Certain organizations breed innovation - they have invested in cultures to spur new thinking and innovative ideas. How did they create that culture? Research from the last century points to increased success if they hired immigrants. Now the fear is that with new immigration regulations, innovation could slow down.
President Donald Trump’s recent executive orders crack down on illegal immigration as promised. But his immigration and refugee ban, leaked draft orders, and the language of his top aides all suggest that he’s looking to go further, restricting the legal immigration of “high-skilled” workers as well. If these efforts succeed, it’s possible that America’s ability to innovate will take a hit, compromising the country’s technological edge and economic growth.
History provides some support for that argument. In a new working paper, University of Chicago economists Ufuk Akcigit and John Grigsby and Harvard economist Tom Nicholas examined the role that immigrants play in innovation. By matching U.S. patent data to local Census data between 1880 and 1940—what they call the “golden age of innovation”—they were able to quantify the significant contributions of immigrants to American technological progress. Broadly, they found that immigrants fueled regional inventiveness, bolstered creative momentum within their industries, and drove long-term technological growth.
“You’ve got these anecdotes like Alexander Graham Bell that give you an image of what immigrant inventors were like, but hopefully, the beauty of this paper is that we’re going way beyond those anecdotes,” Nicholas tells CityLab.
The paper first illuminates how immigrants influenced the geography of inventiveness. In states like New York and Illinois that had the highest per-capita patents in this time, around 20 percent of the population was foreign-born. In the states with the least, immigrants only comprised 2 percent of the population. This breakdown is particularly important because regions and technological sectors with higher patents see more economic growth, according to previous research by the same authors. There’s a couple of reasons for that. “One explanation is that immigrant inventors concentrate in technology areas that are already growing rapidly,” Nicholas says. “Independently, they fill gaps in knowledge.”
In other words, immigrants with big ideas flock to places and fields where their ideas are in demand. And when many of them work together, they influence each other, compounding the ingenuity in their own field and others, Nicholas explains. This “spillover effect” is the reason why some places become powerhouses of innovation and economic growth. Silicon Valley is the most obvious modern-day example.
