Tech Roundup Episode 21 – The CHIPS Act, Immigration, and the Innovation Economy

[Music]

 

Intro:  Welcome to The Regulatory Transparency Project’s Fourth Branch podcast series. All expressions of opinion are those of the speaker. 

 

Chayila Kleist:  Hello and welcome to The Regulatory Transparency Project’s podcast. My name is Chayila Kleist, and I’m an assistant director of The Regulatory Transparency Project here at The Federalist Society. Today on this Fourth Branch podcast, we’re delighted to host a discussion on the CHIPS Act and immigration. To address this topic we have with us today a stellar pair of experts who I will introduce briefly before they jump into the discussion. As always, please note that all expressions of opinion are those of the experts on today’s program as The Federalist Society takes no position on particular legal or public policy issues. 

 

First off, we’re joined by Caleb Watney who’s the cofounder and co-CEO of the Institute for Progress where he manages the meta science and immigration policy teams. His research focuses on policy levers that the U.S. could use to rebuild state capacity and increase long term rates of innovation. Previously, Mr. Watney worked as the Director of Innovation Policy at the Progressive Policy Institute, was a technology policy fellow at the R Street Institute, and a graduate research fellow at the Mercatus Center. His commentary has been published in The Washington Post, The Atlantic, Politico, Lawfare, and The National Review. He’s also been cited in The New York Times, The Economist, Vox, Ars Technica, and The National Journal. 

 

Also joining us today as our guest host for the podcast is Adam Thierer, who’s a senior fellow for the Technology & Innovation Team at R Street. Prior to joining R Street, Mr. Thierer spent 12 years as a senior fellow at the Mercatus Center at George Mason University. Before the Mercatus Center, he served as the president of the Progress and Freedom Foundation. Mr. Thierer also worked at the Adam Smith Institute, the Heritage Foundation, and the Cato Institute. During his career, Mr. Thierer’s published at least ten books on a wide range of topics, including online child safety, internet governance, intellectual property, telecommunications policy, media regulation, and federalism. 

 

And I will wrap it there for the sake of time and getting into our discussion, but if you’d like to know more about either of our guests today, please feel free to visit regproject.org where you can read their impressive full bios. With that, however, I will hand it over to our host. Mr. Thierer, the mic is yours. 

 

Adam Thierer:  Well, thank you so much, and, Caleb, thanks for joining me today. I appreciate it. 

 

Caleb Watney:  Of course. Yeah. Always fun to join in the conversation. 

 

Adam Thierer:  So Caleb and I go back awhile. We worked together at the Mercatus Center where we did some work on a variety of technology policy issues, including some essays and filings on driverless car policy. I think Caleb will agree that that’s probably the best thing ever written on driverless car policy, and I don’t know why anybody — nobody really needs to publish any more after that. But they continue to do so. But no, we had a great time there, and we’ve continued to work together informally and also play poker together. And I’m tired of inviting Caleb to my poker nights because he wins my money too often. So that might need to stop. 

 

So one of the things I’ve always leaned on Caleb for is information about what’s happening as it pertains to tech and immigration. These two things are very important topics that are increasingly linked at the hip because without high scale talent, you don’t have high powered technology sectors and national competitiveness in innovation. They all go hand in hand. And Caleb, now that he’s gone off and started the Institute for Progress with Alec Stapp, he’s done amazing work to really zero in on this as a policy priority for the United States as it faces off against China and other nations on a whole host of new fronts. 

 

So I’m going to turn to you, Caleb, and ask you first to start sort of high level like why this has been a priority for the institute, why you and Alec and your colleagues have brought on a lot of talent to focus in on this and also to contracted on papers and just an absolute flood of materials? So why has this become front and center for the Institute for Progress?

 

Caleb Watney:  Absolutely. So I think at the highest level economists generally agree that innovation and technology are the forces that really propel humanity over the long run. In the short run, you can have changes that come from better policies or better institutions. But in the long run it’s really technology, innovation, and growth that kind of drives humanity forward. 

