In a startling move after only one week in office, President Trump signed an Executive Order last Friday limiting the movement of immigrants—including lawful visa holders—and refugees from seven predominantly Muslim countries into the U.S. In a statement, Evan Engstrom, Engine’s executive director, said “The executive order is both morally and economically misguided, and sets a dangerous precedent that signals to the rest of the world that America is no longer open for innovation.” Hundreds of companies and organizations released statements of their objection, including Google, Apple, AirBnB, Microsoft, the Internet Association, CCIA, CTA, and TechNet. As immigrants play an essential role in building and contributing to the success of American startups, we urge our fellow members of the startup ecosystem to sign our letter to President Trump to express their opposition.
The startup community is deeply troubled by the Administration’s decision to limit the movement of immigrants—including lawful visa holders—into the U.S. on the basis of religion and country of origin—a move that came with no forewarning and has engendered uncertainty for many people, including employees at America’s startups. The executive order is both morally and economically misguided, and sets a dangerous precedent that signals to the rest of the world that America is no longer open for innovation.
This week marked the five year anniversary of the Stop Online Piracy Act (SOPA) and PROTECT IP Act (PIPA) protest—a coordinated blackout of more than 50,000 websites meant to push back against the online censorship that the bills threatened. As Engine Executive Director Evan Engstrom explains in a new blog post, “the bills themselves would have allowed the government, at the behest of copyright owners, to blacklist and functionally deny access to websites accused of hosting infringing content, undermining the fundamental architecture of a free and open internet.”
On Friday, the White House released an advance copy of its final International Entrepreneur Rule, which will allow qualifying foreign entrepreneurs to build their startups in the U.S. The final rule will be published in the Federal Register today and will become effective on July 17, 2017.
Conversations about talent and diversity were once again at the forefront in 2016, with a heated Presidential election, bold actions by the Obama Administration around immigration and computer science education, and efforts by major tech players to diversify their workforces. The tech community and policymakers continued to search for solutions, and while 2016 didn’t unearth a silver bullet for fixing tech’s workforce and diversity issues, significant progress was made.
A Big Year for Startup Policy in 2016. The Startup News Digest will be taking a hiatus over the holidays, but you can still get your startup policy fill on our blog. Yesterday, we began publishing Year in Review posts on some of 2016’s most notable debates in tech and entrepreneurship. Watch this space for reports on capital access, intellectual property, net neutrality, emerging technologies, and more over the coming days. Thanks for all of your support in 2016, and we’ll catch you in the new year!
Join Us in Pushing Back Against the EC’s Copyright Proposal. Earlier this year, the European Commission (EC) published a dangerous copyright reform proposal that would require online portals to implement filtering technologies to proactively police their users’ conduct. If adopted, this proposal would have a devastating impact: raising the cost of operating an online platform startup to untenable levels, diminishing investment capital for new companies, and threatening to bankrupt existing portals. In an attempt to fight back against the EC’s proposal, Engine has drafted a startup sign-on letter to USTR, the Department of Commerce, and the State Department, urging leaders at those agencies to engage with the EU to push back against this new copyright regime on behalf of America’s startups. If your startup is interested in joining the letter, please email Emma at email@example.com.
Computer Science (CS) Education Week is an annual initiative that aims to get kids excited about computer science and inspire interest in technology careers—an effort that is more important now than ever. It’s no secret that demand for computer science professionals has skyrocketed in recent years. Virtually every industry has an increasing need for STEM workers, especially those with a background in computer science and coding. And yet, there is a growing gap in the availability of these skilled individuals. There are currently over 500,000 open computing jobs nationwide, but last year, only 42,969 computer science students graduated into the workforce. In fact, there are fewer students graduating with degrees in computer science today than there were ten years ago. Our workforce is woefully unprepared to meet the growing demand for IT professionals.
DC Grapples with IoT Cybersecurity. The Internet of Things (IoT) has grown exponentially in recent years: there are now approximately 6.4 billion internet connected devices worldwide, a number that is increasing by 5.5 million every single day. While the growing IoT holds tremendous potential, recent cyberattacks have left policymakers increasingly concerned over vulnerabilities in connected devices. On Tuesday, the National Institute of Standards and Technology (NIST) issued a set of guidelines on IoT cybersecurity, while the Department of Homeland Security (DHS) published its own policy principles for securing connected devices. The following day, policymakers on the Hill held a joint hearing to discuss security and cyberattacks on the IoT. There was consensus among panelists around the importance of standards and guidelines like those released by the Administration earlier in the week. However, there was disagreement over whether formal regulations are necessary. While one participant called for government intervention, Rep. Greg Walden (R-OR), who chaired the hearing, noted that regulations would be a "knee-jerk reaction" to recent attacks. We’re tracking.
