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Human Capital Mobility during COVID – and the impact on biotech

J.P. Carroll
J.P. Carroll
September 1, 2021

COVID-19 has caused major changes to work, travel, and learning. Whether changes to visa policies impacting foreign workers or foreign students’ ability to study in the United States, the pandemic continues to impact the biotechnology sector.

Foreign workers’ jobs are unfilled

Visa holders have dealt with quite the rollercoaster in navigating changing regulations since the beginning of the COVID-19 pandemic. On June 22nd of last year at the height of the COVID-19 pandemic, restrictions were issued on visa holders – including holders of H-1B (highly skilled), J1 ( seasonal work done by college students and au pairs), and L1 (company employees transferring to U.S. offices) – making it tougher for U.S. companies to retain and attract foreign talent.

According to State Department data, H1B visas were down 94% to 7,696 in June through December last year from 130,112 over the same period in 2019. In addition, L1 visas were down 95% to 2,487 in June through December last year from 47,356 over the same period in 2019. While a stated goal of such visa restrictions was to increase employment opportunities for Americans and reduce foreign competition, U.S. firms have struggled to fill the jobs that were previously held by foreign workers.

The biotechnology sector in particular has benefited from foreign-born innovators since, “nearly 31% of lead inventors in biotech are foreign-born,” according to Nature Biotechnology. In addition, there are currently 132,307 foreign-born workers in the pharmaceutical manufacturing industry in the United States, which constitutes 24.8% of the industry’s U.S. workforce, per the bipartisan research and advocacy organization New American Economy Research Fund.

Looking beyond visa application data, more than 5 million essential workers are undocumented immigrants, says bipartisan immigration and criminal justice reform organization Most of these essential workers have lived in the United States for more than a decade and are employed in every state as well as the District of Columbia. Uncertainty over the future of immigration policy has a major impact on the ability to rely on these essential workers during the COVID-19 pandemic.

International students are returning – but more are needed

In 2020, foreign student enrollment dropped by nearly 20% in part as a result of the pandemic, and resulted in $9.5 billion in lost revenue. These foreign students are essential to funding undergraduate and graduate programs and research in the science, technology, engineering and mathematics (STEM) fields. According to the Congressional Research Service, 22% of STEM degrees are awarded to foreign students, including 54% of master’s degrees and 44% of doctorate degrees. Many of these students go on to work in the biotechnology sector.

70% of all international students in the United States are from Asian countries, and between COVID-19 visa restrictions along with rising anti-Asian sentiment during the pandemic, some have been considering taking their talents with them, back to their home countries. Nkarta Therapeutics President and CEO and BIO Chair Paul Hastings exclusively told BIO earlier this year that AAPI communities “are a major part of the [biotechnology] industry” and that it is of the utmost importance that the biotechnology sector “step up” and lead “by example” in confronting acts of hatred against AAPI communities.

The Trump administration issued a visa ban on Chinese STEM graduate students who attended certain universities which are suspected of enabling espionage that impacts U.S. national security. The Biden administration has kept this visa ban in place.

More than a third of foreign students in the United States were Chinese during the 2019 to 2020 school year and these students contributed $15.9 billion to the U.S. economy in 2019. In addition, 16% of STEM graduate students in the United States are from China and many are involved in cutting-edge research including in the biotechnology sector, which in turn creates jobs in the United States.

At this moment when biotechnology innovations are getting the United States and the rest of the world back on track, visa policies such as those limiting the studies of Chinese STEM graduate students may be counterproductive to U.S. biotech innovation. In addition, as Chinese STEM graduate students are turned away from the United States, many are deciding to stay home as Chinese universities have become more competitive with their research output and the opportunities they offer these students.

A short-term reality exposes long-term problems

As COVID-19 cases continue to rise because of the Delta variant and vaccine hesitancy, remote work is becoming the rule rather than the exception. According to a recent Growmotely survey, 97% of employees would rather not return to an office full-time and 61% actually prefer working in a totally remote setting. For employers to be competitive in an economy where employees often have their choice of employer, offering greater flexibility is key for firms to retain and attract top talent.

The ongoing labor shortage is one example of how existing human capital mobility issues have been made worse by COVID-19. Ultimately, this pandemic has shined a light on the need for immigration reform and the urgency of a conversation regarding workers’ needs.

When asked for BIO’s views on human capital mobility, Joe Damond, Deputy Chief Policy Officer and Executive Vice President, International Affairs at BIO stated, “We at BIO believe that the biotechnology sector is at its most successful when opportunities for innovation know no borders and therefore are not limited by visa policies which disincentivize research and collaboration.”