U.S. immigration rules blamed for tech brain drain

* Engineers, scientists leave amid long waits, uncertainty

* Silicon Valley politicians, businessmen call for change

* Congress leaders meet Obama on immigration this week

By David Lawsky

SAN FRANCISCO, June 23 (Reuters) - Silicon Valley is facing a brain drain of high-achieving foreign-born students, more of whom are leaving in the face of a chilly local immigration environment in a trend experts say will hurt U.S. high-tech industry competitiveness in the long run.

A more attractive employment environment overseas and a bad local economy are increasingly prompting graduates to head home in search of rosier prospects. This is depriving the Valley -- often called the cradle of global tech innovation -- the fresh blood it needs to remain at the vanguard of hot new industries such as clean technology.

"I believe we are going to innovate our way out of the economic woes we have, and in order to do that you need innovators," Representative Zoe Lofgren, a California Democrat who chairs the House Judiciary immigration subcommittee, said by telephone.

"It means not sending out people who are innovators who want to become Americans," said Lofgren, one of the congressional leaders who will meet this week to discuss the matter with President Barack Obama.

More than half the start-ups that emerged from 1995 to 2005 in Silicon Valley -- the area near Stanford University in Northern California that spawned the likes of Intel and Apple -- had a founder who was a foreign-born national, according to a 2007 study by Duke University professor Vivek Wadhwa.

But many foreigners now face a long wait for permanent residence and have come to believe that will never change.

Ken Wilcox, president of Silicon Valley Bank in Santa Clara, said the United States now faces an imperative to help talented foreigners stay.

NOT ENOUGH U.S. SCIENTISTS, ENGINEERS

"We're simply not producing, in relative terms, significant numbers of engineers or scientists from people who have already been here for a number of generations," said Wilcox, who specializes in helping the start-ups that gave his bank its name. "You've got to bring them in from the outside."

Foreign nationals earn half the masters degrees and 71 percent of the doctorates in electrical engineering at U.S. universities, according to the House immigration subcommittee.

But they are increasingly unlikely to stay. Duke University's Wadwha said the U.S. lost 100,000 highly educated foreigners over the last 20 years, but faces accelerating losses of 100,000 to 200,000 in the next five years.

"The United States is experiencing a brain drain and doesn't even know what that means," he said.