I met Phil in a restaurant in Belize. Phil spent the first seven years of his life in Belize, but then moved to California. He got a degree(s) in biochemistry and worked in a number of medical diagnostic startups in California until about eleven years ago. He moved back to Belize because of some health issues with his parents. Phil now teaches yoga, owns a fitness center, and plays in a band. He is happy in Belize and appears to do nothing with his background in biochemistry.
It is often said that the U.S. needs to increase the number of H-1B visas in order to increase our innovation. An H-1B visa allows employers to bring in foreigners with special talents that they cannot otherwise fill. However, Phil’s example shows that the economic environment is driving away highly skilled technical workers already in the U.S. While I am sure that Phil genuinely is enjoying his new life in Belize, it is also likely that he became a yoga instructor because the cost, stress, and return for working as scientist or engineer in the U.S. no longer felt like a good return on his efforts.
Phil’s example is not unique. I know of many technology entrepreneurs who have left the field. For instance, I know one successful serial entrepreneur who has taken pseudo government jobs since around 2001. I know that he would have jumped into another startup if he had seen good prospects for startups. I know another successful serial entrepreneur who recently decided to hang it up and get a regular programming job with a military contractor. The risk reward ratio did not make sense to him anymore. These are not isolated examples. Both my own experience and the macroeconomic data show that there are fewer startups and most technology startups are focused on creating evolutionary technologies in a small business and selling out to a larger company or running it as a cash flow business. What we need is startups focused on revolutionary or disruptive technologies that will create large business and go public. The U.S. economy is stagnating (or worse) without these sort of startups.
The reasons for our. economic and technological stagnation are clear. We have weakened the most important property rights, patents, which are the foundation for companies creating emerging technologies. The America Invents (not) Act, (H.R. 1249 & S. 23) will further weaken our patent system. Sarbanes Oxley and now Dodd Frank make it almost impossible to go public in the U.S. This makes it very difficult to fund technology startup companies. It is easier for someone to gamble in Vegas than to invest in a technology startup company today. This is INSANITY. Do we want people gambling or do we want them to invest in companies that create jobs and raise everyone’s standard of living????
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