, and Shanghai, launching startups, mobilizing venture capital, and transferring managerial and technical know-how.

This played an expanding role over 50 -plus years. I described here the transnational workforce of Indians who work, live and invest in both Silicon Valley and in India. This workforce was the demographic foundation of the Indian community in U.S. through today. Key milestones: 1965 immigration reform enabled growth; H-1B visas surged from the 1990s, with Indians claiming 50-70% by the 2000s-2010s. Indian outsourcing firms (TCS, Infosys, Wipro) dominated IT staffing while US companies established major operations in India. Indian-American population grew from 500,000 (1990) to 3 million (2020), forming substantial suburban communities. Recent trends include tightened visa restrictions under Trump, diversification of Indian firms beyond H-1B dependence, and expanded US corporate presence in India employing hundreds of thousands.

One study looked at the “returnee” phenomenon in China. “China’s experience validated this expectation. A body of empirical literature from the late 2000s and early 2010s shows that Chinese returnee-led firms outperform locally founded firms across multiple dimensions, including innovation output, export intensity, speed of internationalisation, and overall firm performance. Many studies  consistently found that overseas experience translated into measurable advantages for entrepreneurial ventures, particularly in knowledge-intensive sectors. These outcomes were reinforced by policy: China complemented market forces with explicit state interventions—returnee-focused incubators, preferential funding, and talent programs—designed to absorb and amplify diaspora expertise.” The paper: “The Indian Returnee Paradox: Why the Diaspora Is No Longer Driving Startup Success.”

This February 2026 article, “Is Immigration Good for Health? The Effect of Immigration on Older Adult Mortality in the United States” is very timely because the healthcare sector is one of the more vibrant sectors in terms of employment. the WSJ writes, “Nearly all of the new jobs added in January were healthcare jobs or positions related to healthcare.” The article says that the healthcare sector – in particular nursing homes – are dependent on foreign-born workers. To the extent that mortality among nursing home residents is affected by the supply of these workers,

Not only do foreign-born workers not displace native born healthcare workers, but they increase the native born healthcare wsatorkforce by providing critical staffing.

One in five frontline nursing home workers are immigrants. One in three home care workers are immigrants.   These workforces are growing at a faster rate than almost all other segments of the workforce.

This is a valuable article as it explains how immigrants flow into the healthcare workforce without displacing native-born workers. I’ve broken that down into five steps:

Step 1. Immigration expands the local pool of working-age adults. When immigration rises in a metro area, the effective supply of potential workers rises with it.

Step 2. Some immigrant origin groups have a much higher propensity to enter health and long-term care jobs, for historical, educational, and credential-transfer reasons. They  include aides, nurses, and physicians.

Step 3. Health care is a labor-constrained sector with persistent shortages. Training pipelines are slow, wages are often administratively, and working conditions deter many native-born workers. When new workers appear, they are absorbed rather than displacing existing staff.

Step 4. Immigrants enter the system at multiple skill levels and over time. Therefore the workforce effects grow gradually rather than appearing all at once.

Step 5. Additional aides and nurses relax bottlenecks inside care organizations. Hospitals and nursing homes can deploy physicians more effectively once support staffing improves.

Saving lives: An increase of 1,000 immigrants causes roughly 142 additional immigrant health-care workers—and about 173 total health-care workers—to appear in the local labor force.

Over many years there has been a constant critique of immigrants that they impose a financial burden on local, state and federal governments.  A common approach is to estimate public spending for immigrants without taking into account (1) enormous variation in burden/net contribution based on income, (2) their wage-related taxes and roles in pertinent industries (such as farming), and (3) citizens of matched demographics also are users of the same programs.  This posting highlights some studies.

Below is a relatively succinct take on this issue.   An ultra-simplified summary: low-income households, whether citizens or non-citizens, depend on government benefits – housing, food, medical care – to make ends meet.  As most are federal, it is up to the federal government to decide if and how to make them available.

There are two complicated parts of immigration law which impose, in different ways, constraints on what federal public assistance programs that certain non-citizen foreign-born persons have access to. (Go here for my description of the Public Charge Determination and the Public Benefit Rule – the terms often are used informally)  In all my readings on these standards, it became evident to me that while these standards are necessary, they are based on a core fiction: that to live in the United States, at the lowest quarter of household income, one can survive without at some time using public assistance programs.

First Trump administration Public Charge Rule

The “Public Charge” rule revisions proposed by the first Trump administration in 2018, but held off by a court,  would have effectively barred a very large number of legal low wage immigrants in the country from obtaining green cards. For example, among 48% of farm worker households, at least one person used at least one of the cited public assistance program in the past two years.

The median total income of these primarily farm working households (in 2014) was roughly $25,000. About 20% of all U.S. households have total income under $25,000 (found here). Another 9% have incomes between $25,000 and $35,000. The median household income of non-citizen immigrants in $40,000. (go here). Bottom line: a large share of non-citizen immigrant households are now vulnerable to denial of a green card due to use of public assistance programs actively used by citizen households with low incomes.

Manhattan Institute Sept 2024 study (here and here)

Summary: Immigrants without a college education and all those who immigrate to the U.S. after age 55 are universally a net fiscal burden by up to $400,000. (Grandma coming in at age 65 has imposed a lifetime fiscal drain of $406,000). The large positive fiscal impact of young and college-educated immigrants pulls up the overall average. Each immigrant under the age of 35 with a graduate degree reduces the budget deficit by over $1 million during his lifetime. As for those coming to the U.S. to study, the fiscal impact of the average graduate degree holder who entered the U.S., aged 18–24 is outstandingly positive, which is why the author strongly favors keeping STEM students here to live.

