Our visa system is failing international graduate entrepreneurs

The Entrepreneurs Network has just released a new report. Based on a survey of 1,599 international students, Made in the UK: Unlocking the Door to International Entrepreneurs reveals how the UK’s visa system is failing international graduate entrepreneurs who want to start a business in the UK.

Undertaken with support from the Adam Smith Institute and in partnership with the National Union of Students (NUS), we find that a significant proportion of international students – that is students coming from outside the EU – have entrepreneurial ambitions. In fact, 42% of international students intend to start their own business following graduation. However, only 33% of these students, or 14% of the total, want to do so in the UK. Clearly we are doing something wrong.

The Tier 1 (Graduate Entrepreneur) visa was set up in 2012 to encourage international graduates to start their businesses when post-study routes were taken away. However, uptake has been woeful and the results of the survey suggest this isn’t likely to change any time soon:

  • Just 2% of respondents intending to start a business following graduation applied for the UK Tier 1 (Graduate Entrepreneur) visa, with almost two thirds, 62%, saying they didn’t even consider it.
  • Nearly half, 43%, of respondents think their institution is certified to endorse them for a Tier 1 (Graduate Entrepreneur) visa.
  • Only 18% think that the UK has better post-study processes in place for international students than other countries; 32% think it is worse than other countries.

Based on these and further findings, the report puts forward nine recommendations for government, including:

  • Removing the Tier 4 ban on self-employment for those working within an institutional programme (curricular or co-curricular) or other accelerator.
  • Allowing UKTI-approved accelerators to endorse international students in their programmes under the Tier 1 (Graduate Entrepreneur) scheme.
  • De-coupling the risk for educational institutions in endorsing international graduates for Tier 1 (Graduate Entrepreneur) visas from institutions’ Tier 4 license. This should be made explicit in the official Home Office guidance and in the way the Home Office applies its audit procedures for institutions.
  • Reinstating a post-study work visa, de-coupled from the sponsor system, to allow international students to explore markets and industry before finalising their business idea for the Tier 1 (Graduate Entrepreneur) application. In fact, 81% of the respondents considering starting their own business are interested in the possibility of permanent residency under the Tier 1 (Graduate Entrepreneur) visa.

Our visa system isn’t supporting the entrepreneurial ambitions of international graduates. As things stand, we are training some of the world’s best and brightest young people at our world-class universities only to push them to set up their businesses overseas.

Philip Salter is director of The Entrepreneurs Network.

Banning Blanc from Britain stifles free speech

Sky sources have learned the so-called pick-up artist Julien Blanc will not be allowed to enter the UK.

The decision to deny Julien Blanc’s entrance into the UK has set the precedent that freedoms of speech and expression can be criminalised, if and when enough people sign a petition.

Blanc’s comments are socially reprehensible and offensive to both men and women, but if we do not respect the rights of the offensive, we start risking the safety of any minority viewpoint.

Those upset by Blanc’s remarks have the opportunity to push back in cultural and social spheres; they do not need to call on the government to ban things they find socially disturbing. Private event businesses can take after EventBrite and deny him platforms, people can boycott his events, and viewers can turn their televisions off when he is on-air voicing his opinions.

The market has ways of listening to the moral needs of its customers, and while it is not a perfect system, it can serve to bankrupt those who are morally reprehensible without criminalising them for non-criminal behaviour.

Surely, we must recognise that there is a fundamental difference between the private sphere taking away one man’s platform to be noticed, and the state taking away every person’s platform to speak freely without threat of punishment or criminalisation.

This ruling should not just be a wake-up call to public hysteria, but also a reminder of how flawed the UK immigration system is. The Home Office can legally deny anyone entrance to the country if their character or opinions are not deemed conducive to the ‘public good’.

This is Big Brother at its worst – ‘protecting’ the people from speech criminals, who are a danger to the moral good; let any who speak out be at the mercy of mob rule, and the Home Office.

Just send money!

