Biden’s plan to ‘outcompete China’ requires more human talent

Last week, President Biden declared that the national strategy is to “outcompete China.” To facilitate that objective, U.S. officials are unsurprisingly imposing new restrictions on exports of key technologies, such as semiconductors. But to truly increase America’s technological edge over China, the Biden administration will need to make key reforms to high-skilled immigration.

One simple way to do this is by reforming the Optional Training Program (OPT), which allows international students to work upon graduation from a U.S. university. A 2008 rule by the Department of Homeland Security (DHS) extended eligible years of work for international students in STEM (science, technology, engineering and medicine) fields as a national security necessity. The accompanying report determined that “with their large and growing populations of STEM‐graduate scientists,” high‐tech industries in Russia, China, India and the Organisation for Economic Co-Operation and Development nations “now compete much more effectively against the U.S. high technology industry.”

Considering our renewed national strategy to advance technological innovation, it is now time to revisit reforms to the OPT program. Since its inception, the program has served as the primary on-ramp for highly educated international students who graduate from U.S. universities to enter the U.S. labor force. Over the decades, it has become a hub of scientific talent: About half of all international students are enrolled in STEM programs. International students are also overrepresented in graduate programs. For example, they account for 82 percent of graduate students in petroleum engineering, 74 percent in electrical engineering and 71 percent in computer and information sciences.

Some of these international students end up as cutting-edge entrepreneurs and innovators in the technology industry. Of all billion-dollar startups in the United States, 22 percent had at least one immigrant founder who first came to the country as an international student.

Since 1940, a 1 percent increase in immigrant college graduates as a share of the population has increased the number of U.S. patents per capita by 9 percent to 18 percent. Moreover, a 2018 Stanford University study on the contribution of highly skilled immigrants to innovation found that, although immigrants make up only 16 percent of inventors, they are responsible for over 30 percent of total U.S. innovation since 1976.

The OPT’s importance is plain to see. But the enrollment of new international students to the U.S. has been steadily declining since 2015. During the same period, international enrollment has been increasing to the United Kingdom, Canada and Australia. A survey of higher education institutions provides some insight into why this has been the case. In the survey, 87 percent of institutions indicated visa processes, delays and denials, 58 percent indicated that students were choosing other international universities and 50 percent of institutions pointed to the inability of foreign students to secure a job after graduation.

This is low-hanging fruit for the Biden administration. Regulatory reforms to the OPT program can undo the harm being done. Just as the DHS extended eligible years of work from one to three years for STEM majors, it can uniformly extend the three years of work for all international students, regardless of major.

This is also the standard in other Western countries. For example, the U.K. offers two years for undergraduates and three years for PhD graduates, and Canada offers three years for all graduates regardless of field of study.

Similarly, DHS can reform the OPT program by removing the requirement that international students must work in industries related to their field. Indeed, most college graduates work in a profession that is not related to their field of study.

It isn’t just strict requirements that make OPT a less attractive program. The significant role played by visa delays and restrictions can be addressed as well. The current processing times for an employment authorization card (EAD) at the California service center is 8.5 months for 50 percent of applicants. For some applicants, the waiting time is 14.5 months. The equivalent wait is under 56 days in the U.K. and 87 days in Canada. The DHS should fix this by streamlining the process to ensure that foreign graduates can obtain EADs in three months or less.

As we adjust to heightened competition with China, the Biden administration can get a head start by making simple and key reforms that will enable U.S. universities and companies access to the best and brightest high-skilled workers, wherever they happen to be in the world.

Liya Palagashvili is a senior research fellow with the Mercatus Center at George Mason University and co-author (with Jack Salmon) of the new study “Reforming Optional Practical Training (OPT) to Enhance Technological Progress and Innovation.”