Skip to content

Immigrant entrepreneurship: just the facts

Greater acceptance of immigrant entrepreneurs can boost falling rates of firm formation, create jobs for Americans, and spur economic growth.

The nature of research is that there are always questions to answer. But, having questions for further research doesn’t mean there are not any facts.

Such is the case with immigrant entrepreneurship.

Like an encyclopedia for entrepreneurship, the Kauffman Foundation-created State of the Field* summarizes the current state of knowledge about various entrepreneurship topics.

State of the Field’s immigration section* begins with a fact: “We know that immigrants in the United States tend to be more entrepreneurial than the native-born population.”

Here’s another fact: New and young businesses create nearly all of the net new jobs in the U.S. economy each year.

That means if you want job creation, you want entrepreneurs. And if you want entrepreneurs, a good bet is that you’ll find them among immigrants.

The reasons immigrants are more likely to become entrepreneurs are less clear. Some researchers cite immigrants’ risk propensity, unique knowledge or access to transnational resources and networks.

Immigrant entrepreneur Des Deshpande of India attributes immigrants’ entrepreneurial propensity to “out-of-the-box” thinking, which he says is natural from someone who is “out-of-the-box.”

Whatever the reason, for policymakers the implication is clear: Greater acceptance of immigrant entrepreneurs can boost falling rates of firm formation, create jobs for Americans and spur economic growth.

Consider some more facts about immigrant entrepreneurship:

  • More than half of America’s unicorn companies – privately held firms valued at $1 billion or more – had at least one immigrant co-founder.
  • About one-quarter of the engineering and technology companies started in the United States between 2006-2012 had at least one key founder who was an immigrant.

Acting on the facts

To reap the economic benefits of immigrant entrepreneurship, U.S. policymakers can create a startup visa so that immigrants with entrepreneurial dreams can pursue them here in the United States. In pursuit of their entrepreneurial ambitions, many of these immigrant entrepreneurs will create jobs for Americans.

Fifteen other countries have created startup visas for immigrant entrepreneurs, including Canada, South Korea and the United Kingdom. With increasing competition for the world’s best entrepreneurs, the United States can no longer afford to limp along with its outdated immigration policies.

Until the creation of a startup visa, states, city governments and philanthropists can work with universities to create Entrepreneur in Residence programs to attract and retain international entrepreneurial talent. These public or privately funded initiatives use H1-B visas to employ immigrant entrepreneurs at universities or facilitate collaboration between a university and an immigrant-entrepreneur-founded startup. Programs like this exist at the University of Colorado, Boulder; the City University of New York; and universities in Massachusetts, among others.

Finally, communities can purposefully become more welcoming to immigrants and work to provide those with entrepreneurial ambition access to the networks and support they need to start businesses. Welcoming America is a national organization working to do just that.

With immigrant entrepreneurship, it’s good to remember what Daniel Patrick Moynihan said: “Everyone is entitled to his own opinion, but not to his own facts.” 

*State of the Field was archived in 2019