Immigrant Entrepreneurs: The Job Creators We Don’t Always Hear About
While stereotypes may have it that immigrants take jobs from Americans—particularly those Americans shun, like butchering hogs, cleaning houses, and working as nannies—the statistics tell a very different story about immigrants and their children: they are job creators.
The ratio of new businesses in the United States started by immigrants or their children is mindboggling. Whereas native-born Americans in general forego the risks that come with self-initiated undertakings, favoring the relative stability of 9–5 jobs, it’s the newcomers who roll up their sleeves and tap into the American Dream by starting their own businesses. A report in the New American Economy, a non-partisan group that supports immigration reform, claims that immigrants, or children of immigrants, are four times more likely to start their own business.
Reid Hofmann, the founder of LinkedIn, characterizes an entrepreneur as one who “jumps off a cliff and builds a plane on the way down.” He may have hit the spot for the entrepreneurial nature of immigrants. A catalyst for immigrants to create that plane may be discrimination, as well as cultural and language barriers, suggests a study published in the Harvard Business Review.
The HBR study made a telling inference: Immigrants are more “open-minded” and more apt to try new things, which can lead to big dividends.
Considering this, it should be little surprise that 40 percent of the Fortune 500 companies were founded by immigrants or their children. The New American Economy study adds that immigrants are a major factor in building companies in high technology, where it is estimated that 45 percent of the companies were founded by immigrants or children of immigrants. That statistic is more pronounced considering just above 10 percent of the U.S. population in foreign-born.
“Immigrant businesses are smaller than those started by the native-born, but their collective impact on the U.S. economy is huge and growing,” adds the New American Economy study, which purports that more than $775 billion is generated by immigrant-owned firms, which employs 1 out of every 10 workers in the United states.
The New American Economy report also highlights track records for immigrant start-ups. In a four year period, from 2007 to 2011, immigrants founded over 25 percent of all new businesses in health care, professional and business services, construction, retail trade, leisure and hospitality, educational services, and transportation and utilities.
“Many of the businesses they [immigrants] create,” adds Robert Fairlee, a consultant for the Small Business Administration, “become very successful, hire employees, and export goods and services to other countries.”
Hard Avenues, an online news blog about Internet ventures, published an impressive who’s who of immigrant-entrepreneurs, whose initiatives led to highly successful enterprises. Among the 70 figures on the list were Elon Musk, the South African-born founder of Space-X and Tesla; Sergey Brinn, son of a Russian émigré, co-founder of Google; Greek-born Arianna Huffington, who sold her publishing firm for $315 million in 2011; and Pierre Omidyar, French-born of Iranian descent, who started eBay. Although this list hardly reflects names from traditionally underserved demographic constituencies, the achievements from all immigrant entrepreneurship—from Mom and Pop shops to chain stores—is no secret.
Vice President Mike Pence spoke recently at the Latino Coalition Policy Summit, where he lauded contributions of Hispanic entrepreneurs in the United States. “The fact is that Hispanics are driving entrepreneurship and economic growth like never before,” he said. “The number of Latino-owned businesses grew by more than 50 percent over the past decade—leaps and bounds over every other American demographic.”
President Trump’s selection of Linda McMahon to lead the Small Business Administration drew high marks from the Latino Coalition’s chairman, Hector Barreto, who called her “a woman who understands what it takes to grow a business.”
Ms. McMahon has pledged support for business start-ups through mentoring programs, education and training, and the SBA’s Small Business Development Program. “The SBA wants to be your partner in continued growth,” said Ms McMahon who shared the dais with Mr. Pence at the Summit. “[T]aking a risk, working hard, investing in ourselves and our community is a pretty good pathway to success.”
Timothy Wahl’s experience in business, education, the sciences, and the arts gives him a unique platform on a spectrum of subjects.