For 18 – 24 year old immigrants without a high school degree, the lifetime net fiscal impact is negative $314,000. The author looks at the impact of a U.S. born person with the same profile and estimates negative $256,000.  This is an interesting comparison as it shows that persons with poor formal education of a fiscal net loss, regardless of birth place.

Cato January 2026 study (here)

Summary: The public burden varies sharply by immigration status, largely because of age. Noncitizen immigrants—those on temporary visas, lawful permanent residents, and unauthorized immigrants—consumed by far the least: about $4,600 per person, or 54 percent less than natives. They represented 7.3 percent of the population but only 3.5 percent of total welfare and entitlement consumption. Their lower use holds across all major age groups and is especially pronounced for Social Security and Medicare, reflecting their younger median age.

Naturalized immigrants show a different pattern. They consumed about $11,500 per capita, roughly 17 percent more than native-born Americans. The study attributes this entirely to demographics: naturalized immigrants are older on average and therefore draw much more heavily on Social Security and Medicare. Once benefits are separated into old-age entitlements versus means-tested programs, naturalized immigrants still consume similar levels of means-tested welfare as natives, but significantly higher old-age benefits.

The Institute of International Education has issued its Fall 2025 figures for international student enrollment.  Compared to the 2024-2025 academic year, which saw 1.2 million international students enrolled, in the Fall of 2025 total enrollment declined by 1%, which masks a 17% decline in new students while current undergraduates rose by 2%. This suggests that the new student flow has sharply cut back while those already enrolled are more determined to complete their degree.

Why the decline in new students? The IIE says colleges blame it on visa problems.

OPT – Optional Training Program – remains as a strong magnet for students.  (Go here and here for my prior posts.) Almost all colleges believe that students would go elsewhere without it. Roughly 330,000 today, approaching 30% of all international students.  As I’ve noted before, OPT is a channel into H1-B which is a channel into a green card. On purely personal perspective I expect this is a major attraction for many students but not valued by others. (Go here and here.)

Some colleges fare better than others in keeping their new international student roster high. One factor is the prestige of the college. One with high prestige will have a longer wait list to draw from if initially admitted students fail to get a visa. (Go here).

This plays out in Massachusetts. Fitchburg State University, with a student body of 6,100, attracted 271 international students in 2023 and only 148 for the 2025-2026 year. (Go here.) U.Mass Boston, which aggressively ramped up its international student numbers since about 2010, reports a 17% decline in first year international student enrollment this fall.

The phenomenon of Northeastern University

I can’t find figures for 2025-2026 international student enrollment at Northeastern  University.  Compared to all other large universities in Boston (Harvard, MIT, Boston University) Northeastern has adopted a long term strategy of being a magnet for large numbers of international students. I doubt whether it is experiencing a set-back in international enrollment.

It is in the very upper ranks of American universities with 20,000 or more international students (along with New York University and Columbia). Northeastern launched a strategy some years ago for a global reach, of which some of the key elements were the following.  Create campuses in English speaking countries where visa problems are unlikely to arise (Toronto, Vancouver, London). Build up the quality of scientific and engineering research to become a major attraction for students (undergraduate and graduate) who want to attend an American university. Maximize opportunities for students to work in the U.S. such as via OPT and H-1B. Use an expanded network globally as a feeder system for talented students.

The report “Exceptional by Design” is not a very original statement in support of skilled immigration, but it synthesizes many studies into one document. It covers the potential use of more of those who come for higher education study and the use of early and mid-career immigrants.  Its argument:

• High-skilled immigrants accelerate innovation—their authorship of 36% of U.S. innovative output since 1990, with each 1% increase in their population share raising patents per capita by 9-18%
• They comprise 19% of National Academy of Engineering members, 24% of National Academy of Sciences members, and 34% of Nobel Prize winners.
• The semiconductor sector where immigrants founded Fairchild Semiconductor, which spawned Intel and Apple, and now account for 34% of patents in strategic fields, enhancing U.S. exports and competitiveness.
• 80% more likely than native-born adults to start businesses, founding not just boutique firms both also 55% of unicorn startups (valued over $1 billion),
• They expand job opportunities more than they compete for them, with H-1B workers earning a median $118,000 (surpassing 90% of U.S. workers).
• They make high-skilled labor less scarce, reduce income inequality, accelerating wage growth faster for low-wage workers while still elevating high-skilled pay.

Here are past postings on the penetration of skilled immigrants (mainly STEM and medicine) in the Boston area, the rise of foreign-born STEM workers over time, and polls showing strong support for skilled worker immigration.

The U.S. information technology sector (computer design, software, AI, etc.) is a major force in the world. When one compares its IT workforce with those of other countries, the role of foreign-born workers stick out.

The United States has 30% – 50% more software engineers per total workforce than does Japan. This is despite the relatively high penetration of numeracy and adaptive skills in Japan compared to other countries (go here).

One major factor behind the U.S. lead is the very high level of foreign-born information technology workers in the United States. The U.S. greatly depends on foreign-born IT workers. 39% of its software engineers are foreign born, compared to 4% in Japan. Japan depends are less on foreign workers throughout its economy than does the U.S (about 3% vs 19%).

For context, the U.S.’ use of foreign-born for software engineering (39%) is much higher than in the U.K. (18%).  There are roughly one million foreign-born software engineers in the U.S. How do they get here?  Among the roughly 700,000 H1-B workers. About half, or 350,000 pf them are software engineers. As I’ve posted before, there is a transnational IT workforce in the U.S. and India. This means that besides having a relatively lot more software engineers compared to Japan, the U.S. has a distinct advantage of being more able to draw easily upon a major supplier of software engineers in the world – India. Language barriers alone create a big barrier for Japan to beef up its software engineering workforce.