 

And what really creates innovation is also something that economists have spent a lot of time on, and you can kind of think about what are the inputs to innovation at the highest level. So there are funding basically. What kind of goes into the way that we fund science and technology? What drives capital investments? There’s kind of the agglomeration effects where humans all get together in these big urban clusters, and together their work is more productive than they would be alone. You can think about San Francisco, Boston, Austin, and a number of other cities where these things kind of happen. There’s also the culture of innovation which, Adam, I think you’ve written a lot about, sort of what drives particular people to strive for their most ambitious kind of versions of their ideas. 

 

And then lastly and I think kind of the issue that’s going to take up most of the conversation today is the human capital, the talent, the people who are actually coming up with the ideas and working together. They’re the ones who are taking the science funding, taking these agglomeration clusters, sort of building on the recipes and the tacit knowledge that’s kind of come before them and adding new ideas to the knowledge dock. The economist Paul Romer actually won the Nobel Prize for kind of coming up with the basic formulation that innovation and growth is ultimately driven by new ideas. And as you have more people, that leads to more ideas. And so that’s I think at the highest level why the Institute for Progress focuses on innovation. 

 

I think you could also look at the United States’ particular history and realize how important immigration has been for driving progress in the United States specifically. I think it’s kind of underrated the extent to which back in the 1900s the United States was actually considered a bit of a scientific backwater. I don’t know if anyone has watched the recent movie Oppenheimer, but you can see that J. Robert Oppenheimer, the protagonist, ends up going to Europe basically for all of his studies. And all the most interesting scientific discourse and dialogue at that time was happening in Germany and Austria-Hungary. 

 

But over the next 90 years there was this huge basically migration of scientific talent across three kind of waves, both before/after World War II and then also sort of the aftermath of the Cold War, that led to just this massive infusion of scientific talent into the United States. And you can just look at the graphs about when did the U.S. start winning Nobel Prizes in physics and at what rate. And it’s just this massive spike after that time. So really the United States has always been this place where we’ve combined international scientific talent in American scientific institutions, and that’s led to things like the Manhattan Project, the Apollo Program, Silicon Valley that we see today. 

 

Adam Thierer:  Yeah. I want to ask you about that history, but first I want to briefly just comment on your excellent point about how essential immigration is to fueling economic progress and the success of nations globally. Matt Ridley, the great science writer, has this wonderful phrase about what really makes progress happen is when ideas have sex. And you bring interesting people and interesting ideas together and let them comingle, and magic happens. But that can only happen if you can bring the people together first. 

 

And so I think a lot of people forget that. And I think when you look at history, there are so many powerful examples, and you just started going down it. So let’s have you riff on that a little bit more because I know you wrote a piece I believe for the New Atlantis called “The Egghead Gap”, something like that. Is that right? 

 

Caleb Watney:  Yeah.

 

Adam Thierer:  And it basically outlined this history, like how the United States made an intentional effort in the Cold War era to try to bring in first former Nazi era scientists from post-war Germany and then to square off against the Soviet Union to try to steal away their best and brightest. And tell us a little bit more about that. I can’t remember. Was it Operation Paperclip; is that right?

 

Caleb Watney:  Yes. 

 

Adam Thierer:  Yeah. And so tell us a little bit more about that story because I think it’s so compelling and forgotten, if people even know about it at all. 

 

Caleb Watney:  Absolutely. So I think you could sort of look and squint your eyes and see sort of three basic waves of talent. And so the first that we actually see in Oppenheimer is kind of this way of Jewish emigrees that sort of are being persecuted in Germany and Austria-Hungary by Hitler and the Nazi regime and end up fleeing sort of to the Allied Powers to take refuge. And so some share of them went to the UK, but actually many of them went to the United States. And you had educational institutions like the Institute for Advanced Studies at Princeton which were making a very deliberate effort to sort of actively poach and recruit a lot of these top scientists, help them get integrated into the U.S., get them jobs, get them plugged into kind of some of the military apparatus. 

