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Cutting immigration will hobble economic growth. It’s that simple. New research I have conducted with Citigroup suggests two-thirds of US growth since 2011 is directly attributable to migration. In the UK, if immigration had been frozen in 1990 so that the number of migrants remained constant, the economy would be at least 9 per cent smaller than it is now. That is equivalent to a real loss in gross domestic product of more than £175bn over 15 years. In Germany, if immigration had been similarly frozen the net economic loss would be 6 per cent, or €155bn.
These figures do not include the wider, long-term benefits of immigration, in particular the disproportionate contributions skilled migrants make to innovation and wealth creation.
Migration is risky and self-selects entrepreneurial people. In the UK, immigrants are twice as likely as British-born individuals to start their own business. In the US, migrants found about 30 per cent of all businesses, even though they are just 14 per cent of the population. Migrants also tend to be more successful in these endeavours. More than half of US “unicorns” (start-ups valued at more than $1bn) were founded by immigrants, as were 40 per cent of Fortune 500 companies. The same pattern repeats itself elsewhere.
In the US, immigrants are two to three times more likely than US-born individuals to start a company, create a patented innovation or win a Nobel Prize or Academy Award.
It can be a virtuous circle. Migrants are vital initial contributors to innovative and dynamic economies. Fuelled by access to global talent, these countries grow, and attract more migrants.
By IAN GOLDIN for FINANCIAL TIMES
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