When Amazon was seeking a location for its second corporate headquarters, many cities and states went to extraordinary lengths to impress the company.
Tuscon, Arizona, sent the company a 21-foot saguaro cactus. Representatives from Calgary, Alberta, spraypainted messages on the sidewalks around Amazon’s headquarters in Seattle. The mayor of Kansas City, Missouri, purchased 1,000 items from Amazon and left five-star reviews on each, all of them drawing attention to his city’s attributes.
Other communities offered more substantive proposals. An Atlanta suburb offered to give up 345 acres so that Amazon could found its own city. Many offered grants or tax incentives. New Jersey had what might have been the biggest deals: $7 billion worth of tax breaks.
In the end, Amazon went with Virginia, which offered a smaller package of tax breaks but something that the company found of greater value: Virginia promised to increase the number of computer science graduates it produces each year, with Virginia Tech’s new Innovation Campus in Alexandria (set to open this year) as the centerpiece. For Amazon, the availability of talent topped taxes as a selling point.
Virginia’s Amazon deal comes to mind as we watch Donald Trump’s new “first buddy” Elon Musk and his former adviser Steve Bannon go at each other — often profanely — over H-1B visas, which Musk says are essential for the growth of the tech industry and which Bannon says simply involve foreigners taking American jobs. (Not just Bannon, either: The Austin American-Statesman reports that Tesla is “reportedly” using H-1B workers to replace laid-off workers in Texas.)
Spoiler alert: We will not resolve that argument today. Instead, we’ll look at the context in which this dispute is taking place — and what that means for us here in Virginia.
Here’s the first thing to know: 72% of H-1B visas go to Indian nationals and 12% to Chinese nationals, with no other country’s citizens amounting to more than 1%.
The precise numbers for the top five countries over the latest one-year period available, according to the U.S. Customers and Immigration Services report:
India: 279,386
China: 45,344
The Philippines: 4,619
Canada: 3,852
South Korea: 3,603
Of those applications, 65% were for computer-related occupations. Architecture, engineering and surveying (that’s all one category) came in second at 9.5%.
Therefore, when we’re talking about H-1B visas, we’re primarily talking about Indian nationals in computer-related fields.
That raises a question: Why is there such demand from India?
The answer paints a picture of how the world is changing.
According to the National Academy of Sciences, India produces about 215,000 computer science graduates each year.
Meanwhile, the number of computer science graduates in the United States was 112,740 in 2022-2023, according to the National Student Clearinghouse, a repository of educational data.
That’s the math that matters right there, but let’s do some more.
For fiscal year 2023 (the most recent data available), the U.S. approved 386,318 H-1B visas, the lowest number in four years. Of those, 251,084 were in computer-related fields (that 65% figure).
Let’s assume we did away with all those and sent those workers back to their native countries: The United States isn’t graduating enough students to fill all those positions. True, there might be some unemployed or underemployed computer science graduates in the land, but from a sheer mathematical perspective, we’re not producing enough graduates to equal the number of H-1B visas just in computer-related fields.
Furthermore, some of those computer science graduates in the United States are international students, who presumably would need an H-1B visa to stay in the country and work, so the number of American citizens earning computer science degrees each year is somewhere south of that 112,740 figure.
I’ve not been able to determine how many of those 112,740 computer science graduates are international students, but a related figure is revealing: Before the pandemic, 72% of graduate students in the United States who were studying computer sciences were international students, according to the National Science Foundation.
Based on those numbers, we should not be surprised that tech companies are turning to overseas talent. Other countries are simply producing more computer scientists (just to pick out one field) than we are. In fact, based on those graduate student numbers, we’re helping those countries do so.
These trends are likely to continue.
More relevant facts: India has now surpassed China as the most populous country in the world, according to the United Nations.
India now has a population of 1.45 billion people. That’s 4.2 times as many as the United States, with our 345.4 million. India’s population is also growing faster than ours.
