Obama warns against turning away the 'best and the brightest'

Without mentioning H-1B, Obama's says top foreign students should be welcomed in U.S.

At the White House jobs summit yesterday, President Barack Obama warned against closing the door on foreign students, calling them one of the country's "greatest competitive advantages."

It's possible, he said, that some of those who choose to stay in the U.S. could end up creating "extraordinary businesses" like Intel Corp.

Obama didn't mention H-1B visa specifically or cite any of the pending visa legislation in Congress on this matter, but in referring to foreign students as the "best and the brightest," Obama used a phrase widely repeated by H-1B supporters in defense of the visa, and by opponents as well, but with sarcasm.

Obama addressed the need to admit foreign students in response to a fairly broad query from a summit participant about the need to ease visa regulations for cultural and academic purposes.

"I think it is important for us not to get into a bunker mentality. That's not America's strength," Obama said, according to a White House transcript of the remarks. "Our strength has always been in saying yes to the rest of the world, inviting ideas and different cultures and commerce. We have not seen the same kinds of openness, I think, over the last several years that I'd like to see."

Addressing the issue of foreign students specifically, Obama said, that, "one of the great things about this country is we get the best and the brightest talent to study here, and once they study here they start enjoying the intellectual freedom and the entrepreneurship, they decide to stay, and they start new businesses. Suddenly you've got a whole new generation of folks who are creating Intel or other extraordinary businesses."

Obama added, "If those students start seeing a closed door, then we are losing what is one of our greatest competitive advantages."

Over the last two months, H-1B visa demand has been swelling again after lagging for several months. If demand continues to grow, the legal cap of 85,000 visas for the federal government's 2010 fiscal year will be reached in a matter of weeks, if not sooner.

H-1B visa demand typically tracks the economy's performance, and Friday's jobs report showing a loss of only 11,000 U.S. jobs in November, compared to 741,000 in January, may well explain why the pace of visa petitions has picked up. The White House called the November jobs numbers a "dramatic improvement" over recent months.

The increase in demand for H-1B visas may also be signaling renewed interest in offshore outsourcing by U.S. companies, and that could lead to domestic job cuts. Moreover, employers that have already cut U.S. workers may turn to overseas labor to help meet increasing demand, which in turn could increase demand for the visas by offshore companies.

At the same time, offshore outsourcing appears poised to pick up. A survey of 80 financial services firms conducted by NelsonHall, an outsourcing advisory company, found that that 37% of enterprises expect to increase their use of offshore outsourcers over the next year; offshore outsourcing activity had been relatively flat year over the past year.

Andy Efstathiou, director of the banking sourcing program at NelsonHall, said financial services companies need to increase their ability to meet transaction volumes while cutting costs.

Bank mergers are also leading financial services companies to send work offshore, at least temporarily, as they go through the process of integrating different businesses. Moreover, merger and acquisition activity also provides an opportunity to restructure processes so that some can be delivered remotely, added Efstathiou.

Copyright © 2009 IDG Communications, Inc.

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