The immediate outpouring of resistance against President Trump’s hastily drawn ban on travelers from seven predominantly Muslim countries was driven by moral, humanitarian and constitutional concerns.
Some business leaders have already rejected Trump’s move, including Starbucks’ Howard Schultz, Netflix’s Reed Hastings and Salesforce’s Marc Benioff. Amazon’s Jeff Bezos has said the company is working on a legal challenge to Trump’s ban. Some who were slow to do so are scurrying to catch up.
Now it’s time for executives, investors and entrepreneurs to take even more leadership in driving home the positive long-term economic and social impact of opening, not closing, U.S. borders. Immigrants are not a threat; they are America’s fountain of youth, talent, economic growth and global competitiveness.
By 2030 at least, countries will be competing to attract an energetic and talented global workforce motivated by dreams of a better life for themselves and their families. McKinsey has identified 180 ways countries can help migrants thrive and thus add at least a $1 trillion a year to the global economy.
With nine out of 10 migrants on the move voluntarily and for economic reasons, each migrant family is its own engine of growth. Canada, which admits more immigrants than any other rich country, focuses on employment and housing in the first year. Uganda grants freedom of movement and other rights including access to social services; only one percent of a half-million refugees are dependent entirely on aid.
The IMF says increasing the share of migrants in a population drives per capita GDP growth. Another report found a dollar spent welcoming refugees returns $2 within five years. Lowering barriers to human capital is a growth opportunity 10 to 100 times “larger than the gains from dropping all remaining restrictions on international flows of goods and capital,” saysMichael A. Clemens of the Center for Global Development. Migration’s effect on local employment and wages is largely negligible, though in the short-term there can be negative effects on native workers.
Investing with a migration lens
If they were their own country, migrants would be booming. The 247 million, or 3.4 percent of global population, that live outside of their country contribute 10 percent of global GDP, McKinsey reports. As Vice President-elect Pence heard the Hamilton cast sing: Immigrants, they get the job done.
Companies will compete to succeed in Migration World. Chobani hires refugees to make yogurt in New Berlin, N.Y. and Twin Falls, Idaho (and has drawn threats for it) and Ikea, through its foundation, houses 4 million Syrian refugees in Germany, Switzerland, Sweden and Greece. Serving this highly diverse, mobile and global market requires cutting-edge engineering and digital solutions.
“Migration lens” investors are building a pipeline of connectivity, digital identity, financial, education, health and government services. Companies like BanQu (digital identifications) Aid:Tech (intelligent vouchers), and these dozen startups are using software, smartphones, drones and blockchain technology to build a distribution channel in the ultimate global market.
“We can expect the tech industry to really have a pro-immigration stance. It’s absolutely critical for continued innovation,” Billy Alvarado, chief business officer at Stripe, the payments startup with a valuation of more than $9 billion, told Inc. magazine. Immigration “is something that we will always advocate for,” says Alvarado, who is from Honduras.
George Soros, who is investing $500 million in companies and projects that serve migrants and refugees, recently staked up to $50 million on Humanity Ventures, a partnership with Mastercard focused on education and healthcare for vulnerable, transient populations.
The hedge fund billionaire, of course, is the iconic bogeyman of the anti-globalists. But he’s legendary among investors for an earlier Big Short, against the British pound. With his bet on migrants, he’s betting on fundamentals and shorting the xenophobes. Savvy investors, take note.