In an extremely rude thank you letter, Horrid Henry tells his Aunt Ruby that her (admittedly terrible) birthday present is rubbish and she should, next time, send him cash. Beneficiaries of anti-poverty programmes could be forgiven for saying the same thing to welfare authorities. Their schemes are expensive to administer, involve grand ideas, social theories and detailed plans, and yet their results are substantially worse than letting people live where they want to, or just sending them cash to alleviate their bad circumstances.

A new paper from the Institute for Fiscal Studies, by authors Laura Abramovsky, Orazio Attanasio, Kai Barron, Pedro Carneiro and George Stoye and entitled “Challenges to Promoting Social Inclusion of the Extreme Poor: Evidence from a Large Scale Experiment in Colombia” only adds to this literature. We can only be glad that the Colombian authorities thought to do a randomized and controlled pilot study, although perhaps they should have waited for its results to come in before rolling it out generally!

We evaluate the large scale pilot of an innovative and major welfare intervention in Colombia, which combines homes visits by trained social workers to households in extreme poverty with preferential access to social programs. We use a randomized control trial and a very rich dataset collected as part of the evaluation to identify program impacts on the knowledge and take-up of social programs and the labor supply of targeted households.

We find no consistent impact of the program on these outcomes, possibly because the way the pilot was implemented resulted in very light treatment in terms of home visits. Importantly, administrative data indicates that the program has been rolled out nationally in a very similar fashion, suggesting that this major national program is likely to fail in making a significant contribution to reducing extreme poverty. We suggest that the program should undergo substantial reforms, which in turn should be evaluated.

Really we ought already to have known this. Anti-poverty schemes seem smart but rarely or never report successes in randomised controlled trials unless they are cash handouts or removals of restrictions that were stopping people from generating wealth themselves (e.g. immigration liberalisation). But, as slow as academic progress works, it does seem like every extra contribution helps push the debate in the correct direction.

Would being more like Qatar be a good way of fighting poverty?

Eric Posner and Glen Weyl have a provocative essay in the New Republic this month arguing that massive guest worker schemes could help facilitate large numbers of immigrants from poor countries to come and work in the developed world. Their model is the Gulf States, which have enormous numbers of workers—85% of the population of the United Arab Emirates, for instance, are guest workers:

If the OECD countries copied the migration policies of the GCC countries, they would reduce global inequality by much more than their welfare systems do within their borders. For example, if OECD countries welcomed migrants in proportion to their GDP at the same rate and from the same poor nations as Qatar does, this would reduce global inequality by about twice the amount that eliminating all internal inequality in the OECD countries wouldand by twice the rate that taxes and transfers in these countries reduce global inequality. If they  adopted the same per-citizen rate at which the UAE takes migrants, they could accomplish much more. By taking in the 60 percent of the global population who make less than the bottom five percent in the United States and paying them $5,000 per year, the U.S. and Europe would reduce global inequality by roughly a third.

We citizens of OECD countries take pride in our political and civil rights, and our generous welfare systems. Yet we maintain our high standard of living by giving no rights and trivial money to people who live outside our arbitrary borders. While we fuss over whether we should raise or lower our marginal tax rates, we ignore the plight of the most desperate people in the world. And yet we are surprised that leaders of China and the GCC accuse us of hypocrisy when we criticize their records on human rights.

It’s a controversial idea. These schemes seem to address most of the intractable problems that people have with immigration—these guest workers cannot vote, their children do not become citizens of the states they are born into, and they have to return home after a certain period of time, so they can’t have the negative lasting impact on culture that some people say immigration will lead to.

But, as I and many other visitors to the Gulf have noted, the system feels almost like slavery. Indeed in cases where workers’ passports are confiscated it essentially is slavery. Posner and Weyl are not suggesting this, but their plan would bring the reality of global poverty right up to our doorsteps—provided they know what their lives will be like, we can assume they would be made better off by this, but many people would find actually seeing this kind of deprivation on a daily basis to be unacceptable. But whether we could tolerate this and whether we should tolerate it are two very different questions.

The deep web, drug deals and distributed markets.

