The Clouser Model of Entrepreneurial Brain Drain

In this post I will begin to elaborate on my model, formally named “The Clouser Model of Entrepreneurial Brain Drain in the Triple Helix”.

I thought it especially relevant to post following the recent activity around the introduction of the Startup Visa in the United States. I will discuss that as well, especially on its possible consequences on international venture capital and the draining of brains and talent from other regions. However, for the purposes of this writing, we can learn much from the motivations for the grassroots support and formation of this piece of legislation.  Much of the impetus for the bill was a shared frustration on behalf of angel and venture capital investors who wanted to fund start-ups led by students from top higher educational institutions. However, the restrictive immigration policy of the US Government made it impossible for these students to stay in the United States after graduation from their respective institutions. Thus they were forced to leave the Country and pursue their ventures elsewhere, or abandon them all together.

Basically, the Clouser model is concerned with the process of new venture establishment and growth by students at any level in higher education process. It is concerned with the barriers to new venture creation, especially those imposed by government policy, or effected by government policy.

The model is simple and looks like this:

ENTRY.  Students join the university — Students take entrepreneurship courses and/or are inspired by other activities —  Student Entrepreneurs desire to start new firms — Lack of early stage financing deters Student Entrepreneurs — and/or Visa restrictions impede their new firm creation  — Students leave country or abandon startup. EXIT.

The result of these impediments in the system is entrepreneurial brain drain.  Talented is wasted in the model, and job creation, economic growth, and further intellectual development and contributions to society are retarded.

This is a problem faced by many triple helix configurations, regions and nations throughout the world. For instance, I have observed it frequently in the last five years on the ground here in Scotland at the University of Edinburgh. A huge gap in the early stage financing of student-led ventures exists and continues to be ignored both by policy makers and leadership. New firm possibilities are thus abandoned. Visa restrictions, especially for those outside of the EU, lead other student entrepreneurs to either seek full time employment, or, more likely, leave the Country all together, choosing to start their firms elsewhere.

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