Spotlight on Immigrant Entrepreneurship

21 Mar

by Regina Cantu

Countless studies have shown it: With any recession comes an increase in entrepreneurship. But the trend toward self-owned businesses is now being led by immigrants, whose enterprises accounted for more than 50 percent of new businesses in the past two years.

According to a new report by the Ewing Marion Kauffman Foundation, an entrepreneurship advocacy group, immigrants were leaders in this trend last year. The rate of entrepreneurial activity among immigrants increased significantly – from 0.51 percent in 2009 to 0.62 percent in 2010.

As Congress dives headfirst into an immigration debate fueled by old misconception and fear-mongering xenophobia, it becomes increasingly clear that a grave disconnect exists between public perception and economic reality. While many Americans believe passionately that immigrants are a financial burden on the U.S. and take jobs away from those who were born here, substantive statistical research indicates quite the opposite. Far from being a drag on the economy, immigrants are a vital engine of small-business growth.

Data from the U.S. Small Business Administration’s (SBA) Office of Advocacy shows that minority-owned small businesses are among the fastest growing segments of the small business community. Indeed, Latinos had the largest increase in entrepreneurial activity between 2009 and 2010, from 0.46 percent to 0.56. Asian entrepreneurship also increased–from 0.31 percent in 2009 to 0.37 percent in 2010. In all, minority-owned business enterprises accounted for more than 50 percent of the 2 million new businesses over the past 10 years, according to the SBA.

The result of these contrasting trends is that immigrants were more than twice as likely to start businesses each month in 2010 than were the native-born,” the authors of the Kauffman Foundation report write.

They also note that entrepreneurial activity last year was greater than at any time in the past 15 years. Meanwhile, the rate of entrepreneurial activity declined slightly for native-born Americans. Immigrants benefit from cultural cohesion, what an experienced professional might call a “contacts list.” They use family to staff the business. Cultural kin become mentors, customers and suppliers.

True, none of this means that immigrant entrepreneurs are in any way “better” than native-born entrepreneurs, or that native-born entrepreneurs are any less important. But at the core of their status as US immigrants lay certain key characteristics—ambition, drive, work ethic—that may make them more likely to start a company.

Immigrants exhibit something very old and very American, a can-do spirit borne of the immigrant experience. The impact of new immigrants during these hard economic times is undeniable, and in the great race of the global economy, they bring with them a very valuable and refreshing competitive edge. Clearly, in order to foster the creation of new jobs and economic momentum, legislation should encourage immigrants to come to the U.S. to start companies and employ U.S. citizens.

As Edward Roberts, founder of the MIT Entrepreneurship Center puts it, “To immigrate is an entrepreneurial act.


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