 

And actually there’s a really great quote right towards the end of World War II where Sir Ian Jacobs who was a military advisor to Churchill said that the Allies won World War II because our Germans were better than their Germans. And I think that’s just like such a great formation, and actually I think Oppenheimer in the film says that Hitler’s greatest weakness is antisemitism, that if you look at the share of physicists that were doing cutting edge work in Germany prior to World War II, they ended up persecuting — I’m probably going to fudge the numbers a little bit, but something like they lost around 15 to 20 percent of the physicists in their departments that were doing this cutting edge work because of the Jewish persecution. 

 

But if you look at the specific scientists, it ended up being something like 60 to 70 percent of their physic citations were the specific professors that they’re driving away. So it wasn’t just the sheer number of scientists but also just the caliber of intellectual talent that they were driving away, which is maybe the biggest [inaudible 00:10:11] in history by some formulation. But yeah, the United States ended up getting those scientists. A lot of them ended up forming the backbone of the Manhattan Project that ultimately helped contribute to the Allied victory over Germany in World War II. 

 

Following World War II, there was sort of this big race for talent between the U.S. and the Soviet Union over the remainder of some of the top scientific minds still from Germany and the Axis Powers. And so the United States had Operation Paperclip that you were alluding to where we both recruited and actually in some cases forcibly kidnapped top scientists who were kind of trying to figure out where they should go after the German regime had collapsed. And similarly the Soviets had kind of their own version of this. And the Soviets actually ended up getting more scientists than the United States did, but I think the U.S. ended up having better intelligence. And we were able to sort of pinpoint the best and brightest scientists. 

 

And so we got Werner von Braun and several other kind of top scientists who then ended up contributing to the Apollo program. Werner von Braun in particular was the chief architect on a lot of the early Apollo missions. And so the ethics of that particular program are still debated to this day, but it’s certainly the case that we were able to sort of really get a lead over the Soviets in our scientific capability because of that specific wave. And then as — sorry, go ahead. 

 

Adam Thierer:  No. Go ahead. Go ahead and finish. 

 

Caleb Watney:  I was just going to say and so then the last wave was sort of as the Soviet Union was beginning to collapse. There was a whole host of sort of mathematical talents especially that were looking to escape. And this was in the early ‘90s. And the United States passed, actually, the Soviet Scientist Act of 1992, which created a time-delineated caps visa pathway, but it was trying to make it as easy as possible so that Soviet scientists could basically come and work in the United States. 

 

This didn’t end up passing, but there was actually a proposal at the time to actively subsidize employers who were hiring Soviet scientists so that we could just basically integrate this talent as quickly as possible. And across those three waves if you look, it’s just like a massive share of the United States’ Nobel Prizes in especially physics and the hard sciences have come either directly from those three waves or from the children and descendants of those three waves. And so I think across those three waves it’s probably the single largest transfer of scientific talent in human history. 

 

Adam Thierer:  Yeah. It’s an amazing story, and this is still stuck in my memory because I came to Washington, D.C., in the early ‘90s during this period when the Soviet Union was falling and the world was changing. And I was working at the Heritage Foundation. I distinctly remember these discussions, and it was incredible. We were going to basically be able to vacuum up the world’s talent base and bring it here. And this was something that there was a lot of — a lot of people thought this was a great idea. This wasn’t really controversial. It was just kind of like ho hum, yes, great idea. Let’s get it done. We’re going to win this one. 

 

And then something changed, and I want to get into that, what changed. And of course I think the easiest thing to pinpoint was 9/11. A lot of things changed after 9/11 about public and political attitudes towards immigration of all sorts. But there were other things going on culturally, and one thing that I think I’m still struggling with is how this changed so radically to the point where today either we’ve forgotten about the importance of ideas like this in immigration more generally. But people are just very, very actively opposed to this, including the idea of stealing the world’s best and brightest, which we should understand from both a global competitiveness perspective but also a national security perspective as compelling rationales. I don’t understand. Like, what’s the argument against? So what changed? What’s the argument against?