While a smaller percentage of Indian high school graduates go on to college than their American counterparts, the sheer size of the country makes up for that. India has more than 40 million college students, a figure expected to grow to 92 million by 2035, according to Statista. In the United States, it’s about 18.58 million, and American colleges are looking at an “enrollment cliff” as the number of people in the traditional college areas begins to decline after 2025 — a consequence of declining birth rates.
In the U.S., some colleges are closing — see my previous column on that — but in India, they’re opening. India now has more universities than any other country, according to Statista.
Furthermore, those students in India are more likely to study computer-related fields than their American counterparts: 12% in India versus 3% in the United States.
That matches an anecdotal experience I had many years ago when I was in college at James Madison University. I spent a semester studying abroad in London. Many of us frequented the Foyle’s bookshop on Charing Cross Road that at one time was said to be the largest bookstore in the world. We Americans gravitated to the floor with literature. Meanwhile, the floor with engineering books was jammed with students from Asia and Africa. Those students intended to go home and build their developing countries; we Americans were going to read poetry. Nothing against poetry, but it doesn’t pay the bills. (Trust me; I’ve found out the hard way.) Decades later, we’re seeing all this play out in these statistics.
All those new Indian universities may not have the prestige of ours — that’s one reason so many international students flock to American schools — and a study by the National Academy of Sciences found that graduates of U.S. universities had better skills. Nevertheless, the sheer weight of numbers means that the future global labor pool of computer scientists (and lots of other things) is going to have a lot more Indians than Americans.
The world’s top tech capitals
As ranked by Startup Genome. U.S. cities in bold.
- Silicon Valley
- London
- New York City
- Tel Aviv
- Los Angeles
- Boston
- Singapore
- Beijing
- Seoul
- Tokyo
- Shanghai
- Washington, D.C.
- Amsterdam
- Paris
- Berlin
- Miami
- Chicago
- Toronto-Waterloo
- San Diego
- Seattle
Meanwhile, here’s what we do have: We have the world’s technology capital in Silicon Valley — and lots of other tech cities that compete on a global scale. The nonprofit Startup Genome every year produces a ranking of the top cities for tech startups. Silicon Valley is consistently No. 1. In the most recent rankings, four of the Top 10 tech cities in the world are in the U.S. So are nine of the top 20. (Virginia has a piece of that because the Washington, D.C., metro is ranked 12th in the world.) India may now produce more computer scientists than the United States, but not a single Indian city ranks in the Top 20 — the top one is Bengaluru (formerly Bangalore), tied with Sydney, Australia, for 21st.
What we have here is a mismatch: The world’s top technology country (us) is not producing the most talent, while a country producing more talent is not represented among the top tech capitals. Over time, we can expect Indian cities to rise in those rankings; they will certainly have the talent pool. But American dominance in technology is also a magnet for talent — and American companies that compete on a global scale are naturally going to want to recruit on a global scale. We can argue about whether that’s good for America, but it’s certainly good for American companies. On the other hand, it does seem in America’s interest that we retain our leadership position in technology, although that’s going to be increasingly hard as the world’s talent pool broadens.
Here’s a useful analogy: professional sports.
At one time, American baseball teams were almost entirely American (and white Americans, at that). Last year, 27.8% of the players on opening day rosters were from outside the U.S., with 19 countries represented, primarily in Latin America.
The National Basketball Association is almost equally international. In the 1996-97 season, just 5% of NBA players were from outside the United States. When the current season tipped off last fall, the percentage was 27.7%, with players from 43 countries.
The same trends play out at lower levels of professional sports. The Blue Ridge Bobcats, a Wytheville-based minor league hockey team, fields a team where only 28.6% of the players are Americans. The other players hail from Canada (38.1%) but also the Czech Republic (14.3%), Belarus (9.5%) and Russia (9.5%).
Before she died, the conservative activist Phyllis Schlafly complained that only Americans should be allowed to play in an American-based league. That’s hardly the view of fans, who cheer the exploits of the Japanese baseball star Shohei Ohtani, a four-time Major League Baseball All-Star who last year became the first player to hit 50 home runs and steal 50 bases. Technically, Ohtani is taking the job from an American player, but no baseball fan would argue for that. American fans expect to see the best players available for their team and don’t care where they come from. That’s why, with the exception of soccer, the premier sports leagues in the world are in the United States.
