Travel Ban/Immigration Reform Creates Chilling Effect for Attracting Best and Brightest to the US
What happens when the opportunity to study or work in the US are no longer attractive to the most talented people around the globe? The 1million international students that come to the USA each year (contributing $32.8 billion to the US economy in the 2015–2016 school year) simply go elsewhere 👩🏻🎓👩🏽🎓 resulting in the US loosing this revenue and the marketplace for the best talent. As a career coach helping the most competitive graduate students select schools — this is a real question being asked by international students after Trump, Pence and Steve Bannon entered the White House.
GMAC (the organization that administers the GMAT admissions test for MBA programs) data shows two trends emerge as a result of the election and the travel ban 1.0 respectively:
Decline in actual MBA applicants to the US evidenced by drop in GMAT reports sent to North America by all test takers from 79.5% in 2016 to 77.9% in Jan 2017 (according to internal data)
43% of all International students -including those not from countries in the travel ban — said US elections made their decision of studying in the US less likely (according to February 2017 survey)
Financial Impact! $32.8 billion is a whole lot of 💰. To put it in context, this revenue stream is more than the annual revenue of 22 US States! Its fantastic that the US leads in university level education — a VERY competitive industry around the globe. US-based universities have earned this income mostly away from European Universities through years of dedicated effort to create the greatest educational institutions and ecosystems in the world, from Harvard to the competitive NYC hub of universities (Columbia, NYU, Cornell etc) to the best tech research/engineering (Stanford, MIT, University of Michigan) and MBA programs (Harvard, Wharton, GSB). Only a handful of international universities can compete.
Universities are a profit-making entity like any other business. They offer the best possible product through great professors, competitive curriculum, hands-on labs, sports, activities, global exposure, a strong alumni network and of course career prospects. Students are the customers 👩🏻💻👨🏻💻— as are student sources of funds including the US government, parents, private lenders and scholarship funds — and like any other US-based business a certain percentage of customers are international.
Unlike Facebook’s portable product available from any mobile around the world, Universities can expand abroad in very limited and expensive ways — NYU has invested heavily to set up in Abu Dhabi as Carnie Mellon has in Qatar and Australia. If this happens, the US stops being a leader in education instead giving this leadership position to a single brand — something not in National interests. Adding to the threats, are online education (MOOCs) that are serious contenders to lead in certain quantitative-heavy fields, a further challenge to question the need to be in the US.
We can quantify how much the US gets from each country:
For Arizona State University international students made up 11% or $123million of their revenues, and for NYU international students made up 26.3% or $438million — mostly from students from China, Middle East, India and Latin America. If you include grants NYU makes $1.2bn from its best in class international student body. This revenue is not automatic, as top students can choose where to attend. For example, a recent top admit was seriously leaning towards attending a school in London over Cornell after the election results and the rhetoric that followed.
The risk of loosing this revenue is real and its not because of universities’ own doing, but because of the US government imposing on their ability to operate in a free market — the bedrock of American ideals that look after National self-interest. Actions that do not match the speeches of US leadership, temporary travel bans and changes to skilled visa caps without a clear strategy as well as general public anti “immigrant” sentiment make international students question their safety, ability to learn alongside their US counterparts, and enjoy their experience. There is a huge mismatch at the top versus what goes on locally. In the 33 US states I have worked or traveled to, I can not think of one place that was not welcoming to learn from me or my foreign colleagues — from Idaho to Hickory, North Carolina. Social acceptance while challenging our differences — that we determine ourselves not told how to feel — is what makes America great.
Jobs! US universities provide around 3.2million jobs around the country👩🏻🏫👩🏽🏫👨🏼🔬👨🏻🔧. When customers (students) drop so do jobs. Less international students means a proportionate number of jobs lost. A 25% drop in international students translates to a potential 38,000 jobs lost by professors, clerical, sales, managerial, and service/maintenance employees. For these jobs to be lost only a portion of students from the Middle East and China (where 37% of students originate) need to opt for universities elsewhere. This can have deeper impact in states where universities are major employers — like for Arizona where Arizona State University is the 8th largest employer. Notably not in the top 25 countries are neither Russia nor Israel.
Doing what is best for America means making us competitive Globally! So why not replace spots that go to international students with US-based students? To stay competitive it’s not an option. Learning to negotiate and work for any business that competes, sources, hires, or sells internationally requires both hard skills (accounting, marketing, product development, global competitive practices, coding, etc) as well as soft skills (multi-cultural communication, cultural sensitivity, and leadership). Thats about every single company in the US and multinationals (Apple, Gap, ExxonMobil, Starbucks). Those soft skills come from interacting with people from around the globe to enrich perspectives from diverse points of view. The MBA programs — leading molders of top business leaders — acknowledge the single most valuable trait is a diverse class. Harvard and most top universities attract around 35% international students, this is a core competency required to rank highly among universities, London Business School’s 90% international student body is the leader already. Trump cabinet members have suggested limiting students from certain countries already reflected in the travel bans as well as upcoming changes to immigration policy, this takes away the ability for universities and employers to function without government intervention by impeding their ability to access and admit the top students regardless of home country — not such a free America.
Loosing the best minds from around the world is just bad business sense because it leads to talent drain of both top international students and US students who go elsewhere in the world. It can have catastrophic effects on American National interests to determine “the best” on anything other than merit — such as country of origin, sex, color or creed. In a recent letter Harvard President Faust stated:
Our robust commitment to internationalism is not an incidental or dispensable accessory. It is integral to all we do, in the laboratory, in the classroom, in the conference hall, in the world. It fuels the capacity of universities to spur innovation, to advance scholarship and scientific discovery, and to help address society’s hardest challenges. It is a crucial ingredient in making American higher education a singular national asset, the destination of choice for countless scholars and students whose contributions serve our nation and our world.
The USA will loose its edge in medical/tech/social/government policy/security& defense research and in particular in emerging areas including artificial intelligence and space exploration/development. This means going from being an ecosystem of invention and business leadership to one of being the follower and me-too copy cat products & services. I have lived in an emerging market for 5 years, I know what this is like and its not the direction we want to go. The job loses would be in the millions in the next 5, 10, and 20 years.
With a decrease in international students, our educational institutions become a lab to test the undoing of the American experiment. The deconstruction of what makes America Great, its diversity of thought, perspective, skills, value to other countries all created through diversity of people in and out of our universities. Every country around the world recognizes this crucial value, and it shows it by sending their best and brightest to study in the US… for now.
America currently leads in higher education and innovation — economic reports as well as the competitiveness report published by Harvard Business School strategy Professors Michael Porter and Jan Rivkin (my former professor) supports this. As American citizens we should look to work within a global community because this makes us MORE competitive (we create jobs and set trends) and safe (intelligence and allies). Loosing this competitive edge in education could be the beginning to an unraveling across any industry that operates or sources customers internationally. Travel’s $800billion and real estate’s $87billion contribution to the economy to name a few.