A new report shows how immigrants fueled regional inventiveness, bolstered creative momentum within their industries, and drove long-term technological growth.
President Donald Trump’s recent executive orders crack down on illegal immigration as promised. But his immigration and refugee ban, leaked draft orders, and the language of his top aides all suggest that he’s looking to go further, restricting the legal immigration of “high-skilled” workers as well. If these efforts succeed, it’s possible that America’s ability to innovate will take a hit, compromising the country’s technological edge and economic growth.
History provides some support for that argument. In a new working paper, University of Chicago economists Ufuk Akcigit and John Grigsby and Harvard economist Tom Nicholas examined the role that immigrants play in innovation. By matching U.S. patent data to local Census data between 1880 and 1940—what they call the “golden age of innovation”—they were able to quantify the significant contributions of immigrants to American technological progress. Broadly, they found that immigrants fueled regional inventiveness, bolstered creative momentum within their industries, and drove long-term technological growth.
“You’ve got these anecdotes like Alexander Graham Bell that give you an image of what immigrant inventors were like, but hopefully, the beauty of this paper is that we’re going way beyond those anecdotes,” Nicholas tells CityLab.
The paper first illuminates how immigrants influenced the geography of inventiveness. In states like New York and Illinois that had the highest per-capita patents in this time, around 20 percent of the population was foreign-born. In the states with the least, immigrants only comprised 2 percent of the population. This breakdown is particularly important because regions and technological sectors with higher patents see more economic growth, according to previous research by the same authors. There’s a couple of reasons for that. “One explanation is that immigrant inventors concentrate in technology areas that are already growing rapidly,” Nicholas says. “Independently, they fill gaps in knowledge.”
In other words, immigrants with big ideas flock to places and fields where their ideas are in demand. And when many of them work together, they influence each other, compounding the ingenuity in their own field and others, Nicholas explains. This “spillover effect” is the reason why some places become powerhouses of innovation and economic growth. Silicon Valley is the most obvious modern-day example.
Here’s a map from the paper, showing the state-by-state concentration of foreign-born inventors over the time period analyzed. Evidently, the Northeastern states (in dark orange) were replete with immigrants coming up with the next big thing. The Southern states, not so much—“perhaps because such places were less likely to be open to disruptive ideas and intolerant of social change,” the authors write. Even today, it’s not by accident that cities with a large number of patents—San Jose, Houston, Seattle, New York, Chicago—contain large immigrant populations.
But Nicholas and his colleagues didn’t stop there. They also found that immigrants made up a higher share of the inventor population (around 20 percent) than the non-inventor population between 1880 and 1940. And among immigrants, Europeans were the most dominant group, which makes sense given the strict restrictions on immigrants from Asia and and the Middle East at the time. (Around 30 percent of today’s inventors are immigrants, largely hailing from India and China.)
Immigrant inventors, on average, were also more productive—with 9 percent more patents through their careers than their native-born counterparts. Despite their higher patent yield, they were paid 5 percent less. The mismatch between wages and relative productivity suggests labor market discrimination.
Despite barriers, the contributions of foreign-born inventors have provided a long-term boost for American innovation. A rise in foreign talent between 1880 and 1940 by a certain amount was associated with a notable increase in all patents and citations in the following six decades. Bringing in new ways of thinking during the 1900s had a ripple effect on technological advancement all the way to the year 2000.
It’s ironic, then, that a president who campaigned on a pedestal of economic anxiety, pledging to make the country more competitive, is seeking to severely restrict immigration. This paper supports the case tech companies are making against that agenda: that it stands to threaten the future of American inventiveness. With fewer immigrants, Silicon Valley may no longer be able to maintain its primacy as a global tech hub. Vancouver, in immigrant-friendly Canada, on the other hand, will be well positioned to soak up the world’s biggest talent.