Now, admittedly, other job sectors are different from entertainment. Not many of us can realistically expect to be a sports star, but we do expect Junior to be able to get a good job and might wonder why he’s not getting hired at Tesla. Still, the same principle applies. If American companies want to be the best in the world, they better have the best talent. Otherwise, some company in some other country might beat them out. You have to be in the United States to play at the highest level in most sports, but you don’t have to be in the United States to invent technology. As I write this, I’m listening to Spotify: That was founded in Sweden. This morning I had a meeting on Zoom, which is an American technology. However, before Zoom, there was Skype. That was founded in Luxembourg by entrepreneurs from Denmark and Sweden using software developed in Estonia. One of the most popular social media apps in the land right now is TikTok, which, as we all know, is Chinese technology. That brings us back to the question of what we’re doing to develop tech talent.
If we’re concerned about too many foreigners beating out American-born hockey players, then we better tell Junior to start lacing up his skates and get out there on the ice and, as the great philosopher Warren Zevon urged, hit somebody! If we want more technology workers, then we better get more people hitting those books in those fields — which is exactly what Virginia pledged to do when it lured Amazon.
Here’s where all this comes home: Amazon hires more people with H-1B visas than any other company in Virginia: 14,213, according to the U.S. Customs and Immigration Services. (That accounts for nearly 55% of the H-1B visa holders in the state.) Meanwhile, Virginia in 2023 produced 6,150 graduates (at all levels) with some kind of computer-related degree. Let’s assume that Amazon’s needs are constant (they’re not; the company is growing). You’d think over time that Virginia graduates would add up to what Amazon needs. However, not all those computer science graduates are going to work in Virginia. Not all of them are even staying in Virginia. The Census Bureau says that after five years, 38.5% of Virginia’s bachelor’s level computer science graduates have moved out of state. After 10 years, 43.1% have. At the master’s level, 45% have moved out of state within five years. After 10 years, 53% have. At the doctoral level, 76% are gone within five years.
To meet Amazon’s needs with strictly Virginia-educated talent, we’ll need a lot more computer science majors, especially when you figure in both Amazon’s growth rate (a 1.7% employment growth rate over the past year, according to the Stock Analysis website) and that “leakage” rate to other states. (Not to mention other companies in Virginia).
However, increasing the number of computer science graduates faces headwinds. First, there’s that looming drop in the number of traditional college-age students. Meanwhile, more Americans are starting to question whether college is worth it, particularly as costs rise. Reducing or eliminating H-1B visas won’t create more American graduates in computer science or related fields, so perhaps the question should be: What would? Lower tuition? Great, but who’s going to put up the money to make that happen? This seems like something of a “Sputnik moment.” In the late ’50s, Americans fretted that the Soviets were doing a better job educating their students in math and science. Nearly seven decades later, we have good reason to wonder whether that’s still the case — just with a different country.
The real question with H-1Bs isn’t really about visas, it’s about what it takes to maintain American dominance in technology. I’ve focused here on India, because that’s where the visa applicants are coming from. India may produce more technology-related graduates than the United States, but India’s not No. 1 — China is. A study by the Center of Security and Emerging Technology found that India now produces three times as many graduates in a wide range of technology fields as the U.S. does — but China produces 4.5 times as many. However, China, unlike India, has a bigger homegrown technology base to employ those graduates — and create companies to rival our own.
Last fall, on a visit to Virginia Tech, Sen. Mark Warner, D-Va., said: “We’ve never faced an adversary like China.” He wasn’t just talking about bullets and bombs. Or even China’s hacking skills. With the Soviet Union, we were up against a country with a strong military but a weak economy. Now we’re facing countries that have the population to someday build bigger economies than ours.
The debate over H-1B visas makes for good sound bites on TV and pithy posts on social media — but it’s really about something far more complicated than either Musk or Bannon makes it out to be.
The General Assembly convenes Wednesday
That will produce lots of political fodder for West of the Capital, our weekly political newsletter. You can sign up for that or any of our other free newsletters here:
