Sixteen Percent Of High-Impact, High-Tech Firms Founded By Immigrant Entrepreneurs

Source: U.S. Small Business Administration

Sixteen percent of high-impact, high-tech firms have at least one immigrant founder, according to a study released today by the Office of Advocacy of the U.S. Small Business Administration. Although these firms are concentrated in states with large immigrant populations, in most other respects they resemble high-impact, high-tech firms founded by native-born entrepreneurs.

Moreover, these immigrant entrepreneurs are highly educated and appear to be strongly rooted in the United States. Roughly 55 percent of the foreign-born founders hold a masters degree or a doctorate. In addition, they are more than twice as likely as native-born founders to hold a doctorate. Furthermore, 77 percent of the foreign-born high-tech entrepreneurs are American citizens and, on average, they have lived over 25 years in the United States. Two-thirds of them received their college degrees here, as well.

“Immigrant entrepreneurs clearly contribute a significant amount to our country’s cutting edge high-tech firms,” said Shawne McGibbon, acting Chief Counsel for Advocacy. “This report outlines these contributions and delivers important new data about immigrant entrepreneurs.”

High-tech Immigrant Entrepreneurship in the United States, written by David Hart, Zoltan Acs, and Spencer Tracy, Jr. with funding from Advocacy, defines high-impact firms as those with sales that have at least doubled over the 2002-2006 period and which have significant employment growth during that time. The authors defined high-tech industries using research and development employment as a share of total employment as the key criterion.

+ Research Summary (PDF; 36 KB)
+ Full Report (PDF; 391 KB)

Venezuela's Drug-Trafficking Role Is Growing Fast, U.S. Report Says

By Juan Forero
Washington Post Foreign Service
Sunday, July 19, 2009

BOGOTA, Colombia, July 18 -- A report for the U.S. Congress on drug smuggling through Venezuela concludes that corruption at high levels of President Hugo Chávez's government and state aid to Colombia's drug-trafficking guerrillas have made Venezuela a major launching pad for cocaine bound for the United States and Europe.

Since 1996, successive U.S. administrations have considered Venezuela a key drug-trafficking hub, the Government Accountability Office report says. But now, it says, the amount of cocaine flowing into Venezuela from Colombia, Venezuela's neighbor and the world's top producer of the drug, has skyrocketed, going from an estimated 60 metric tons in 2004 to 260 metric tons in 2007. That amounted to 17 percent of all the cocaine produced in the Andes in 2007.

The report, which was first reported by Spain's El Pais newspaper Thursday and obtained by The Washington Post on Friday, represents U.S. officials' strongest condemnation yet of Venezuela's alleged role in drug trafficking. It says Venezuela has extended a "lifeline" to the Revolutionary Armed Forces of Colombia, or FARC, which the United States estimates has a hand in the trafficking of 60 percent of the cocaine produced in Colombia.

The report, scheduled to be made public in Washington on Monday, drew an angry response from Chávez, whose government has repeatedly clashed with the United States. Speaking to reporters in Bolivia on Friday, the populist leader characterized the report as a political tool used by the United States to besmirch his country. He also said the United States, as the world's top cocaine consumer, has no right to lecture Venezuela.

"The United States is the first narco-trafficking country," Chávez said, adding that Venezuela's geography -- particularly its rugged 1,300-mile border with Colombia -- makes it vulnerable to traffickers. He also asserted that Venezuela had made important gains in the drug war since expelling U.S. counter-drug agents in 2005, a measure the GAO says made Venezuela more attractive to Colombian traffickers.

"Venezuela has begun to hit narco-trafficking hard since the DEA left," Chávez said, referring to the Drug Enforcement Administration. "The DEA is filled with drug traffickers."

Sen. Richard G. Lugar (R-Ind.) commissioned the GAO study in February 2008, asking the nonpartisan agency to determine whether Venezuela was "in the process of becoming a narco-state, heavily dependent [on] and beholden to the international trade in illegal drugs."

In a statement about the GAO report, Lugar, the ranking Republican on the Senate Foreign Relations Committee, said the findings "have heightened my concern that Venezuela's failure to cooperate with the United States on drug interdiction is related to corruption in that country's government." He said the report underscores a need for a comprehensive review of U.S. policy toward Venezuela.

The release of the report is expected to provide ammunition to some Republican lawmakers who have criticized the Obama administration's efforts to reinstate the deposed president of Honduras, Manuel Zelaya, a close ally of Chávez. U.S. diplomats have said that despite his ties to Chávez, Zelaya should be returned to power to serve the six months left in his term.

A Democratic aide in Congress who works on Latin American policy issues suggested that the call for a review of U.S. policy toward Venezuela could interfere with Secretary of State Hillary Rodham Clinton's bid to improve relations with Caracas, which were badly frayed during the Bush years. "The administration inherited a messy bilateral relationship and deserves a chance to put it on a more even keel," the aide said.

The GAO report describes how cocaine produced in Colombia is smuggled into Venezuela via land and river routes, as well as on short flights originating from remote regions along Colombia's eastern border. Most of the cocaine is then shipped out on merchant vessels, fishing boats and so-called go-fast boats. Though most of it is destined for U.S. streets, increasing amounts are being sent to Europe, the report says.

The GAO contends that corruption in Venezuela, reaching from officers in the National Guard to officials in top levels of government, has contributed to the surge in trafficking.

In September, the Treasury Department's Office of Foreign Assets Control designated three Venezuelan high-ranking officials, all close aides to Chávez, as "drug kingpins" for protecting FARC drug shipments and providing arms and funding to Colombian guerrillas. They are Hugo Armando Carvajal Barrios, director of the military's Intelligence Directorate; Henry de Jesús Rangel Silva, head of the Directorate of Intelligence and Prevention Services; and Ramón Rodríguez Chacín, former interior and justice minister.

News of the GAO report came as Colombian officials in Bogota released an internal FARC video in which the rebel group's second-in-command, Jorge Briceño, reads the deathbed manifesto, written in March 2008, by the then-supreme commander, Manuel Marulanda. In the video, seized in May from a FARC operative and obtained by the Associated Press, Marulanda stresses the strategic importance of "maintaining good political relations, friendship and confidence with the governments of Venezuela and Ecuador."

Marulanda's letter also laments that a trove of internal e-mails, many of them compromising Venezuelan and Ecuadoran officials, fell into the hands of Colombian authorities that month. Briceño, reading the letter to a group of guerrillas in a jungle clearing, announces that among FARC "secrets" that were lost is information about the "assistance in dollars" to Ecuadoran President Rafael Correa's 2006 presidential campaign.

Venezuela did not immediately respond to the video. But on Saturday, Correa, an ally of Chávez, denied receiving campaign funds from the FARC and suggested the video was a "setup."

"There is a setup to damage the image of the country and the government," he said in a radio address.

How Peaceful Is Your Country?

By Esmé E. Deprez

July 14 - "It started as a question," says Australian entrepreneur and philanthropist Steve Killelea of the Global Peace Index, a survey he helped found three years ago that measures peace. The Sydney native was wandering through war zones in Africa in 2005 looking for business opportunities when the question struck him. "I was wondering what the inverse [of violence] looked like—what were the most peaceful countries? I searched the Internet and couldn't find anything."

The absence of any such information started to make Killelea ponder just how little the world knows about peace. Every country has some sort of Defense Dept. Schoolchildren the world over scour textbooks to learn about Roman battles and world wars. But while the situation is now starting to change, for the great majority of their existence major academic institutions devoted very little resources or time to peace studies.

Killelea, 60, is the founder of two global IT companies, Software Professionals (later acquired by BMC Software (BMC)) and Integrated Research (IRI.AX), the latter of which made him millions at its 2000 public offering, as well as a venture capital fund. From his business experience he knew that most of his colleagues in the investment world favor markets in stable, conflict-free countries. "But if you can't measure it," he asks, referring to peace, "how do you understand if what you're doing is helping or hurting?"

Survival Depends on It

So in 2007, Killelea, who the Sydney Morning Herald has called "the country's largest individual donor to overseas aid," released the Global Peace Index (GPI) for the first time. It is housed under Vision of Humanity, a Web site bringing together a number of his initiatives that research the role and impact of peace in the world, including the Institute for Economics & Peace and One Tree Films. "If you look at the major challenges facing humanity today, they're global in nature—sustainability, biodiversity, climate change, overpopulation," Killelea says. "Global peace is a prerequisite for survival in the 21st century."

The study seeks to inform not only public policy and nonprofits about global peace but also to educate businesspeople looking to explore and expand their investment strategies in emerging markets. The year-over-year analyses can help them identify new opportunities.

Vision of Humanity released its third annual GPI in 2009. Produced in collaboration with the Economist Intelligence Unit, it ranks the world's nations based on 23 indicators of the existence or absence of peace both within and outside a country's borders. The indicators use quantitative and qualitative data from the World Bank, various U.N. offices and peace institutes, and the Economist Intelligence Unit and are divided into three categories: five measures of ongoing domestic and international conflict, 10 measures of safety and security in society, and eight measures of militarization.

Good Government Helps

The final list, intended to reflect the state of peace for each nation in the past year (as opposed to historically), includes 144 countries in 2009 and covers almost 99% of the world population and 87% of the planet geographically. Five countries were added this year: Burundi (No. 127), Georgia (No. 134), Guyana (No. 97), Montenegro (No. 91), and Nepal (No. 77). Hong Kong, No. 23 in 2008, was dropped from the list due to its close relationship with China.

