Cullen: UNH’s Reluctant Chinese Export

The New Hampshire Union Leader originally published this column on May 25, 2012:

“Shaw” has the makings of a great American success story. The aspiring entrepreneur is about to graduate from the University of New Hampshire with a PhD/MBA and an innovative business idea that could create jobs and wealth for himself and his investors.

Know how chewing gum retains its flavor, or how nicotine patches secrete chemicals over time? Shaw’s business idea is an anti-fatigue lip balm he calls “WakUp” — think Chapstick with a kick — that releases an invigorating ingredient extracted from natural herbs. Say you’re tired driving at night. You’d stop for coffee, except that you want to fall asleep when you get home. If you applied the pick-me-up lip balm instead, you could wipe it off in your driveway, turn off the effect, and go to bed.

The idea won first place in the Nelson Poster competition, part of UNH’s Paul Holloway Innovation-to-Market business idea contest, and Shaw has submitted a patent application for his invention. U.S. consumers spend around $20 billion on coffee each year and hundreds of millions on lip balm. It’s not hard to imagine a multi-million dollar business growing out of Shaw’s idea, along with jobs in manufacturing, marketing, and distribution. This is how the economy grows, and it could all happen in the Seacoast.

Seacoast China, that is. Shaw is Shaojun Yao’s nickname, and thanks to the United States’s broken immigration system, Yao may end up taking his taxpayer-subsidized UNH doctorate back to China, open his business and create jobs there, and export his product back to the U.S. with the profits going overseas. He’d rather stay and do it all here.

Yao, now 34, had never been out of China before he arrived in Durham seven years ago. The chemical engineer had a low-stress job he liked at a state-owned steel manufacturer, where he’d already contributed to a patent and gained expertise in applied chemistry in an industrial setting. Talented, motivated and ambitious, he wanted to turn his ideas into products, and the “U.S. is a country that could make my dream become real.”

Yao heard about UNH from a friend. After a 12-hour train ride to Beijing to visit the U.S. Embassy, Yao obtained visas allowing him, his wife and son to come to the States so he could attend grad school. They’ve gotten by on scholarships and the money Yao earns as a teaching assistant — his wife does not have a work permit — but Yao needs to start earning to support his family, which has grown to include a daughter. She, an American citizen by birthright, would cost Yao a fine of thousands of dollars upon his return to China for violating that country’s one-child policy.

“I have a dream to start a business, but it’s very hard,” Yao says, speaking of the challenges any entrepreneur would face without needing to navigate immigration issues at the same time. His current student visa allows Shaw to stay in the U.S. for one year after completing his degrees. One year to obtain capital, get regulatory approval for his product, and start the business before returning to China. The regulatory hassle would be easier in China, but protecting his intellectual property would be harder; Shaw anticipates copycats would appear as soon as his product hit the market.

Green cards allowing permanent residency are subject to quotas, not market demand, and the process could take years. If an American firm such as Dow Chemical wanted to hire him it would have to prove it can’t find an American to fill the job and snag one of just 65,000 H-1B visas allotted to foreign workers each year. The annual quota is routinely filled after a few weeks or months; in 2007, they were all gone in one day. He could work for a U.S. firm in China, but it would mean less pay and setting aside his entrepreneurial dreams. Or he could turn to Canada or Australia, nations that make it easy for talented people like Yao to live and work.

UNH currently has 120 international PhD students, half of them from China. Wouldn’t it be better to import people like Yao permanently, instead of exporting their PhDs, their businesses, and their talent?

Fergus Cullen, a freelance columnist, can be reached at fergus@ferguscullen.com.

Author: Fergus Cullen

Fergus Cullen is a former chairman of the New Hampshire Republican Party (2007-2008) and an editorial page columnist for the New Hampshire Union Leader.

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