Entrepreneurship
Entrepreneurship and business creation is fundamental to a healthy economy. Companies less than five years old create an average of 1.5 million new jobs for Americans each year.† Immigrants in particular play an important role in creating jobs as they are more likely to start a new business than the rest of the population. Despite this, the United States lacks a startup visa to welcome immigrant entrepreneurs with a proven idea and solid investment. This results in many business owners struggling to stay—at a cost to our economy and its workers. † Jason Wiens and Chris Jackson, “The Importance of Young Firms for Economic Growth,” September 13, 2015. Available online.
The Important Role of Immigrants in America’s Innovation Economy
This week, the U.S. Senate Committee on Commerce, Science, and Transportation weighed in on immigration reform with a hearing on the role of immigrants in America’s innovation economy. Remarks from Sens. Rockefeller (D-WV) and Thune (R-SD) noted the contributions of immigrant innovators and entrepreneurs. Immigrants in the United States were named as inventors or co-inventors on 25.6 percent of international patent applications filed from the U.S. in 2006. Furthermore, temporary workers and permanent residents made contributions to over half of the international patents filed by several large, multi-national companies. Temporary and permanent foreign-born workers represent at least 24 percent of the nation’s scientists and 47 percent of engineers with doctoral degrees. Read More
New Heritage Report Ignores Broad Consensus on Economic Benefits of Reform
Today, the Heritage Foundation released a report that attempts to assess the fiscal costs associated with legalizing the 11 million unauthorized individuals living in the United States. The new report is similar to a 2007 study, which was widely criticized at the time of publication and continues to be refuted today by conservatives like Republican budget hawk Paul Ryan, former head of the Congressional Budget Office under President Bush, Douglas Holtz-Eaken, anti-tax activist Grover Norquist and the libertarian Cato Institute. In addition, the Bi-Partisan Policy Institute’s Immigration Task Force (which includes Condoleeza Rice and Haley Barbour) remarked on the report after its release noting, “we strongly believe that this study’s modeling and assumptions are fundamentally flawed because they do not account for the many contributions that an appropriately reformed immigration system can afford our economy and our country.” Read More
Keeping U.S. High-Skilled Temporary Worker Visa Programs Workable
When analyzing higher-skilled guest worker visa programs, such as the H-1B and L-1 programs, critics often fail to acknowledge the very different and important purposes that these programs were designed to serve, and the complicated requirements already in place to protect against abuse or exploitation. There is no denying that we can and should improve these programs and the strategies used to enforce them. However, given the well-established economic benefits of these programs, and the challenges employers face finding highly skilled workers, particularly in technical fields, it is essential that any proposed reforms not impose restrictions that may make these programs completely unworkable. Read More
Why There Are Not Enough STEM Workers in the U.S. Labor Market
Occasional research, such as a report released last week by the Economic Policy Institute, suggests the U.S. has a sufficient supply of science, technology, engineering, and mathematics (STEM) graduates and workers. However, these conclusions are at odds with a growing number of expert analyses that find the U.S. does in fact face significant challenges in meeting the growing needs of our expanding knowledge-based economy. Here is a sampling of the evidence: Read More
Why There Are Not Enough STEM Workers in the U.S. Labor Market
Occasional research, such as a report released last week by the Economic Policy Institute, suggests the U.S. has a sufficient supply of science, technology, engineering, and mathematics (STEM) graduates and workers. However, these conclusions are at odds with a growing number of expert analyses that find the U.S. does in fact face significant challenges in meeting the growing needs of our expanding knowledge-based economy. Here is a sampling of the evidence: Read More
High-Skilled Immigration and Entrepreneurship in the Senate’s Immigration Bill
On the road to reform, the Senate’s Border Security, Economic Opportunity, and Immigration Modernization Act contains several changes and new provisions for skilled immigration and entrepreneurship. Specifically, the bill provides balanced reforms to the H-1B nonimmigrant visa for high-skilled individuals, various provisions for highly skilled individuals through permanent employment-based immigration, and a new INVEST visa for entrepreneurs. Read More
H-1B Visa Cap Reached in Five Days
U.S. Citizenship and Immigration Services (USCIS) announced on Friday, April 5, just five days after the H-1B high-skill “visa race” began, that they had received more applications than could be approved under the cap of 65,000 for fiscal year 2014. Additionally, USCIS stated they had received more than 20,000 H-1B petitions on behalf of individuals who are exempt from the cap. As such, USCIS will no longer be accepting additional H-1B petitions for fiscal year 2014. At this point, USCIS will use a random selection “lottery” process to allocate the 65,000 visas from the applications received through April 5. Read More
Small Business Owners Support Comprehensive Immigration Reform
Small business owners throughout the United States have a pulse on the goings on within their local communities. They recognize that immigrant workers and their families are also consumers, which helps to create additional jobs and bolster local economies. Within that context, two new polls highlight small business owners’ perspectives of immigration and its positive effects on the ground in communities. Overwhelmingly, the surveys show small business owners, regardless of political affiliation, support comprehensive immigration reform. Read More
Labor and Business Strike Immigration Deal on Worker Program
Over the weekend, the U.S. Chamber of Commerce and the AFL-CIO reached an agreement on a new type of immigrant worker program that has the potential to reshape the way temporary and permanent immigration visas contribute to American immigration policy. Although this is commonly referred to as future immigration flow, it should not be confused with other debates over increasing visas for high skilled workers or increasing employment based green cards. Instead, the agreement represents an attempt to reshape how business and labor will deal with the incredibly complex issues that are part of filling the demand for less-skilled labor in the United States. In the short term, it sets up a series of concepts that both sides would be willing to support in comprehensive immigration reform—but the Gang of Eight still has to convert those concepts into workable legislation. Read More
Facebook Founder “Likes” Comprehensive Immigration Reform
While immigration reform has long been important to Silicon Valley, for the most part the advocacy has focused on high tech issues such as expanded immigration for workers in science and technology fields and increased access to H-1B temporary visas. The breadth of support for more comprehensive reform, however, has been growing, as it becomes increasingly clear that issues like family-based immigration, enforcement, training the next generation of Americans for the next generation of jobs, and a pathway to citizenship for unauthorized immigrants are actually deeply connected. Read More
Immigrants Create American Jobs
How many jobs do immigrant entrepreneurs create? The data shows that firms owned by immigrants provide millions of jobs for U.S. workers and generate billions of dollars in annual income. With new business formation slowing in the United States, immigrant entrepreneurs have a critical role in many parts of the country, creating jobs for all Americans.
