FORTUNE -- In America's battle to keep the foreign entrepreneurs it trains, Massachusetts Governor Deval Patrick has thrown down a massive gauntlet.
Announcing a broad economic growth package last week, Deval introduced what he's dubbed the Global Entrepreneur in Residence (GER) Program. The proposal: Foreign students who attended colleges and universities in Massachusetts and are interested in staying in the state as entrepreneurs can apply to enroll in the GER program that will be administered by the Massachusetts Tech Collaborative, an independent state agency aimed at developing technology in Massachusetts. Mass Tech will then place selected individuals at participating public and private universities in the state, where they will work part-time and apply for visas that will be sponsored by their new employers.
The GER program is one way Massachusetts can "accelerate [its] job and wealth creation," Patrick, a Democrat, said in a statement. Greg Bialecki, Patrick's secretary of housing and economic development, told Fortune on Friday that "the drive behind this idea was international students who've come to Massachusetts; they've spent their school years here and want to stay here." At present, there are 46,000 foreign college students enrolled at institutions in Massachusetts, he says.
Patrick's plan is simple enough, but addresses a critical problem facing the startup community and the economy as a whole: how to get foreign-born, U.S.-educated entrepreneurs to stay in the country.
Under current immigration law, foreign students can attend U.S. colleges and universities with a student visa, but once they graduate, they must find an employer to sponsor them for an H-1B visa designated for skilled foreign workers to stay in the country. The H1-B system disfavors entrepreneurs because, unlike the Microsofts and Facebooks of the world, startups typically don't have an army of lawyers specially trained in immigration law. And the visa application requires a distinction between the employer and the employee; at startups, those are often one and the same.
The visa application also requires that the employer prove that the sponsored employee is receiving the industry's prevailing wage, but oftentimes a startup founder is not paying himself anything and is instead working for a stake in future earnings, says Neil Ruiz, an associate fellow at the Brookings Institution's Metropolitan Policy Program.
These factors are made all the more complicated by the limited number of H-1B visas available to private employers and the once-a-year application process. The United States Citizenship and Immigration Services announced on April 7 that it had received enough H-1B petitions to fill its 85,000 visa spots just five business days after it started accepting 2014 applications.
Patrick's proposal -- which will likely gain support from the state's Democrat-controlled Senate and House -- is aimed at making the visa process easier for entrepreneurs by getting around the H-1B cap through a loophole in the system. Institutions of higher learning are exempt from the H-1B visa cap and can apply for visas for their employees at any point throughout the year, which means foreign graduates who are employed by higher-ed institutions through Massachusetts's GER program would, in theory, have a much better chance of securing a visa then they would if they applied for one as part of the private sector.
The one question the GER program raises is whether a part-time employee fits the USCIS's definition of being affiliated with a university, which must be met in order for foreign grads to apply for cap-exempt H-1B visas, says lawyer David Grunblatt, head of the immigration and nationality group at law firm Proskauer Rose. Patrick's idea will "force the USCIS to put its money where its mouth is," says Grunblatt. "It's given a lot of lip service lately to being pro-entrepreneur, but when you dig down into the regulation, it's not as easy as it sounds." An official from the Department of Homeland Security, which oversees the USCIS, told Fortune on Tuesday that there's no requirement for an individual seeking a visa to be a fulltime employee in order to receive a cap-exempt H-1B from a university, though the petition must also meet the standards of the Labor Department's labor certification, which ensures that immigrant workers are not displacing U.S. workers. The White House declined to comment.
Secretary Bialecki, for his part, insists that the GER program fits squarely within existing immigration law. And he says that universities have expressed interest in participating, which is vital to the program's success. He said the University of Massachusetts is the only interested institution he could name publicly.
On the surface, there doesn't appear to be a clear incentive for universities to take part in the program, since, according to Bialecki, they will have no rights to the technology the entrepreneurs in residence develop during their free time.
But the entrepreneurs in residence that the UMass system plans to hire part-time will contribute to the university by spreading "entrepreneurial knowledge and spirit to [its] students and faculty," says Julie Chen, vice provost of research at UMass's Lowell campus. She said the entrepreneurs' primary responsibly will be to mentor students who are interested in starting their own companies, though entrepreneurs with high-tech backgrounds may be asked to take on tutoring roles as well. The program also serves as a way for the university to retain the talent that it helped foster. "To educate a huge number of foreign students and then send them away seems like a huge waste," Chen says.
Patrick has requested $3 million from the state to start the program, according to Bialecki. Chen expects that the state would provide funding to launch the program, and then a university would look for sources of sustainable funding from donors. "The same sort of folks who support incubators and business plan competitions," she says.
In addition to addressing the exodus of entrepreneurial talent from the U.S., Patrick's proposal fills a gap left by a lack of movement on immigration reform at the federal level. An immigration reform bill that passed the Senate in June is now stalled in the House. The bill includes a provision that would create a new class of startup visa for foreign entrepreneurs and would increase the number of H-1B visas available to immigrants with advanced degrees.
