In a report titled 'Bits and Billions', the London-based Policy Exchange said the UK has enormous potential to be a world-leader in the high-tech and digital economy, but that it is tough for start-ups to find enough coders, designers and other highly skilled staff.
The study wants UK policymakers to learn lessons from the United States, especially California which is home to nearly half of the top 100 digital start-ups in the world, and relax immigration rules.
One of its major recommendations is to reinstate the two-year post study visa that enabled students from India and other non EU countries to work for two years after completing their courses.
The visa, which was popular among Indian students, was scrapped in April.
The report wants the government to relax visa requirements for skilled migrants, to enable start up businesses in the digital sector to take on highly skilled staff for a two-year probationary period without needing to pay a high up-front salary.
Chris Yiu, author of the report, said: "The Prime Minister is right when he says he wants the UK to be the best place in the world to start, run and grow a high-tech company.
The problem is that the sorts of skills these businesses need are in short supply".
He added "Start-ups need to be able to take on the right people fast, not spend months trying to expand their technology teams. That's why we need to make it easier for UK start-ups to take on highly skilled foreign graduates".
Yiu noted that companies such as Intel, Yahoo!, Google, eBay and YouTube were co-founded by immigrant entrepreneurs.
"They are now major global businesses. We need to create the right conditions to ensure that the UK lives up to its potential to be a world leader in the digital economy," he said.
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