Putting Out the Welcome Mat

For state and local policymakers, creating a flourishing entrepreneurial environment is not just a talking point. Instead, it is viewed as a pillar of their growth strategy. Creating spaces where entrepreneurship is seen a viable option for many, not just the stereotypical entrepreneur, is key to engaging a diverse group of would-be business owners.

One subset of the population that has a particular propensity for entrepreneurship is immigrants. While cities and states are constrained in the ways they can support and attract immigrant entrepreneurs due to the restrictions of federal immigration law, government officials are exploring new ways to provide a more welcoming environment.

Immigrants have been a strong force of new business creation throughout American history. Companies with immigrant founders, including Proctor & Gamble, Yahoo, and Google, are viewed as distinctly American companies. These examples of immigrant founded businesses have been the source of new products and platforms that have changed the way Americans live and work.

Along with their legacy of entrepreneurial success, immigrants today start more businesses than their native-born counterparts. Rates of business creation for immigrants have been on the rise in recent years, while rates for the native-born have not grown. Not only are there more new businesses that are founded by immigrants, but immigrants also make up a significant chunk of the high-growth and high-tech new businesses. Between 2006 and 2012, about a quarter of all technology and engineering startups had at least one immigrant founder.

While some state and local policymakers focus on the negative aspects of immigration, other policymakers are beginning to embrace immigration as a way to sustain economic growth and make stronger, more inclusive communities. Communities are intentionally developing a more welcoming environment that elevates reality over rhetoric and builds communities based on communication and trust. Creating such an environment complements the natural entrepreneurial streak within these immigrants and catalyzes their businesses to innovate, create jobs, and secure their own economic independence.

Of course, immigration as a policy issue is often dictated to states and cities by federal policy. States or cities can’t act independently and see the raw number of immigrants in the United States increase. A number of proposals have been circulated in recent years, including ones that explicitly provide a startup visa for immigrating business owners. The inability of the federal government to enact comprehensive immigration reform that provides visa options for talented and entrepreneurial immigrants is a detriment to the economic health of cities, states, and the country at large. Foreign graduates of American universities and current immigrant business owners would be stronger contributors to American economic growth with legislation that provides more attainable visa options rather than fewer. The slowness of the federal government to resolve issues like excess H1-B visa demand and the provision of options for entrepreneurs who wish to immigrate hinders overall economic growth and contributes to a less dynamic economy.

Without such federal action, cities and states are having to experiment with creative ways to engage their immigrant communities within the bounds of federal law. Recently, I attended an event held by Welcoming America, an organization that works with cities and non-profits to help encourage more welcoming words and actions by cities.  One of the sessions detailed ways states are eliminating barriers that prevent immigrants from reaching both business and personal success.

One of the experiments that some states are trying is state-based immigration offices. Currently, such offices exist in four states (Illinois, Michigan, New York, and Maryland). In Michigan, Governor Rick Snyder created the Office of New Americans to limit the barriers to immigration in Michigan and provide a source of factual statistics. The office also works directly with immigrants to aid them in determining how their degrees from foreign institutions translate in to skilled licenses. Overall, the office is dedicated to addressing the needs of immigrants in Michigan from an economic development lens, easing the process of immigrant integration.

There are other innovative actions that states are experimenting with to try to put their welcoming attitude into action. Massachusetts last year and Colorado this fall have run entrepreneur in residence programs, where immigrant entrepreneurs remain affiliated and work at the university on an H1-B visa while running their own startup. Cities are also getting more involved in actively welcoming immigrant populations through specific offices through the mayor and organizations like the St. Louis Mosaic Project, which promotes the innovation and energy immigrants bring to the city.

Immigrant entrepreneurship has been a driving force of innovation and job creation through American history. Cities and states realize that intentional efforts and physical manifestations of a welcoming attitude creates stronger, more economically vibrant cities. Absent federal immigration policy change, cities and states are the laboratories that can discover how new policies cultivate a blossoming entrepreneurial ecosystem that support entrepreneurs of all kinds.

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chris jackson

Chris Jackson

Chris Jackson is a research assistant in Research and Policy for the Ewing Marion Kauffman Foundation, assisting in the understanding of what policies and environments best promote entrepreneurship and education in the pursuit of economic growth.