Federal immigration reform, of course, would have a much larger impact on the problem and could free entrepreneurs up to focus on their ventures. Patrick's proposal ties these workers to colleges and universities indefinitely. "It's sort of a gilded cage," says Grunblatt. "It works fine as long as you are associated with that particular entity. However, if you want to move to another business, you have to go back into the lottery."
As the economy improves and federal unemployment and foot stamp benefits are cut, dollar stores get dinged.
FORTUNE -- It's a rough retail environment out there, even for the least expensive of goods.
On Tuesday, Family Dollar (FDO) announced that its profits had declined 35% in the second quarter as comparable store sales fell 3.8%. Its profit of $90.9 million, or 80 cents a share, missed analyst estimates of 90 cents. In connection MOREClaire Zillman, reporter - Apr 11, 2014 5:00 AM ET
More than ever, a CEO is a brand unto him or herself; a brand that undoubtedly melds with the image of the company itself. If the two don't mesh, it can spell disaster.
FORTUNE -- Mozilla received an ugly reminder last week that the CEO title might as well be swapped with CBO -- chief brand officer.
Here's a recap: Shortly after taking over as CEO of Mozilla, the open-source computing company known for its MOREClaire Zillman, reporter - Apr 9, 2014 3:42 PM ET
A growing number of managers have come to the conclusion that paying more pays off -- especially for larger and more complex projects.
By Vickie Elmer
FORTUNE -- For years, companies looking to outsource labor have opted for the lowest bidders, seeking freelancers and independent contractors in India, Vietnam, and other low-wage countries via matchmaker websites and local recruiters. One site even promised all projects would cost $5 or less as the race intensified to control MOREApr 9, 2014 11:46 AM ET
Law school deans' cost-cutting efforts are colliding with decades of strong job protections for professors.
By Elizabeth G. Olson
FORTUNE -- It runs like clockwork: When businesses run into trouble, managers move to reduce salaries and expenditures. If only it were that simple for the multimillion-dollar law school industry, which is up against the wall trying to balance plummeting budgets while maintaining employees' academic freedom.
Law school deans' cost-cutting efforts are MOREMar 27, 2014 12:14 PM ET
Big, transformative strategies create buzz, but a new book contends the real money is in the everyday stuff that most companies overlook.
FORTUNE -- Early on in Low-Hanging Fruit: 77 Eye-Opening Ways to Improve Productivity and Profits, co-authors Jeremy Eden and Terri Long quote Warren Buffett: "I don't look to jump over 7-foot bars. I look around for 1-foot bars that I can step over."
Those small steps to greater efficiency, and fatter MOREAnne Fisher, contributor - Mar 27, 2014 5:00 AM ET
As the drugstore chain plans to shutter 76 locations, some of which are very close to other Walgreens locations, it's worth asking, why were these stores opened in the first place?
FORTUNE -- In retail, being your own worst enemy isn't always a bad thing.
On Tuesday, Walgreen Co. announced plans to close 76 unprofitable drugstores by August.
The Deerfield, Ill.-based company, which reported that its second-quarter net income inched down from $756 MOREClaire Zillman, reporter - Mar 26, 2014 5:58 PM ET
Secondhand stores are among the very few businesses that have grown during Spain's long economic crisis.
By Ian Mount
FORTUNE -- The display window at the Cash Converters branch on Barcelona's toniest shopping street, the Passeig de Gràcia, features everything from a child's guitar to bolt cutters, and on a recent Monday afternoon, the secondhand store was filled with browsers.
Jaime Antonijuan was looking at a bike, but he often shopped at MOREMar 26, 2014 12:24 PM ET
To build organizations that are adaptable at their core, we will need to rework every management process so it enables, rather than frustrates, breakthrough thinking and relentless experimentation.
By Gary Hamel
(TheMIX) -- The organizations that survive in the coming decades will be those that are capable of change as fast as change itself.
Today, few organizations seem to be able to out-run change for more than a few years at a time. MOREMar 26, 2014 10:26 AM ET
D.C. court judges will hear arguments on Tuesday over whether the federal government can offer subsidies to low-income Americans in states that opted out of Obamacare's health insurance exchanges.
FORTUNE -- On Tuesday morning, all eyes will be on One First Street in Washington, D.C., where the U.S. Supreme Court will hear arguments from Hobby Lobby and Conestoga Wood Specialties Corp. that, because of religious principles, they should be exempt from the Obamacare requirement MOREClaire Zillman, reporter - Mar 25, 2014 9:52 AM ET
|Oklahoma bans local minimum wage increases|
|Fears grow over China property flameout|
|How Zuck met Oculus: Facebook's big bet on virtual reality|
|Premarkets: Stocks get a boost from earnings, China GDP|
|China GDP slows to 7.4% in first quarter|