On Thursday a conglomeration of law enforcement agencies including the FBI, Homeland Security and Europol seized the deep web drug marketplace Silk Road 2.0, just over a year after the takedown of the original Silk Road site. San Franciscan Blake Benthall was arrested as site’s alleged operator (under the alias ‘Defcon’), and charged with narcotics trafficking as well as conspiracy charges related to money laundering, computer hacking, and trafficking fraudulent documents. The authorities allege that Silk Road 2.0 had sales of $8million each month, around 150,000 active users, and had facilitated the distribution of hundreds of kilos of illegal drugs across the globe.

The bust formed part of ‘Operation Onymous’, a ‘scorched-earth purge of the internet underground’ which led to the arrest of 17 people, the seizure of 414 hidden ‘.onion’ domains, and the shutdown of a number of other deep web markets. Law enforcement unsurprisingly refuse to reveal how they managed such a raid, leaving to some worry that they have been able to bypass the protections of the anonymizing software Tor, which is used to access deep web sites and to obscure users’ identities and location.

Despite the success of Operation Onymous, many deep web markets remain online. Activists liken the shutdown of hidden marketplaces to a hydra: every time a site is taken down others spring up in their place, and thrive from the media publicity of busts. Indeed, the number of drug listings on hidden marketplaces has grown significantly following the takedown of the original Silk Road. Regardless, law enforcement is determined to stamp out the sites, with a representative from Europol warning  “we’re a well-oiled machine. It won’t be risk-free to run services [like these] anymore’.

But what if there was no-one responsible for running such services? Sites like the Silk Roads met their demise because they have a centralized point of failure — get to the server and you can seize the site. Allegedly, cryptographic chunks of Silk Road 2.0’s source code had been pre-emptively distributed to 500 locations across the globe, to enable the site’s relaunch in the case of a takedown. Given the far-reaching impact of Operation Onymous, whether this happens or not remains to be seen.

To be truly immune to government takedown, a marketplace would have to have a decentralized, distributed structure, much like torrent networks and the bitcoin protocol. Enter OpenBazaar, which uses peer-to-peer technology to bring ‘secure, decentralized  markets to the masses.’ In running the OpenBazaar program, each computer becomes a node in a distributed network where users can communicate directly with one another. A reputation system will allow even pseudonymous users to build up trust in their identity, and naturally, all transactions are done in bitcoin.

The biggest issues plaguing hidden marketplaces are those of trust and enforcement; if goods or payment fail to materialize, you can hardly just contact the authorities. Some sites get around this problem by offering an escrow service, with the money being centrally held until a buyer confirms their goods have arrived. The problem with this approach is that it leaves customer’s money vulnerable to scams, hacks, and state seizure. With a decentralized system like OpenBazaar, no such central escrow system is possible. Instead, buyer and seller nominate a third party ‘arbiter’ (who could be another buyer, seller, or a professional arbiter for the site) to preside over the transaction. Payment is initially sent to a multi-signature bitcoin wallet, jointly controlled by the buyer, seller and arbiter. Funds can only be released from this account to the seller when 2 of the 3 signatories agree to it, allowing the arbiter to adjudicate any dispute.

In such a distributed system, there’s no central body to authorize posts and transactions. There’s also no central server to target. Law enforcement would have to go after all buyers, sellers and computers running the OpenBazaar software to bring the system down.

OpenBazaar is still in beta mode, with a full release expected in early 2015. Teething problems are likely and the design could prove problematic; even within highly decentralized systems there’s a tendency towards the concentration of power, and whilst robust, decentralized networks are often inefficient and expensive to maintain. There’s no doubt the authorities are watching, though, and it will be interesting to see their reaction should OpenBazaar succeed.

The software is a re-work of the edgier DarkMarket concept developed at a Toronto hackathon earlier this year, and its developers are keen to highlight its use for selling things like outlawed books and unpasteurized milk over drugs and guns. Certainly, there’s value in any global bitcoin marketplace which avoids punitive exchange rates and transfer fees, and like the Lex Mercatoria, can be relied on to provide a level of transactional security when state institutions can not. However, whatever its legitimate uses no state will be comfortable with the idea of a censorship-proof site. The problem for them is that they might just have to get used to it.