One idea is to attract more immigrants. The EB-5 visa program is moving along in Wooster, Ohio, though not without challenges:
Wooster Growth members Justin Starlin and Andrei Dordea recently traveled to Washington, D.C., to meet with public officials to speak in favor of the program's extension.
"We made some decent contacts," Dordea said. "Actually, we met the gentleman in charge of the Vermont EB-5 program, who happens to be from the Canton area. Sometimes it's difficult to get a lot of information because there is so much money invested in these (applications), but it was worth our while to go there."
If approved, Wooster Growth initially was going to collaborate with the Cleveland Council for World Affairs for the administration of the program, but after the CCWA balked at helping fund any of the up-front costs, Broehl said the administrative work will be done in-house.
All of the above on top of a 700-page application borders on the absurd. Kudos to Wooster for taking on the Herculean task. The resources necessary to launch an EB-5 visa program are considerable. Will the benefits outweigh the costs?
Dr. Scott Shane answers in the negative:
Interventions to enhance immigration to the region would increase the number of venture capital backed start-ups and companies with external equity financing in the region; however, these interventions are more costly than other ways to increase “attractive” entrepreneurial activity.
"Other ways" that concern talent are as follows:
Some observers argue that interventions to attract venture capital-appropriate entrepreneurial talent to the area would increase the level of “attractive” entrepreneurial activity in the region. Because it takes a long time to grow this type of talent organically, interventions to attract venture capital-appropriate entrepreneurial talent from places like Boston and Silicon Valley, where such talent is more plentiful, would be a more effective way to increase our stock of talent than by growing it.
Another cost that the report does not discuss is the leakage of talent that is homegrown. As I've often commented, better education increases the likelihood of talent leaving the region. Therefore, attracting established entrepreneurial talent is even more cost effective. During my trip to Pittsburgh, I spoke with some representatives of venture capital and they highlighted the deficiency of entrepreneurial talent as the greatest drag on the startup economy in the region.
Increasing immigration is great if the region can do so on the cheap. On that score, the EB-5 visa program doesn't look to be the answer. However, an entrepreneurial talent network connected to the homeland thanks to a shared heritage could provide the missing piece for places awash in ideas such as Pittsburgh. Globalscot is a model of just such a network:
The Globalscot network harnesses the expertise of over 900 senior, influential business leaders who are committed to generating opportunities for Scotland. Globalscot members have signalled their willingness to help develop the Scottish economy through offering their time, expertise and contacts.
Appropriately, Wooster benefited from the EB-5 visa expertise of a person native to the region now working in Vermont. That connection is an excellent example of how a Cleveburgh version of Globalscot could benefit the Tech Belt. However, the reluctance of the Cleveland Council for World Affairs to share in the risk and the negative reaction to PNC's purchase of National City demonstrates how far the area has to go in generating the requisite trust.
Expatriates would appear to be less encumbered by the stifling parochialism crippling the Rust Belt.