 

Caleb Watney:  Yeah. Those are the trillion dollar sidewalk on the question. Sorry, I’m alluding to Michael Clemens, a famous economist, has the idea that under an open borders regime there would be trillions of dollars basically joint GDP. So there are trillion dollar bills just lying on the sidewalk, and yeah, we’re just refusing to pick it up. 

 

So I think 9/11 was definitely a big turning point. I think the other thing is that the U.S. sort of became complacent. Throughout the 20th century we were sort of in this position where we were looking up at the scientific powers of Europe and sort of trying to do everything we could to kind of get a foothold over them. And then we were also constantly in this sort of state of crisis. And I think crises can really sharpen the mind, help you force tradeoffs that you otherwise wouldn’t have to consider. And so you’re just looking for every advantage that we could get, especially over kind of these powers of Germany and then the Soviet Union. 

 

But following the collapse in the Soviet Union, there was sort of this period where the United States was able to just basically coast for like 30, 40 years without an obvious challenger. And a lot of the world’s talent ended up wanting to come to the United States by default. And we almost didn’t need to be actively recruiting them. The economist William Kerr actually has a really great graph that looks at sort of the share of immigrant inventors, so immigrants who basically have patents in something, and where they end up moving to all around the world from the period between 2010 and seeing that more of them moved to the United States than to the rest of the world combined. 

 

And so our immigration system has been broken for a while. The last time we passed a major immigration system was I think in the middle of the 1990s. But the system in some sense, because they had hard numerical caps that haven’t been adjusted based off of population growth or anything else, the problem has in some sense been getting worse over time. And so just the longer we go without having reformed it, the more it feels like actually a binding constraint. 

 

And so I think one of the things that changed is that we didn’t actually feel competitive pressure. There was no nation that we were sort of striving against. And then meanwhile, the background immigration conditions were slowly getting worse and worse and worse as kind of the last big compromise in the ‘90s has actually become more binding over time. So I think that’s one issue. 

 

I think the other issue is sort of there’s a perception of chaos and disorder that in some sense is very real around immigration to the United States because of the southern border crisis. And I think we’ve just seen both in the U.S. and Germany and the UK, sort of across the world, that perceptions of disorder are actually like the single most predictive thing in terms of voters’ response to immigration. And so even though there’s not actually a direct logical connection between letting in Indian PhD students in STEM fields and the southern border, sort of the two are inextricably linked in the mind of voters, I think, just because of this perception of chaos and disorder across the southern border. 

 

Adam Thierer:  Okay. So let me play devil’s advocate and put on a skeptic’s hat and say, well, okay, we don’t need all these immigrants. America’s got brilliant people. We’re doing fine and dandy, and we just need to put more of our people to work. 

 

Caleb Watney:  That’s right. 

 

Adam Thierer:  And what’s wrong with maybe keeping the walls high and tight and restricting even like the most skilled of labor from flowing in? Let’s just get better about making our own labor and talent base equal to whatever we could recruit from afar. What do you say about that argument?

 

Caleb Watney:  I think there’s a number of ways you could sort of attack this argument. The first is that the U.S. economy is an open system, and it can be positive sum. There’s a lot of economics literature that shows the fact that when especially highly skilled immigrants move to the United States they end up starting new businesses at disproportionate rates, so that’s actually increasing the number of jobs for native Americans. 

 

We can also see from their productivity effects as to your earlier comment innovation and productivity happens when ideas have sex. And new immigrants come, and they bring new ideas that weren’t here before. And that actually makes native born Americans more productive because of this interplay. And of course the long run effects of innovation can really drive wealth for both native Americans and for immigrant Americans as well. 

 

So I think point one is that this economy is positive sum. There’s actually not a tradeoff, and in fact there’s a benefit to native born Americans when we let in especially more highly skilled workers. I think the second point here is especially when you’re trying to think about leadership over global technologies. I like the phrase that talent is distributed evenly or at least roughly evenly across the globe. But opportunity is not. 

