Profile: America at the Crossroads; controversy of H-1B visa.(Broadcast transcript)

BRIAN WILLIAMS, anchor:

All this week here, as you may know, we've been taking a close look at the challenges for the changing American economy in our series we're calling AMERICA AT THE CROSSROADS. One of the big questions for the US is how to take advantage of the large number of foreigners who come here, get educated in our great colleges and universities, and want to stay here but can't. It's causing an expensive brain drain. Tom Brokaw back tonight with more on this. Tom:

TOM BROKAW reporting:

Brian, we hear a lot about immigration issues that involve workers who come here from Mexico seeking low-paying jobs. But in the high-tech world, there's another kind of immigration controversy. It involves the H1B visa. That's a permit allowing a limited number of highly trained foreigners to stay here for just a few years, even if they're successful entrepreneurs creating jobs. Critics, and there are many, say that restriction penalizes America and helps our economic competitors.

Look around the offices of SnapDeal, an online coupon business, and it's not hard to see all the signs of a thriving venture: a young staff full of drive and ambition; a tote board on the wall attracting new customers, one about every second. But SnapDeal isn't in Silicon Valley, it's in New Delhi.

Mr. KUNAL BAHL: Maybe we link up with vendors in each one of the cities.

BROKAW: Twenty-seven-year-old Kunal Bahl and his partner, Rohit Bansal, launched SnapDeal in February 2010. They're already the number one e-commerce retailer in India.

Mr. BAHL: SnapDeal is a very simple concept. Every day there's one very attractive deal. People come to the Web site, buy the deal, and then go use it at the merchant.

BROKAW: Bahl's company has created 300 jobs and counting. But he sometimes wonders, `What if?' What if the country where he got his education, at the University of Pennsylvania, where he helped start a company while he was still in business school, had let him stay in the United States?

Mr. BAHL: I put my chips in the American basket and said that, you know, let me--let me try my hand here.

BROKAW: But Bahl's visa ran out, and so he took his skills back to India.

The United States issues only 85,000 of the so-called H1B visas for highly skilled workers every year. These visas expire after six years. The San Francisco Bay area, the home of the Silicon Valley, Stanford and Berkeley; this has always been a magnet for the best and brightest from foreign lands, but now many of them are wondering why do US immigration officials make it so hard for them to stay?

Professor VIVEK WADHWA: We're strengthening our competitors, we're weakening ourselves.

BROKAW: Professor Vivek Wadhwa has been warning of a reverse brain drain for years.

Prof. WADHWA: There are a lot of very good human beings who are unemployed, who've lost their jobs, and it's easy for them to blame foreigners. What they don't understand is that people like me, when I came to this country, I came here to study. My first company created a thousand jobs, my second company created 200 jobs.

BROKAW: Wadhwa's research found that between 1995 and 2005, 25 percent of the startups in Silicon valley had a least one immigrant founder. And those startups created almost a half million jobs.

TEXT:

1995-2005

25% of startups immigrant founder

More than 450,000 jobs

BROKAW: US immigration rules are big roadblocks for the enterprising foreigners.

Mr. MARTIN KLEPPMANN (Rapportive Co-Founder): Everybody has stories to share about just quite how painful the visa process has been, to try and to quickly engage with customers, make sure that everything's developing, and at the same time you've got this huge distraction on the side worrying whether you're going to get kicked out of the country.

BROKAW: A gathering of young Silicon Valley entrepreneurs centered on their frustration over visas.

How many of you think that you'll end up back in your home countries rather than staying here because of a visa issue? Just show me your hands. A number of you will go back and take the jobs with you, in effect.

And immigration officials often don't even understand the technology business.

Mr. KLEPPMANN: In our case, we got a beautiful letter from the immigration service asking to prove that we had enough warehouse space to store our software inventory. We don't even have boxes of software. It's all on the Internet.

Ms. SAKINA ARSIWALA (Campfire Labs Co-Founder): Why deal with all this old-school immigration system? Just go where we are wanted.

BROKAW: Kunal Bahl went where he felt welcome, close to family in a newly vibrant India.

Mr. BAHL: There is no either/or relationship between the American dream and the Indian dream. They can both exist. It's just that the guys who are building the Indian dream right now could have been part of the American dream, too.

BROKAW: Brian, almost everyone agrees that we do need immigration and visa reform, but that is a hot button issue in Congress because of the undocumented workers at the bottom of the pay scale. Meanwhile, the US State Department is encouraging foreign entrepreneurs at its outposts around the world. And Kunal Bahl, that young Indian who went back home, is now thinking of opening a branch of his company in this country. Brian:

WILLIAMS: Wow. Powerful story. Heartbreaking at times. Tom Brokaw, thanks. Our series here will continue tomorrow night.

And when we come back tonight, something else is disappearing, one of the last surviving perks on an airplane.