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What’s the role of immigrant entrepreneurs?

By Dustin Mendus
Más Wired

Mexican immigrants were the biggest immigrant group, but Indian immigrants tended to found startups at higher rates.

The Kauffman Foundation has released a new publication focusing on immigrant entrepreneurs in the United States. This study shows an interesting array of figures, which suggest that immigrant entrepreneurship has plateaued – something which may become a problem for the U.S.

Firstly, data regarding origin of birth has not changed much from the 2000 and 2010 census data. There has been a noticeable decline in all populations sending immigrants between 2000 and 2010, however, the order has not shifted much. 53% of immigrants are from Latin America, 28% from Asia, and 12% from Europe.

(Photo: NASA)

Mexican immigrants are without question the largest immigrant group in the country, outpacing the second largest group, Chinese by five times. Indians follow, but Filipinos seem to be overtaking them come 2010. Salvadorans, Cubans, and Dominicans are the other Latino groups which make it on this list from Latin America.

Foreign born immigrants are flocking to several states, California, New York, New Jersey, Delaware, Maryland, and Virginia, with Texas, Florida, and Nevada taking in lower, but still significant numbers of immigrants. California takes on an impressive 25.4% of the foreign born population that comes to the country.

Of interest as well are the states which pass the average percentage of companies with immigrant founders (This number is a little under 25%):

  • New Jersey: Over 40%
  • Massachusetts: 40%
  • California: Over 35%
  • Illinois: Under 35%
  • New York: Under 30%
  • Washington: Under 30%
  • Maryland: 25%

The birthplaces of engineering and technology immigrant founders has overwhelmingly been India; a little over 30% of the immigrant founders are Indian, with China following in second place, barely passing 5%. The other large contributors in the engineering and technology fields are largely European nations, sans Israel, Korea, and Australia.

These immigrant engineering and technology (E&T) companies do not correspond with the data above, though. 31% of E&T companies founded by immigrants on or after 2006 is overwhelmingly in California, at 31%, Massachusetts (the second state with the largest number of E&T companies founded by immigrants) following at 9%, Texas and Florida tie for 6% of Immigrant start up E&T companies.

This trend continues to a degree with Indian entrepreneurs. California, once again ahead with 26%, Massachusetts in second place, with 8%. In comparison, Chinese entrepreneurs flock to California (40%), Maryland (16%), and Washington (8%). U.K. entrepreneurs are also fond of California (32%), but flock to New York (16%), and Washington (11%).

German entrepreneurs are an outlier in terms of founding locations for E&T companies; 22% of German entrepreneurs found companies in Ohio, 17% in California. Texas, New Jersey, Massachusetts, and North Carolina all tying for 11%.

What kind of businesses are these E&T companies, though? 45% of these are Innovation & Manufacturing related, Software coming in after with 22%, Bioscience with 11%, 9% Environmental, 6% Computers, 4% in Semiconductors, and Defense & Aerospace with 3% at the bottom.

Across the board, from 2006-2012 these companies have roughly employed 560,000 workers, generating $63 Billion in sales by 2012.

The writers of this study conclude that the rate of immigrant entrepreneurship across the nation has plateaued. Their measurements used Silicon Valley as a rubric in regards to technology. The decline in immigrant founders in Silicon Valley since 2005, in the eyes of the study writers, should raise questions about the future of the country to remain economically competitive in the international market.

Dustin Mendus is a undergraduate student working toward a Geography degree, with a heart and mind firmly embedded in the world of Journalism. His interests include history, urban planning, and occasionaly dabbling in video games.

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