 

And the United States has only around 4 percent of the world’s population. We are still — even though the United States is large, in terms of population we’re still much, much smaller than the rest of the world. And so if you think about that, that means that sort of just naively only 4 percent of the world’s geniuses in some sense will by luck have been born in the United States. And the vast, vast majority of people who could be the next Einstein are being born elsewhere in the world. And so if we want to actually maximize their potential both for the sake of the world and for the sake of the United States and for our ability to kind of shape trends in global science and technology, that inevitably means that we need to be able to scout out the rest of the world’s talent. 

 

I also like the analogy I think you can think about immigration and compare it to college football, say. Any given year Alabama, Clemson, maybe a few other colleges but especially those two are usually the ones that are leading the league and have the best chance of winning the college football championship. But they also are not restricting themselves only to attracting talent from their home states. If Alabama was restricted solely to recruiting football players from Alabama, they might still be very good, but they certainly wouldn’t be the dominant force that they have been on the college football stage. 

 

And so actually a big part of what makes college football coaches effective is their ability to recruit talent from all across the United States, sometimes even the world, to come and play at their school. And I think the same thing is true for science and technology. And so the United States should think of itself in some sense as Alabama football. And we should be trying very aggressively to recruit the best and brightest to come play for our team. 

 

Adam Thierer:  Yeah. I’m sure the Alabama haters will push back against you for whatever reason on that analogy, but I like it. It makes sense. So let’s bring in the real world of what’s happening right now as we confront China on a number of different fronts and we think about strategic sectors and technologies that we want to develop relative to China and the rest of the world. And also let’s mention the CHIPS Act and how this plays into this because obviously Congress can’t get a lot done on the technology front. 

 

But the one thing they do seem to be able to get done is promotional activities related to sort of industrial policy measures or R&D kind of things. So clearly a lot of money has been spent recently to try to promote things like semiconductors, artificial intelligence, quantum computing and a whole host of other high tech or emerging technology sectors. And yet—and this is where I’ll ask you to bring in some of the recent news—it seems that this money is all going to go for nothing if we can’t find people to work in the high skilled jobs and sectors that actually would develop these things. So tell us how this is playing out in the real world right now. 

 

Caleb Watney:  Totally. So one of the biggest chunks of money that was specifically allocated in the CHIPS and Science Act was for semiconductor manufacturing. And so yeah, there are concerns both about our reliance on China but then also just competition with China. And so we wanted to onshore as much domestic manufacturing capacity for semiconductors in particular. 

 

And about $50 billion in new subsidies to help TSMC, Intel and a few other sort of big manufacturing companies open up new semiconductor fabrication plants, also sometimes called fabs. But unfortunately, there’s just such a limited supply of people around the world who actually know how to make cutting edge fabs. And in fact, it’s interesting to watch China’s approach. China has been spending billions of dollars over the last ten years to try to replicate Taiwan’s sort of burgeoning and world-class semiconductor industry and yet has largely been failing. And it has not been for lack of trying or for lack of money that’s been spent but for lack of real, on the ground tacit knowledge. 

 

It seems like it’s not only just something that you can convey in blueprints. You could drop the blueprints for how you design new semiconductors or even how you make new fabs, but that’s not actually the scarce element. It’s the tacit knowledge, the sort of on the ground how do you actually do this in a way that’s hard to actually write down that gets embedded into human capital, to actual people that has been so hard to replicate both for the United States and for China. And so as we’re trying to double, triple, quintuple the number of new fabs we have in the United States there’s a real risk. 

 

And we were trying to sound the alarm bells last year as this act was passing and saying you needed to couple all this new investment if you actually want it to pay off with new targeted STEM immigration provisions to be able to actually integrate some of the world’s top talents to actually build these. Unfortunately, Congress did not listen to our advice. They did not include any sort of STEM immigration provisions in the CHIPS Act last year. And now lo and behold I think a week or two ago The Wall Street Journal reported that TSMC—and that’s the Taiwanese Semiconductor Manufacturing Corporation, the largest and one of the most advanced semiconductor companies in the world—has delayed the launch of their new factory by I think a year or two because they’ve just been struggling to input the new talent. 