For years, the startup and tech communities have been advocating for a pathway that would encourage the most promising immigrant entrepreneurs to start and scale their companies in the U.S. While no program currently allows for this, a recent proposal from the White House could change that. The International Entrepreneur Rule, proposed by the U.S. Citizenship and Immigration Services (USCIS) in August, will allow qualifying foreign entrepreneurs to live in the U.S. to build their startup for up to five years. On Monday, Engine and New York-based technology trade group Tech:NYC submitted comments supporting the rule and recommending a number of targeted modifications, which we believe will allow the Rule to have an even greater positive impact. You can learn more and read the full comments here.
At Engine, we’ve seen firsthand some of the extraordinary contributions that immigrant entrepreneurs have made to the startup economy. One-third of U.S. venture-backed companies that went public between 2006 and 2012 had at least one immigrant founder. Moreover, immigrant entrepreneurs started, in whole or in part, some of the most important technology companies of our time, including Google, Intel, Yahoo!, eBay, and WhatsApp. In fact, the United States was home to almost 2.9 million foreign entrepreneurs who generated $65.5 billion in business income in 2014.
The startup community has been fighting for years for reforms that would allow the world’s brightest innovators to start and scale their companies here in the United States. Engine welcomes the Department of Homeland Security’s International Entrepreneur proposal, which will allow talented foreign-born entrepreneurs to build their companies in the U.S., in turn creating jobs and driving economic transformation. Today’s announcement is an important step towards making our immigration system work for the 21st century innovation economy.
For years, the startup community has been calling for reforms to our immigration system that would allow immigrant entrepreneurs to build their companies in the U.S. It’s a no brainer, especially in light of the fact that more than half of the current group of U.S.-based “unicorns” (startups valued at more than $1 billion) have a foreign-born founder. While reforms in Congress have stalled, the Administration is proposing a new International Entrepreneur Rule that will allow foreign entrepreneurs to live in the U.S. for up to five years to help scale their business. To be eligible, the entrepreneur must have a 15 percent or greater ownership stake in the company and play an active and central role in its operations.
We’ve lamented again and again that the current patent system just isn’t working for innovators. There’s been lots of talk about ways to curb abusive patent litigation tactics, but efforts to push legislative solutions through Congress have stalled for the time being. Still, there are creative ways to combat troll tactics in the short-term. This week, Engine announced a partnership with the Electronic Frontier Foundation to Reclaim Invention. The initiative aims to address one of the unexpected sources of troll behavior: American universities. Did you know that universities often license or sell their inventions to patent trolls?
By June 2012, President Barack Obama and his Republican rival Mitt Romney had already received over $11 million in donations from tech industry workers. But these employees—“long a reliable source of presidential donations”—haven’t been as generous with the 2016 nominees. Hillary Clinton and Donald Trump have only received a combined $3.5 million from tech workers so far. And Trump is faring much worse than Clinton, having pulled in a mere $128,000 from 238 tech donors so far. That’s less than 6 percent of what Romney had raised from tech by this point in the race.
Back in May, regulation crowdfunding went into effect, allowing anyone to invest in a startup through an online platform for the first time ever. But, as Engine has previously explained, we’re skeptical about the extent to which this market will truly take off given the current regulatory framework. We welcomed the House’s passage of Rep. Patrick McHenry’s Fix Crowdfunding Act (H.R. 4855) last month, which makes a couple of fixes from the startup community’s wish list like permitting special purpose vehicles. But the bill was heavily amended before passage, and as Evan argues in Bloomberg this week, it is missing a number of the startup community’s desired changes.
Three weeks ago, Engine took a look at how the Democratic Party’s draft platform would impact the tech and startup communities. This week, the party released their final platform to coincide with the beginning of the Democratic National Convention (DNC). Building on their draft, Democrats committed to rolling out broadband to every American and added language around the deployment of next-generation 5G technologies and free, public Wi-Fi. Some changes were made around encryption as well. While the initial draft did not even mention the issue, the final platform pledged support for a “national commission” on encryption, an idea that has been championed by Sen. Mark Warner and Rep. Michael McCaul.
As the Republican National Convention kicked off this week, GOP leaders released the final draft of their party platform. The platform included a commitment to several issues important to the tech industry, such as expanding broadband access and pushing back against over-regulation, as well as a nod to startups and small businesses by supporting an expansion of tax deductions for startup and small business expenses. The GOP also reaffirmed their commitment to digital privacy rights and called for a resolution to the ongoing encryption debate, though they declined to take a firm stand on the issue. Unfortunately, the party reiterated their ardent opposition to net neutrality, and language in the platform on high-skilled immigration reform and LGBT issues will likely disappoint the tech community.
As the Republican National Convention kicked off this Monday, the GOP also released the final draft of their party’s platform. The platform, which was written with input from the party’s base sourced via www.platform.gop, included generous mentions of issues important to the startup community.
As the dust settles from last week’s stunning Brexit vote, the broader tech community, which staunchly supported remaining a part of the European Union (EU), is taking stock of the potential repercussions of the decision. While the United Kingdom (UK) and the EU still have to negotiate the exact terms of the deal (assuming the British can cobble together a new government committed to the Brexit), uncertainty surrounds several key issues important to the tech community.