There have been a lot of articles
recently about London overtaking New York as the world financial centre. This week's Economist
goes a long way towards explaining why.
...the national debate on immigration has recently acquired a bilious tone, focused overwhelmingly on the threat of illegal immigration. A country that has been built on immigrant labour is now building fences and demonising foreigners, almost as if it did not need them.
America also makes life difficult for them. Since the mid-1960s the immigration system has been skewed to uniting families rather than to attracting talent. And in recent years it has been driven by a combination of fear of terrorism and rising protectionism. In 2003 Congress reduced the number of H1B visas (temporary visas for highly skilled workers) from about 200,000—well below the number needed—to 65,000.
Potential graduate students and high-tech workers tell nightmare stories of waiting for months for the right bits of paper. And high-tech companies relentlessly complain about not being able to get visas for some of the world's best brains. A few attempts have been made to fix the system. Bill Gates and other high-tech barons have lobbied Congress to create a more flexible process and make it easier for foreign students to stay in America on graduation. But so far all attempts to sort out legal immigration have been swamped by Congress's inability to deal with the illegal kind.
America's legal immigration system is falling apart at just the time when talented foreigners have more choice than ever. Many other countries—including Australia, Canada, Britain, Germany and even France—are bending over backwards to attract talented people. European companies can easily draw on the skills of an entire continent, thanks to the free movement of labour there. At the same time the Indian and Chinese economies are booming. Indian companies such as Infosys and Wipro have California-style campuses, state-of-the-art equipment and generous pay packets (which, incidentally, allow employees to afford a house full of servants). American multinationals such as Microsoft are establishing research and development facilities across the developing world. Indians and Chinese were once willing to put up with any humiliation for a chance of a career in the United States. Now they have more and more choices back home........There are still good reasons for immigrants to put themselves through all this. America has the world's greatest universities and biggest opportunities for the truly talented. But American officialdom needs to stop thinking that people will tolerate any humiliation to work there. Uprooting yourself from your native culture is difficult enough, without having to deal with unnecessary bureaucratic obstacles. America also needs to realise what will happen if the immigrants stop coming. University departments will grind to a halt. High-tech companies will be starved of personnel. New York could find itself eclipsed by London as the world's financial hub.
The Americans could learn a thing or two from the British. In the 19th century, we were the richest most powerful nation on earth. But by the mid twentieth century, we were bankrupt and losing an empire we could no longer afford to maintain. And by the 1970s we were trailing Germany and France as an economic power. Britain learnt the hard way that if you get complacent, you end up getting left behind. It's by no means clear that America has learnt the same lesson.