 

And I don’t think this is going to be an isolated thing. I think we’re going to continue to see shortages like this all across the United States, within semiconductors but also in other kind of high tech industries where talent is such an important part of actually getting the thing to work. And so to your point, Adam, I’m quite concerned that a lot of this new funding we just passed is ultimately going to end up being wasted unless we can begin to change the tide and really go hard on recruiting some of the top talent all around the world. 

 

Adam Thierer:  Yeah. So let’s talk about policy responses to this. First of all, I want you to answer the question is anybody in Congress paying any attention to how they just spent all that money and then it may all go down the toilet? That seems like a very big deal. We don’t want to waste however many hundreds of billions we ended up spending on CHIPS. And some of us were very skeptical for other reasons. But I didn’t think this would be the primary problem we would have. I was just worried about government misallocating money to certain types of ventures or corporations that would lose it for other reasons. But losing it because you can’t get good employees is like the worst: right? So that’s shocking to me. 

 

But let’s have you answer that but then also answer where do we stand in terms of policy more generally because the last time I wrote anything seriously about this issue is when we had a real serious push for the idea of stapling green cards to diplomas that foreign students earned when they were here in the United States studying, an idea that I still think is great. And a lot of people in Silicon Valley were behind that in a huge way. And then what happened there? How did that not get done? I thought that was the low hanging fruit easy solution. 

 

And then secondly, ideas like points based systems, I know Canada, I believe, has something like that and other countries. So talk me through first of all what happened to those efforts, which have been around for a long time, and then other types of things that are being proposed. 

 

Caleb Watney:  Right. So I think there’s unfortunately a number of odd dynamics that have left us in a bad equilibrium here. There were, I think, voices and there continue to be voices in Congress that are very aware of the problem. In fact maybe one of the most promising things that we’ve seen is just this session in the House they have the new China Select Committee, which is trying to sort of orient U.S. policy around sort of competition with China and the Chinese Communist Party. And Representative Gallagher who’s the chairman of that committee has actually been, I think, really playing a leading role in trying to help especially Republicans think through how talent should play a crucial part of their response against China. 

 

There’s also very powerful voices I think on the Democratic side. Chairman of the Commerce Committee Maria Cantwell was a big champion for this provision last year. And in fact, in the House version of the CHIPS and Science Act there was an amendment that passed on a party line vote with Democrats that would’ve created a green card cap exemption for STEM masters and for STEM PhD students. And so we were really hoping that that could’ve ended up passing, and that effectively would be a kind of stapling a green card when you get a degree from a U.S. higher education university in a STEM field especially. Unfortunately, that didn’t end up getting through the conference process, and there’s a lot of weird behind the scenes political reasons there. 

 

But almost at the highest level there’s been a weird flip in Congress. I think the conventional wisdom for the last ten years has maybe been that some Republicans would be willing to do high skilled and only high skilled immigration so long as Democrats were willing to give it up. But Democrats were unwilling to sort of give that up because they wanted to tie it to comprehensive immigration reform. But I think that logic has really flipped in the last three to five years, and now Democrats have shown a willingness to try to tackle high skilled immigration in isolation. But now Republicans are the ones who have flipped and want to basically tie it to border funding and addressing the border crisis. And so there’s been this really frustrating kind of back and forth political pinball kind of on both sides of not being willing to just address high skilled immigration but unfortunately tying it to these larger much less tractable political issues. 

 

And so that’s kind of been the basic facts on the ground through Congress. Thankfully there are some things that can be done through the Executive Branch, and here actually there have been some pretty positive developments under this last administration. There are a couple of key visa categories. So one is the O-1 visa for immigrants of extraordinary ability. This is actually an uncapped category that was created under the last 1990s immigration reform. But it’s supposed to try to capture the fact that there are really valuable immigrants that are extraordinary in contributing to the United States, and we want to have a pathway to allow them to come. 

