Coalition of American chambers seeks a liberalised visa regime to woo foreign talent and spur economic growth, Suresh Pattali reports from Boston
Most of Boston’s economy revolves around the services industry while manufacturing companies employ approximately 15 per cent of the workers. — Photo courtesy: The Greater Boston Convention Visitors Bureau
An increasing number of open-market proponents have joined the chorus for an immigration perestroika in the United States in order to spur the much-needed growth in many regions of the country.
Paul Guzzi, former Massachusetts secretary of state and president and CEO of the Greater Boston Chamber of Commerce, is the latest to warn that there will be an industrial crisis if America does not radically change its immigration policies.
“We are dumb as a country. We need to radically change our immigration policies — the H-1B visas are part of it. We need to increase those H-1B visas,” he told journalists on the sidelines of Emirates airline’s recent inaugural flight to the historic city of Boston.
Boston officials are excited about the businesses generated by the international students who come to study in the city’s world-class universities. “I see those students every day. They patronise our clothing stores, restaurants, clubs, theatres, etc. The economic boost we get from trade is really huge,” argued Jim Klocke, executive vice-president of the Greater Boston Chamber of Commerce.
Boston has taken the initiative to form a national coalition of approximately 65 regional chambers to push the federal government to lift the employment visa cap and to give green cards to those who graduate with masters in stem education. “We need more engineers and scientists here because that is the basis of so much of what we produce,” he said.
Calling for more research funding in the country, Guzzi said there are a lot of private research scholars but the driver of much of innovations comes from the federal government. In this context, he pointed out that the Internet was the outgrowth of basic research done by the Department of Defence. “So we need more such funds, not less.”
There has been a big debate about liberalising the immigration policy in the US for a long time. The Senate last June passed a sweeping immigration bill that would give millions of undocumented immigrants a pathway to citizenship but the legislation has stalled in the House of Representatives.
However, there are signs that political leaders may soon offer a framework for reform. There has been so much work done on it in the White House and Congress in the past two years that Klocke believes there is a possibility that the new immigration bill will be passed later this year.
“President Barack Obama pretty much wants the immigration bill. The Republicans and Congress have resisted for a long but that is beginning to change. When Obama defeated Mitt Romney last year, one of the striking things in the election results was that the president raked up very large margins among Latino and Afro-American voters. Romney performed very poorly among these groups.
“So some of the smarter strategists on the Republican side think the party needs to support the immigration bill. So our coalition of chambers has been working in Washington to try to get the bill passed,” Klocke explained.
The chamber officials outlined the strength and weaknesses of Massachusetts and Boston and where the international players such as the UAE can come in to help.
Explaining the five major industry clusters in the region, Guzzi said the fundamental foundation of Massachusetts is its colleges and universities. “We think they are world-class. And we think that may in part be the connecting point between the Middle East and this region.”
While Greater Boston with a population of 645,000 people boasts approximately 75 colleges and universities, including Harvard and MIT, the State of Massachusetts with 6.6 million people has around 120 of them. “The other part which we think is world-class, though we need to do better, is our healthcare system, which in part is connected to our colleges and universities. We have great teaching hospitals and great research hospitals.”
Massachusetts pioneered universal healthcare in the US in 2006 when it passed a law that basically guarantees healthcare to all residents in the state.
“We have approximately 98 per cent of our population covered by our healthcare. And we have approximately 99.2 of our children covered by our healthcare. The so-called affordable Obamacare care is, in fact, modelled after the Massachusetts law,” Guzzi pointed out.
The third major sector that Massachusetts has and wherein the state had some leadership is the technology industry. Guzzi said much of the technology industry in the US had actually originated in Massachusetts.
“I happened to have the privilege of working at Wang Laboratories for Dr An Wang. He was one of the two inventors of the core memory which was the original basis of modern computing.”
“We built up a technology hub which was very strong but we lost the leadership to California,” Guzzi lamented, but added that most of the major technology companies, such as IBM, Hewlett-Packard, Google and Microsoft, still have significant presence within the state. “And they are here because of the first assets we have which are talent as well as colleges and universities.”
