It might not be very long before Silicon Valley, Calif., starts to take on the characteristics of Shenango Valley, Penn., if state and national policies don’t change to encourage investment in manufacturing and high-tech production, says Hank Nothhaft, president, CEO and chairman of the board of Tessera Technologies Inc. of San Jose, Calif. Nothhaft was raised in Sharon, Pa., which is on the border of Ohio in the far western part of the state in the Shenango River Valley. Growing similarities between Silicon Valley and Sharon, Pa., have Nothhaft worried…
Highly educated first-generation immigrants, who constitute almost 50 percent of the CEOs and CTOs of new companies, are going back to their home countries. “It is now more favorable to do a startup in Communist China than it is in the heart of Silicon Valley and the greatest capital economy in the world,” says Nothhaft, a graduate of the U.S. Naval Academy and former officer in the Marine Corps.
There are immigrants at Tessera Technologies with Ph.D.s from American universities who have been in the United States for 20 years and are being lured back to China with subsidies and land grants from the Chinese government to start high-tech firms. These entrepreneurs “are retaining very high percentages of ownership and they become quite wealthy and have access to low-cost engineering talent,” says Nothhaft.
The reverse brain drain is being abetted by U.S. federal policies that make it hard for foreign students receiving advanced technical degrees to get permanent visas, even though they have skills that are in demand in Silicon Valley.
“My frustration is that very straightforward policies can solve this problem,” says Nothhaft. “They won’t avert all of it, but it would go a long way to alleviating it.”