India, explained.
Competition for top STEM talent will be stiff after the United States announced its $100,000 visa fee (Getty Images)
Highly skilled Indian workers will be looking elsewhere after Trump’s visa decision. This could be Australia’s moment.
Subscribe to The Informer for monthly expert analysis, and to Events for advance notice of visiting world leaders and distinguished guests.
You may unsubscribe from Lowy Institute newsletters at any time. For information on our privacy practices and how to unsubscribe, see our Privacy Policy.
US foreign worker visas: Where there’s crisis, there’s opportunityUS foreign worker visas: Where there’s crisis, there’s opportunity
The Trump administration’s move last month to make foreign workers prohibitively expensive for American companies could potentially be a boon for Australia’s STEM sector – as long as it plays its cards right.
About four weeks ago, the US government announced that it would significantly change the conditions attached to the H1-B visa, under which many foreign workers in the tech sector are employed, starting with a hefty fee of US$100,000 charged to employers for each visa. The move shocked India and its workers living in the United States, not least because of the lack of information provided. What seems clear to Indians, however, is that the United States no longer wants its high-skilled labour.
The H1-B visa is the passageway for many well-educated and experienced professionals, primarily from India, to the United States. A large percentage of the workforces in the tech, biotech and medical services industries are powered by these foreign workers. Without them, these sectors could stagnate, and even contract. Ultimately, what could be seen as a win for the MAGA base – fewer migrants from India in the streets of San Jose and Houston – could end up stifling innovation at a time when the United States needs it most. It’s a classic own goal.
The biotech and medical research sectors rely heavily on H-1B talent.
The motivation behind the move is unclear. It is not overreach to assume that it is a way to limit the flow of foreigners into the United States, but an equally plausible motivation is that it forcibly limits the exploitation of the visa and controls the cottage industry that has emerged in mass-scale labour force ill treatment. The visa category has an annual cap of 85,000, and there are currently around 730,000 H-1B visa holders in the United States. About 70% are from India, 14% from China, and the rest from elsewhere in the world.
They are unequivocally high earners. According to the American Immigration Council, a not-for-profit working to elevate migrant rights, the median wage of an H-1B worker in 2021 was US$108,000, more than twice the median wage of American workers in general, contributing around US$86 billion to the economy and generating around US$35 billion in taxes.
So what would motivate the Trump administration to make such a move? Surely the economic data outweighs the views of a rabble in fur caps and bald eagle t-shirts.
I have a few theories.
First, it could be a way of gaining leverage over the tech titans whose companies employ massive numbers of migrants. The fee is potentially a way to make sure the tech companies remain pleasant and compliant. Second, it could be about bringing the National Institutes of Health (US) into line. The administration has slashed funding to the NIH. The biotech and medical research sectors rely heavily on H-1B talent. Third, the aforementioned cottage industry hiring companies that apply for visa spots, hire staff, bring them to the United States and then effectively take a large slice of the remuneration pie will also be disrupted.
A large percentage of the US workforces in the tech, biotech and medical services industries are powered by foreign workers (Toon Lambrechts/Unsplash)
But where there is crisis, there is opportunity. Many Indian workers will now pivot towards Europe – the United Kingdom and Germany in particular – and elsewhere in Asia, such as South Korea, to pursue their fortunes. If Australia is serious about adding capacity to its tech, biotech, medical services and manufacturing sectors, it would do well to start scouting for talent immediately.
Australia already relies heavily on foreign-born labour in its science sector. According to the Office of the Chief Scientist, 57% of Australia’s university STEM-qualified labour force were born overseas. The Australian Academy of Science has called for barriers to be removed to allow for the arrival of more skilled migrants, the aim being to help build the sector and make it more globally competitive.
Australia’s science sector is coming off a low base. While there are mixed findings on how Australian innovation performs compared to other countries, it is generally agreed that Australia doesn’t have the graduates, students or even teachers to provide the necessary boost to the sectors. However, things are looking up in at least one sector – space innovation – where Australian and Indian companies are collaborating to produce the Optimus Viper, a spacecraft designed to service satellites, at speed and scale.
By making a concerted effort to attract top talent from India, Australia could find itself with a competitive advantage.
Yet competition for the required talent for such innovation will be stiff. Almost immediately after the United States announced its $100,000 fee, a number of countries moved to capitalise: South Korea started looking for ways to attract scientists and engineers from abroad, and the UK government was reportedly looking to abolish some visa fees for top global talent. Germany and other European countries are reportedly set to gain from US losses.
But a few things could play in Australia’s favour: language, for one, as well as the country’s relative safety (anti-migrant and anti-Indian marches notwithstanding) and political stability. Not to mention the weather, the beaches, and the ready availability of momos, the favourite snack food of most Indian university students.
To capitalise on the moment, Australia should be doing four things right now. First, heading to the campuses of the prestigious Indian Institutes of Technology (IITs), a network of public engineering and technology universities across India. They’re famously harder to get into than the Ivies, and graduates are usually hoovered up by US companies. Getting on the radar of graduates and junior students is a way to show that Australia is open for business. Second, making it easier for would-be migrants to actually migrate by removing unnecessary barriers, including those on universities, to recruit and hire foreign staff. Third, encouraging more innovation and more business in the form of targeted grants and loans that are available to non-citizens setting up tech companies in Australia. And fourth, working with state governments to ensure that Indian migrants are able to live in an environment of safety and security.
A buoyant STEM sector is a long way off, but by making a concerted effort to attract top talent from India, Australia could find itself with a competitive advantage. America’s loss could be Australia’s gain.
About the author
Aarti Betigeri
Aarti Betigeri is a multi-platform journalist and former foreign correspondent with a keen interest in India.
The most-pressing world events explained by Lowy Institute experts and global contributors, in your inbox, every Thursday.
You may unsubscribe from The Interpreter at any time. For information on our privacy practices and how to unsubscribe, see our Privacy Policy.