Guzzi said Massachusetts lost the technology leadership basically because the state missed the PC wave and companies like Wang Laboratories Digital and Data General were in the mini-computer industry. “Now those PCs are being replaced, but we failed to keep pace with each wave as technology kept changing.”
The fourth and fifth clusters — financial services and tourism — are the other areas of potential cooperation with the Middle East. “We have major venture capital institutions. In fact, the originator of mutual funds is in the Boston area. Fidelity, Putnam and MFS are all based right here,” Guzzi said.
Most of Boston’s economy revolves around the services industry. While manufacturing companies employ approximately 15 per cent of the workers, the rest are in the service sector, some of which are local in nature and some doing businesses internationally.
Guzzi said the history of Boston and Massachusetts is the history of the founding of the country, so tourism is very important to the development of the region.
Other highlights of the state and the city include important cultural institutions like the Museum of Fine Arts, the Boston Symphony and Boston Pops. The city is also home to World Series baseball champions Red Sox, the basketball team Boston Celtics and the football club New England Patriots.
With such diverse clusters available for potential partnerships, Boston officials said Emirates’ direct flight service will be mutually beneficial. “We want as a community to reach out to the rest of the world. We are no longer — nor can you be — siloed. So this direct flight connection is very important to us. The Internet has changed all of our lives, the way we work and the way we communicate, so we hope to be more closely aligned with you in multiple ways,” Guzzi added.
The chamber official promised that Massachusetts is open in terms of outsourcing. “Because of the Internet we can do things as project teams that are interconnected. The other part of it obviously is the cost benefit.”
“So you will see openness on outsourcing though for high-value precision manufacturing, we would like to keep as much as we can here as the integration of RD and manufacturing sometimes can be an asset particularly in early phase product development,” Guzzi said.
With the Middle East, Klocke said, businesses could primarily be in the technology, higher education and tourism sectors. “Our universities are opening satellite campuses around the world. It’s an amazing phenomenon and this trend is going to continue because the growth of universities in Massachusetts is constrained due to the scarcity of land and marginal population growth. Since our universities have to go through fierce political battles to get local approval for adding infrastructure and students, they face more pressure to go overseas to grow.”
Life sciences and biotechnology is another possible field for opportunities. “We have a large biotechnology sector here. There are both pure biotechnology companies that are doing fundamental research in genetics and developing genetic therapies, and big research operations run by major pharmaceutical companies who are located here because of the universities and hospitals. They are the cutting edge of the all the revolutions that has been going on in stem cells therapy, cancer therapy, etc. They are seeing lots of investments, but they need a lot more,” Klocke argued.
Massachusetts also has lots of infrastructural needs. Governor Deval Patrick has prioritised airport development to facilitate international direct connections and a rail network down to the south coast to augment economic growth.
Technology companies are also an investment hotbed. The latest revolutions in smartphones and fitness trackers also need huge investments, Klocke added.
The American awareness of the Middle East has for long been limited to those countries that have been in the news most — such as Israel, Egypt, Lebanon, Syria, etc. But that has begun to change with the evolution of countries like the UAE as a stable and free market economy acting as a magnate for international trade.
“We used to look primarily at Europe as our export market, but the continent matured as an export market long time ago. There are lots of companies here — both large and small — who are trying to do things in regions and markets around the world where we have not been before.”
Though Canada is the largest trade partner, followed by Germany, France and the UK for geographical reasons, Boston’s financial services sector has huge focus of attention on China and India because of the sheer size and growth of their middle class, but Klocke admitted that doing business in both these countries are not friction-free as they are still not 100 per cent open markets.
Boston is interested in doing business with everyone that is economically and politically stable and hence sees opportunity in places like the UAE, Klocke said.
“The face of Boston is changing. The economic potential of Boston is high but it is not guaranteed we are going to realise it unless we make some smart decisions. We need to keep reaching out and keep growing the connections we have with the rest of the world.”
And Emirates’ operation to Boston and the city’s aggressive push for direct services with other world capitals are important in the grand scheme of things.