Perhaps unsurprisingly, the study finds that peaceful nations are characterized by qualities such as well-functioning governments, low levels of corruption, high primary-education enrollment, respect for human rights and tolerance, and freedom of the press. Yet the impact of peace on a country's economic prosperity reveals a very strong correlation between the two. "Economic modeling shows that peace is a causal or leading factor in economic prosperity," Killelea says. At the same time, however, countries such as the U.S. and China that have a large gross domestic product but rank low on the list show this is not always the case, and the study's future goals include further researching the historical and geopolitical reasons behind why these anomalies occur.

Killelea was struck by the study's finding that when these peace structures mentioned above are not present in a democracy, a people's response to an election can actually lead to increased violence. Recent clashes in Iran over disputed presidential election returns come immediately to mind as an example.

Downturn Bad for Peace

The study shows that for every 10 places a country climbs on the index, the GDP per capita rises by $3,000 on average. The lower a country is on the list, the greater economic benefit it experiences as it becomes more peaceful (and vice versa). The top five risers this year are Bosnia and Herzegovina (No. 50, up 23 spots), Angola (No. 100, up 16 spots), Republic of the Congo (No. 106, up 15 spots), Egypt (No. 54, up 13 spots), and Trinidad and Tobago (No. 87, up 11 spots).

While the world has become more peaceful in the past 20 years, the global economic downturn has not only wreaked havoc on markets worldwide but has also led to a general increase in violence. This is reflected in the index, Killelea says, in increases in political instability and violent demonstrations. His team calculated that in 2007, the violence cost the world $7.2 trillion, which he calls a "highly conservative estimate." According to the study's results, "Improving global peacefulness will help to avoid further economic loss and will also create an environment for enhanced future development."

Killelea, the initial funder of the study, now splits his time between charitable work around Africa and Asia and his venture capital fund and film company. "Very little research has been done on the impact of violence on industry, the economic impacts of violence, and the global benefits of peace," he says. "It's an area that needs much more study. If industry can work together with government to create peace, it could be the most effective way to increase revenue." This could mean serious financial benefits for countries like Sudan, Israel, Somalia, Afghanistan, and Iraq, which round out the bottom of the list as the least peaceful five.

U.S. Dragged Down by Guns

The study, compiled by more than 100 experts and researchers across the globe, found a striking correlation between attitudinal surveys—how citizens of other nations perceive a country, based on global polling data—and where a country actually falls on the list. "What that implies is that if a country wants to improve its international standing" and attract more business investment in the process, Killelea says, "it should become more peaceful."

Some countries that don't make BusinessWeek's slide show of the top 25 most peaceful nations include China (No. 74), Iran (No. 99), Mexico (No. 108), India (No. 122), North Korea (No. 131), and Russia (No. 136). Americans may be surprised to learn that the U.S. ranks 83rd on this year's list, behind Spain (No. 28), France (No. 30), the United Kingdom (No. 35), and Cuba (No. 68).

Killelea explains that the U.S.'s spot in the bottom half of the list is due to both internal and external factors, which are weighted 60% and 40%, respectively, for all countries. "The main thing that drags the U.S. down is its high percentage of citizens in jail, high homicide rate compared to other Western nations, and the high availability of guns in the nation. Statistics show that the availability of guns has a direct relationship to levels of crime," he says. The U.S.'s engagement in Afghanistan and Iraq and its general military engagement globally also pull it down, he says.

It's Just One Study

Of course, the rankings need to be taken with a slight pinch of salt. The absence of war doesn't guarantee prosperity. The world is not that simple. Ancient Rome and Imperial England did just fine despite centuries of self-imposed social oppression and foreign aggression. But what the GPI does emphasize is that perhaps the money and energy expended on nonpeaceful activities could be better spent improving the common weal. Or, as John Lennon put it, "give peace a chance."

Click here to see the world's 25 most peaceful countries.

Deprez is a reporter for BusinessWeek.

Unclassified Report on the President’s Surveillance System

(PDF; 2.6 MB)

Source: Inspector Generals of the Justice Department, the Defense Department, the Central Intelligence Agency, the National Security Agency and the Office of the Director of National Intelligence (via NY Times)

From New York Times story (U.S. Wiretapping of Limited Value, Officials Report):

While the Bush administration had defended its program of wiretapping without warrants as a vital tool that saved lives, a new government review released Friday said the program’s effectiveness in fighting terrorism was unclear.

The report, mandated by Congress last year and produced by the inspectors general of five federal agencies, found that other intelligence tools used in assessing security threats posed by terrorists provided more timely and detailed information.

Most intelligence officials interviewed “had difficulty citing specific instances” when the National Security Agency’s wiretapping program contributed to successes against terrorists, the report said.

While the program obtained information that “had value in some counterterrorism investigations, it generally played a limited role in the F.B.I.’s overall counterterro"