 

Unfortunately, it is still a temporary visa program, so it can’t actually get you a green card, which is a really big kind of determiner for where immigrants kind of want to settle long term. And so Congress still ultimately has the pin on whether or not the green card cap gets lifted or not because we just have a certain number, especially for skilled immigration per year. But in the meantime, I think expanding things like the O-1 would be extraordinarily beneficial. And there have actually been some nice changes there in the last couple years. 

 

There’s also programs like the J-1 intercultural exchange visa, and there’s a new STEM category for that that was created in the last couple years. There’s some meaningful reforms that could be done to the H-1B visa which is one of the primary skilled immigration visas. But this kind of gets into a whole other can of worms, but the H-1B has particular problems because it’s a lottery based system. Rather than having any sort of prioritization system, basically it treats everyone as equal and kind of distributes it by random, which doesn’t end up prioritizing some of the most highly skilled immigrants that we want to make sure can come to the United States. 

 

So there are still other avenues that can be done on the Executive side. Some already have. There’s been nice progress, but there’s still a ton more to be done. But ultimately Congress is the one that controls the number of green cards. 

 

Adam Thierer:  Right. So betting odds here, what are the chances we get anything done in this session of Congress? Obviously we’ve got an abbreviated legislative calendar with the elections coming up as always. You always have this short window because of elections. So what’s the good betting money here on what’s going to happen?

 

Caleb Watney:  Yeah. Congress — yeah, for congressional action in particular I’m not super bullish this Congress. I think any time you have divided government and especially such narrowly divided government it ends up making it hard to kind of get the majorities you need to actually pass substantive legislation. I think the best chance is maybe something that’s quite narrowly tailored and included in, say, the National Defense Authorization Act. This is kind of the big military spending bill that does pass every single year since there’s bipartisan agreement on that. 

 

We’ve been looking, and I know that there’s been some senators that have tried to introduce amendments that would try to tie pretty narrowly tailored ones that are focused on more visas for the defense industrial base that are trying to get into the NDAA. I think that’s faced some challenges, but that’s probably the best bet for this Congress. But I think realistically for more wholesale reform you’ll probably have to try to do something next Congress. And so we’re trying to set up some of the dominos now to see if we can make that more likely. But in the meantime, yeah, we’re continuing to push. And I think there’s actually real substantive progress that can be made and that I’m more optimistic about on the Executive side kind of over the next two years. 

 

Adam Thierer:  And are there any sort of wildcard ideas here? I know the states really have their hands pretty tied here, can’t do much relative to the federal government. Are there any other interesting ideas percolating out there, or are there any other countries that you feel are good models, that are doing a particularly good job that the United States should consider looking at? 

 

Caleb Watney:  For sure. So on the first question, some of our friends at the Economic Innovation Group, EIG, another thinktank that does really great work on high skilled immigration, has a pretty interesting proposal for what are called heartland visas. And so this is something that would require Congress, but it’s basically trying to decentralize or devolve some of the key questions around immigration to the states and be able to allow states to bring in specific kinds of talent that they feel like meet their regional needs. And so if an area in the Midwest says we’re really having a nursing shortage right now, they could specifically prioritize visas for nurses. Or if in another place it’s semiconductor manufacturing engineers, you could try to get those. And so I think it’s a really neat and interesting proposal and could maybe depolarize immigration along some margins, but it still would ultimately require Congress to act, which is just going to be, I think, a higher bar. 

 

In terms of other countries, definitely this is where the United States is increasingly kind of being left in the dirt if you compare the United States to some of our other industrialized allies. So Canada has a really interesting kind of system. They have a points-based system as you alluded to, and they’re actually taking a huge number of immigrants. They’re actually deliberately trying to poach. They just set up a new program I think in the last couple months where immigrants who are on the H-1B or who’ve failed to get the H-1B have now a special pathway to apply for residency in Canada. And I think within two hours the queue was basically absolutely overwhelmed because there were so many people that were sort of eager to find a way to stay in either the United States or Canada. 

 

So Canada’s definitely eating our lunch. Sometimes if you drive around Silicon Valley you can see billboards that advertise to founders and say, hey, are you having trouble hiring the skilled talent you need? Come move up to Canada. We’ll make it extremely easy for you to bring in your top engineers. And so there’s definitely this kind of geopolitical competition with Canada, and they’re eating our lunch to some extent. 