What percent of businesses are owned by immigrants?
The act of moving to another country is inherently courageous and risky. So, it comes as no surprise that immigrants tend to be more entrepreneurial than the rest of the population. In 2019, immigrant entrepreneurs made up 21.7 percent of all business owners in the United States, despite making up just over 13.6 percent of the population and 17.1 percent of the U.S. labor force.
Where Immigrants Are Most Entrepreneurial, 2019
Immigrants and the Recovery from the Great Recession
Foreign-born entrepreneurs and the jobs they created were instrumental in the recovery from the Great Recession. Between 2007 and 2011, immigrant entrepreneurs founded a large share of new businesses across the country and in several key states.
Share of New Businesses Founded by Immigrants in Select States, 2007-2011
Which Industries Are Immigrant Businesses Most Prevalent?
As important as the frequency with which immigrants start businesses is the diversity of fields in which they start them. Immigrants start more than 25 percent of all businesses in seven of the eight sectors that the U.S. Bureau of Labor Statistics expects to grow the fastest over the next decade. They also play a large role in founding both Main Street businesses1 and high-tech firms.2
Sources:
1 David Dyssegaard Kallick, “Bringing Vitality to Main Street: How Immigrant Small Businesses Help Local Economies Grow,” New York: Fiscal Policy Institute and Americas Society/Council of the Americas, 2015. Available online.
2 Vivek Wadhwa et al., “America’s New Immigrant Entrepreneurs: Part I,” SSRN Scholarly Paper (Rochester, NY: Social Science Research Network, 2007). Available online.
Share of Businesses Started by Immigrant Entrepreneurs in Seven Key Sectors, 2007-2011
Immigrants Found both Main Street Businesses and High-Tech Firms
Business Ownership Among Immigrant Groups
Looking at specific ethnic and national origin groups within the immigrant population, we find that many exhibit entrepreneurship rates higher than the native-born. At right we highlight the particular contributions of Middle Eastern business owners in Detroit, a group frequently credited with helping to spur the city’s recent economic comeback.
Sources:
3 Steve Tobocman, “Guide to Immigrant Economic Development,” Welcoming America, accessed July 5, 2016. Available online.
4 New American Economy, "Reason for Reform: Entrepreneurship," October 2016. Available online.
Entrepreneurship Rates for Immigrant Subgroups, 2014
Immigrants and the Fortune 500
Consistent with past NAE research, a significant number of firms on the most recent Fortune 500 list were founded by immigrants or their children. These companies make enormous contributions to both the U.S. and global economy. They also live on beyond their founders, generating jobs and revenue long after their visionaries retire or move on.
Visa Obstacles
Currently, there is no visa for those who want to come to the United States, start a company, and create jobs for U.S. workers. To access a visa, many immigrant entrepreneurs choose to sell a majority stake in their company and then apply for a visa as a high-skilled worker rather than as the owner of the firm. Our broken H-1B visa system, however, means that many entrepreneurs cannot get a visa before the cap is exhausted each year. In 2016, the White House proposed a rule that would make it easier for entrepreneurs to remain in the country, but it is clear a more permanent, legislative fix is needed.5
Sources:
5 Issie Lapowski, “White House Proposes a New Immigration Rule for Entrepreneurs,” WIRED, accessed December 14, 2016. Available online.
6“USCIS Completes the H-1B Cap Random Selection Process for FY 2016,” USCIS, accessed December 14, 2016. Available online.
Low-Skilled Entrepreneurship
Immigrant entrepreneurs are hardly a monolithic group. While much of the attention is focused on high-skilled foreign-born entrepreneurs that drive innovation in Silicon Valley, immigrant entrepreneurs with humbler backgrounds continue to play critical roles in the U.S. economy. Founding retail shops, restaurants, and personal service businesses, these immigrant entrepreneurs help towns and cities across the United States stay vibrant. In sum, the over 2.1 million immigrant entrepreneurs with less than a college degree have a significant economic impact, creating billions of dollars in economic activity and providing jobs to thousands of Americans.
Top Industries Among Immigrant Entrepreneurs with Less than a Bachelor’s Degree, 2015
Entrepreneurship Rates of Workers in Various Demographic Groups, 2015
Business Income of Less-Skilled Immigrant Entrepreneurs, 2015
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No one should face the immigration system alone