 

The UK has also been doing some pretty exciting things. I think a couple years ago they launched this global talent visa, which is trying to really be proactive about making it as easy as possible if you’re graduating from a top sort of international undergraduate to be able to come and move to the UK. You’ve also seen other countries in Europe, like Germany, sort of have much better policies. Australia’s also good on these counts. The United States is really the laggard. In some sense, we’re still coasting on that inertia where we have for a long time been the top destination by a lot of surveys of where skilled immigrants would like to move to. And that’s still the case, but you’re beginning to see the U.S. numbers dropping, other countries like Canada especially kind of soaring up.

 

 And then in terms of policies like our other kind of westernized industrialized countries are really getting very aggressive about recruiting talent. And this is to say nothing about China which has several programs, including the Thousand Talents program where they’re basically paying people who are Chinese nationals who have moved overseas to come back to China because they’re so aggressively trying to take talent seriously. And then they have sort of a mirror program called the Thousand Foreign Talents program where, again, they’re kind of aggressively recruiting scientists and professors that live in other countries to try to move to China. 

 

China’s big problem is that because they have less of a history of immigration, I think a lot of immigrants find it harder to assimilate or call China home. The United States is really unique that we’ve always been a nation of immigrants, and a lot of people from all over the world find it easier to integrate into our society. And so it’s really a shame that we have this huge natural advantage, basically our single biggest natural advantage on the international stage and yet we seem to be wasting it right now. 

 

Adam Thierer:  Yeah. No doubt. Well, Caleb, this has been excellent. Let me ask you to wrap up with three things. Number one, tell our listeners where they can find you and Institute for Progress online. Number two, tell them one or two really, really good papers you want them to check out when they find your work. And then third, if there’s anything you’ve got coming out that you want to flag for our listeners, do it here. 

 

Caleb Watney:  Absolutely. So on the first, you can follow me on, I guess, a couple of platforms. Who knows whether Twitter, or should I say X, is going to stick around? But I am on Twitter/X @calebwatney. Same on Threads, the other likely competitor. Online you can find all of our work. Our website is progress.institute. And so you can find all of our research papers and op-eds kind of there as well as keeping track of podcasts and other things that we do. So that’s a great source. We also have a newsletter which you can find on our website which sort of keeps you up to date on all of the various things that we’ve been publishing. Question two was what again? 

 

Adam Thierer:  Best paper for everybody to read or two. 

 

Caleb Watney:  Best paper, right. So there’s a couple I would call to. So my colleagues Jeremey Neufeld and Lindsay Milliken have both done some really good papers on this that we have on our website. One is called “STEM Immigration is Critical to American National Security.” And this is just chock full of really great stats kind of highlighting how important immigrants and international talent have been to especially the defense industrial base, just really trying to highlight this connection between international talent and U.S. national security. And so there’s tones of really great stats there. 

 

And then there’s also “Semiconductor Investments Will Require International Talent.” This was a piece that we wrote last year during kind of the CHIPS and Science Act. And it is unfortunately quite prescient, I think, in calling how sensitive this industry’s going to be to the importance of international talent and kind of really drilling into semiconductor manufacturing. And I think the recent reports from the Wall Street Journal make that look unfortunately quite prescient. Yeah. 

 

Adam Thierer:  Great. Well, Caleb, as always, thank you for joining me today. This has been a really informative discussion, and with that I’m going to turn it back over to Chayila to close us out. 

 

Chayila Kleist:  Indeed. Thank you both so much for being with us today and sharing your expertise and insight. It was an excellent discussion. We really appreciate you taking the time.

 

Conclusion:  On behalf of The Federalist Society’s Regulatory Transparency Project thanks for tuning into the Fourth Branch Podcast. To catch every new episode when it’s released, you can subscribe on Apple Podcast, Google Play, and Spreaker. For the latest from RTP, please visit our website at regproject.org. That’s R-E-G project.org. 

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